The Total Compensation Levy (TCL)
Social Security & Workforce Continuity Trust (Chapter 2)
The Total Compensation Levy (TCL) — 27% of all compensation — funds four streams. The TCL total, and the employee/employer split, are fixed: employees pay 10%, employers pay 17%.
RATE STRUCTURE (v20)
Stream | Rate | Employee | Employer | Notes
SS Trust | 16.0% | 8.0% | 8.0% | On capped wages (TCL replaces FICA)
VHA-E Health | — | — | — | General Fund appropriation
Unemployment | 2.0% | 1.0% | 1.0% | Federal UI fund
General Fund | 9.0% | 1.0% | 8.0% | Remainder after SS + UI
WHY 16%, NOT 12.4%
Under current law at 12.4%, the SS Trust faces insolvency by 2033. At 16% (8%+8%) on capped wages via TCL, the trust is permanently solvent with the Solvency Governor maintaining a 12–36 month reserve band.
v16: 12.4% → insolvency by 2033
v20: 16.0% (8%+8%) on capped wages → permanent solvency, auto-adjusted by Solvency Governor
BENEFIT FORMULA (4 Bend Points)
The NAA uses a 4-bend-point formula that provides near-flat benefits above the old FICA cap ($160,200), eliminating regressive cliff effects:
Bend point 1: 90% replacement on first $1,174/mo AIME
Bend point 2: 32% on $1,174–$7,078/mo AIME
Bend point 3: 15% on $7,078–$13,333/mo AIME
Bend point 4: 5% on AIME above $13,333/mo
Illustrative benefits:
$30,000/yr worker: ~$1,580/mo
$60,000/yr worker: ~$2,340/mo
$100,000/yr worker: ~$3,120/mo
$200,000/yr worker: ~$4,800/mo
$500,000/yr worker: ~$5,400/mo (near-flat above old cap)
SS DIGNITY FLOOR
Minimum SS benefit: $1,500/month for workers with 10+ qualifying years. No worker who paid into the system for a decade receives poverty-level benefits.
BABY BONDS (relocated from SS Trust in v17)
Baby Bonds are a wealth-building program, not a retirement program. They are now a General Fund statutory obligation:
$1,000 at birth + $1,000/yr × 18 years = $19,000 total (no appreciation assumed on trust funds)
Average balance at age 18: ~$19,000
First maturity year: 2047
Governed by Debt Governor: if General Fund cannot cover, VAT auto-increases.
SOLVENCY GOVERNOR (sixth macro-governor)
The Solvency Governor is an automatic stabilizer that keeps the SS Trust solvent without congressional action:
Trigger: Reserve falls below 12 months OR exceeds 36 months of outlays
Action: SS TCL allocation adjusts ±0.25 percentage points (±0.50 in emergency). General Fund allocation adjusts inversely. Total TCL unchanged at 27%.
Corridor: SS allocation stays within 9.0%–12.0%
Assessment: Annual. SS Actuary certifies by March 15. Adjustment effective October 1.
Effect: Eliminates both insolvency risk and phantom surplus accumulation.
RESERVE TRAJECTORY
Year 1: Near break-even (trust covers outlays)
Years 2–10: Small surplus builds as compensation growth outpaces benefit growth
Year 25: Reserve stabilizes at ~$4–5T (approx. 3 years of outlays)
Year 50+: Reserve stays in 12–36 month band via Solvency Governor
WHAT CHANGED FROM v16
Parameter | v16 | v20
SS TCL rate | 12.4% (FICA) | 16.0% (8%+8%) on capped wages via TCL
VHA-E funding | 14% of TCL | General Fund appropriation
TCL total | 28.4% | 27% (10% employee, 17% employer)
SS reserve target | Unlimited | 12–36 months
Baby Bonds funding | SS Trust | General Fund
Macro-governors | Five | Six (+ Solvency)
Debt payoff | ~25 years | 28–32 years
Scoring Endnote 2: TCL Revenue (v20)
Compensation base (Year 10): $18.3T. Source: BLS/BEA, wages+benefits = 42.5% of GDP.
TCL gross yield: $18.3T × 27% = $4.94T (rounds to $4.86T after avoidance).
SS portion: 16% (8%+8%) on capped wages via TCL. Ring-fenced to SS Trust.
VHA-E: General Fund appropriation (no longer a TCL allocation).
UI/Skills: $18.3T × 2.0% = $0.37T.
⚠ TCL avoidance rate: 5%. Total net TCL yield ~$4.86T.