H.R. 3517: Social Security Enhancement and Protection Act of 2025

The "Social Security Enhancement and Protection Act of 2025" proposes several significant reforms aimed at improving the Social Security system to better support individuals, particularly those with lower incomes and certain dependents.

Key Provisions of the Bill

• Increased Minimum Benefits: The bill will raise the minimum Social Security benefits for low earners, providing them with more financial support during retirement.
• Adjustments for Long-Term Beneficiaries: Individuals who have been receiving benefits for a longer time may see changes that increase their benefits, ensuring they can maintain a better standard of living.
• Dependent Benefits Extension: Benefits for dependents, such as children or disabled family members, will be extended until the age of 26, allowing families to provide longer-term support for younger dependents.

Changes to Benefit Rates

Starting in 2026, the applicable percentage rates for Social Security benefits will begin to decrease gradually from 90% and will reach 0% after 2035. This means that the calculation for benefits, which is based on average earnings, will change, potentially reducing the amount of benefits available to some individuals over time.

Employment Tax Rate Adjustments

To fund these changes, the bill proposes to increase employment tax rates. This will affect:

• Employees
• Employers
• Self-employed individuals

These tax rate changes will take effect after 2025 and will contribute to the financing of the enhanced Social Security benefits.

Summary Impact

The bill aims to strengthen the Social Security system by providing greater assistance to low-income earners, adjusting benefits for those who have been on long-term support, and extending dependent coverage. However, in doing so, it will also initiate gradual reductions in benefit percentages while increasing tax rates on employment to fund these reforms.

Relevant Companies

• AMZN: Amazon may be impacted due to the increased employment tax rates affecting their payroll costs significantly, especially as a large employer.
• TSLA: Tesla, as a major employer and self-employed business participant under the new tax rates, will see direct effects on their employment costs and operational expenses.
• MSFT: Microsoft will also face increased employment tax obligations, which may impact their overall labor cost structure.