Medicare and Social Security Fair Share Act

The Medicare and Social Security Fair Share Act modifies payroll taxes by raising the Social Security wage base to $400,000, meaning income above this threshold would now be subject to Social Security taxes for the first time. It adds a new 1.2% tax on wages and self-employment income above $400,000 (or $500,000 for joint returns), and increases the net investment income tax by 13.6% for high earners. The bill redirects the additional tax revenues to Social Security and Medicare trust funds, with 71.3% going to Old-Age and Survivors, 10.3% to Disability Insurance, and 28.7% to Hospital Insurance. These changes would primarily affect high-income individuals earning above $400,000 annually, applying to taxable years beginning after December 31, 2023.