Congress is weighing a bill that would end one of Social Security’s oldest carve-outs: the wage cap that lets high earners stop paying into the system once their income crosses a set line. The Strengthening Social Security Act of 2026, introduced by Rep. Linda Sanchez (D-Calif.) and Rep. Mark Pocan (D-Wis.), would phase out that cap starting in 2028 and pair it with changes to how benefits are calculated and how cost-of-living raises are set. It hasn’t passed either chamber yet, but it’s one of several competing Social Security proposals in play this year, and its structure shows clearly who pays more and who gets more.
What the wage cap does right now
In 2026, Social Security payroll taxes apply only to the first $184,500 of a worker’s wages. Earn a $60,000 salary and the entire thing is taxed at the standard 6.2% employee rate. Earn $500,000 and only the first $184,500 is taxed, meaning roughly $315,500 of that income owes no Social Security tax at all. According to Social Security Administration data, about 6% of workers earn above the cap in a given year.
High earners and the self-employed
This bill targets that 6%. Starting in 2028, 80% of wages above the cap would become taxable, with that share rising each year until it reaches 100% by 2032. A worker earning $300,000 would go from paying tax on $184,500 of it to paying tax on the full amount within about six years. Self-employed workers, who pay both the employee and employer share of the payroll tax, would see the same phase-in on their net earnings, roughly doubling the added tax burden per dollar above the cap compared with a salaried employee.
Employers of high earners
Because Social Security tax is split between worker and employer, companies that pay six-figure-plus salaries, most concentrated in finance, tech, law, and medicine, would also see their payroll tax costs rise as the cap phases out. That’s a real cost increase for firms with a lot of highly paid staff, distinct from firms whose workforce mostly earns below $184,500 and would see no change at all.
Current retirees and near-retirees
The bill creates a new inflation measure, the CPI-E, specifically built to track how seniors spend, weighted more toward health care and housing costs than the general inflation index used today. If adopted for cost-of-living adjustments starting in 2027, retirees would likely see somewhat larger annual benefit increases than under the current formula, since senior-specific costs have tended to rise faster than overall inflation in most recent years.
Widows, widowers, and two-income households
For months after December 2027, the bill would rewrite the formula for survivor benefits paid to widows, widowers, and some divorced surviving spouses. It’s aimed at two-income households, where the current rules can leave a surviving spouse with a smaller combined benefit than if only one spouse had worked. The rewrite is meant to close that gap, which advocates for the bill say has disproportionately shortchanged surviving spouses in dual-earner marriages as more women have entered the workforce over the past several decades.
Lower earners and future beneficiaries
The bill also raises the benefit formula’s replacement rate for the lowest tier of career earnings, from 90% up to 95% by 2035. That change is structured to matter most to people who spent significant time in low-wage work, raising the share of those earnings that counts toward their eventual monthly check.
Where it stands
H.R. 9296 was introduced in the House in June 2026 and remains in committee. Any changes to Social Security’s tax structure would need to clear a 60-vote threshold in the Senate, meaning the bill’s current form is a marker in a broader negotiation rather than a near-term certainty. Several competing bills, including the Social Security Expansion Act and the Social Security Enhancement and Protection Act, propose similar wage-cap changes on different timelines, and lawmakers in both parties have said the program’s funding shortfall needs some kind of fix before the mid-2030s.
Sources: H.R.9296 – Strengthening Social Security Act of 2026, Congress.gov · How the 2026 Social Security payroll tax cap could impact your paycheck, CNBC · 2026 Cost-of-Living Adjustment (COLA) Fact Sheet, Social Security Administration · Sanchez, Pocan introduce bill to strengthen Social Security benefits, Rep. Linda Sanchez press release
