Economic Security
Act 1

The Payroll Reform Act

Version 1.0Updated 2026-06-30Initial ARC MVP publication.

Raise take-home pay and make family income more stable by exempting the first $25,000 of wages from payroll tax, indexing that amount to inflation, strengthening the child tax credit for families with children, and keeping Social Security strong by asking more from top earners.

Planks In This Act

Exempt The First $25,000 Of Wages From Payroll Tax

The first $25,000 of wages is exempt from the employee share of the payroll tax, and that amount rises with inflation over time.

Raise The Payroll-Tax Cap On High Earners

High earners pay the same payroll-tax rate on more of their wages instead of seeing a larger share of their income sit above the cap and escape the tax.

Strengthen The Child Tax Credit And Pay It Monthly

Strengthen the child tax credit and pay it monthly, giving families with children more predictable money for rent, food, childcare, transportation, and other regular costs.

Why This Matters

The problem is that work does not go as far as it used to.

A generation ago, one paycheck was often enough to support a family. Today many households depend on two incomes and still feel financially stretched. Housing, healthcare, childcare, transportation, and other necessities consume more of family budgets, while wages have struggled to keep pace. Many Americans work harder than previous generations yet feel less secure.

The result is a growing belief that ordinary work no longer reliably leads to middle-class stability.

What Broke

The tax system places some of its heaviest burdens directly on wages.

Every paycheck is reduced by payroll taxes before workers ever see the money. Meanwhile, many forms of investment income face different tax treatment, creating a system where work often carries a heavier tax burden than wealth.

At the same time, Social Security remains one of the country's most important retirement programs, but its long-term finances require attention. Too often, proposals to reduce payroll taxes simply shift costs onto the program itself.

Americans should not be forced to choose between stronger paychecks today and retirement security tomorrow.

What This Act Does

This act increases take-home pay for working Americans, provides more predictable support for families raising children, and strengthens Social Security's long-term finances.

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