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A new tax for top earners?

A lot has been written during the Democratic primary race about plans to tax billionaires.

But there’s also a tax increase in leading Democratic policy proposals that could affect millions of high-income workers, Neil Irwin of the Upshot writes:

• “This year, American workers and their employers owe a combined 12.4 percent on Social Security payroll taxes for income up to $132,900 (rising to $137,700 in 2020). They owe nothing on earnings above that level.”

• “Some Democrats in the thick of the presidential race and on Capitol Hill now seek to change or eliminate that cap — potentially placing a new double-digit tax on high earners, with several plans focusing on earnings above $250,000.”

“The result would be a large tax increase on high earners, even before other changes a Democratic administration might contemplate, such as increasing income tax rates or taxes on investment income,” Mr. Irwin adds. “The top earners facing new Social Security taxes would not see their future benefits rise commensurately; rather it would amount to a transfer from high earners to low- and middle-income Social Security recipients.”