Rep. Reid Ribble, R-Wis., recently introduced the Save Our Social Security (S.O.S.) Act, which includes some practicable and commonsense solutions such as raising the retirement age and using a more accurate inflation measure.

Unfortunately, the S.O.S. Act’s faults significantly outweigh its merits.

The bill’s most harmful provision is a significant increase in Social Security’s payroll tax cap. Currently, Social Security’s 12.4 percent tax only applies to the first $118,500 of workers’ earnings (the cap is adjusted upward with wage growth each year). The S.O.S. Act would increase that level to $308,750 by 2021, and index it thereafter to tax 90 percent of all wage income. For top earners, that’s almost a $22,000 per year tax increase in 2021.

While Social Security’s trust fund will receive a significant boost from these additional taxes, federal, as well as state and local, tax revenues will decline. That’s because employers will reduce employees’ taxable wages in response to having to pay higher payroll taxes.

It is well understood that employees bear the full burden of the payroll tax, even though half of it comes from employees’ paychecks and half is collected from employers. As payroll taxes consume more of the employees’ compensation, taxable incomes will decline—causing as much as a $5,000 loss in federal income tax revenues and another $1,000 in state income tax revenues.

That only includes the direct impact of raising the payroll tax cap. Excessive marginal tax rates would further diminish taxable wages by reducing the incentive to work. The S.O.S Act would result in a 55 percent marginal tax rate for a two-earner family of four with $125,000 in income (including federal and California state taxes). Marginal rates for higher-income earners could approach 70 percent.

Such excessive marginal tax rates would reduce the labor supply, leading to even more lost tax revenues. According to a 2006 economic study, raising the payroll tax to cover 90 percent of earnings would generate only 52 percent of static revenue projections. In other words, about half of the expected gain in Social Security tax revenues from the S.O.S. Act will likely be lost through lower federal and state taxes.

Finally, higher payroll taxes will enable higher government spending as multiple economic studies have concluded that Social Security surpluses have caused as much as a one-for-one increase in non-Social Security spending or decrease in tax revenues. This means that the new payroll tax revenue will largely improve Social Security’s ability to pay benefits merely on paper.

It is true that payroll tax surpluses will result in more treasury securities being added to Social Security’s trust funds. However, these treasury securities represent a debt obligation for taxpayers and not an asset. A better approach would protect individuals’ retirement contributions from Congress’s incessant spending appetite in private accounts that individuals own and control.

Despite the inclusion of some meaningful and commonsense reforms to Social Security, such as raising the retirement age, using a more accurate measure of inflation, providing a minimum anti-poverty benefit, and increasing the number of work years in the benefit calculation, the S.O.S. Act’s massive tax increase would drive down other tax revenues and cause significant harm to the economy.

Ribble and his colleagues should build on the good reforms in this proposal and expand individuals’ options to build financial security in retirement in private accounts. Congress must not fall prey to embracing a bad tax increase that will do more harm than good.