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REFUNDABLE

TRANSITION

BRIDGE CREDIT

How to Soften the Worker Burden During Platform Transition

A refundable federal tax credit, declining linearly over 30 years,

that keeps every worker's effective payroll burden

below the original 12.4% FICA (Federal Insurance Contributions Act) throughout transition.

An Analytical Framing Document

Jason Robertson

v1.0 · Created May 4, 2026 · Updated May 4, 2026

Ohio · 2026

The Problem This Document Addresses

During the platform's transition years, working-age Americans face a real concern that the existing models don't fully address: the effective payroll burden during the 30-year period when the new system is building up but the old system is still being wound down. This document articulates a specific mechanism — a Refundable Transition Bridge Credit — that keeps the worker burden manageable throughout the transition without breaking the platform's long-run architecture.

Why This Question Matters

The Combined Reform Model documents the mathematical transformation: $63T in unfunded Social Security liability becomes $82B in peak transition borrowing under the v2.0 architecture. The math works at the system level. But system-level math doesn't fully answer a different question: what does the transition feel like for an individual worker who is contributing to the new system while their generation is still funding the old?

The honest answer in the v2.0 model is that workers contribute 12% to the new system (8.4% to their individual 401(k), 2.4% to the Sovereign Fund). The old FICA was 12.4% combined. Mathematically, the new burden is slightly lower than the old. But the math obscures a real issue: in early transition years, the new system's accumulated balance is small. A worker phased into the new system in Year 5 has only a few years of contributions in their balance. Their effective benefit per dollar contributed is much lower than what continued FICA would have provided through Social Security, because the new system hasn't matured enough to deliver compound returns.

This is the transition gap that bridge credits address. The credit compensates workers for the early-years asymmetry where they pay full new-system contributions but their accumulated balances are too small to generate meaningful retirement value. Without bridge support, the workers most affected by the transition (those phased in during early years) bear the highest implicit cost. Bridge credits redistribute this cost across decades and across cohorts more equitably.

The Question This Document Answers

Can the platform be modified to provide meaningful relief to working-age individuals during transition years without breaking the long-run architecture? This document answers yes, with detailed math showing how, and honest acknowledgment of the trade-offs.

“System-level math says the transition works. Worker-level math says early-cohort workers bear an implicit cost the system math obscures. Bridge credits redistribute that cost more equitably without breaking the architecture.”

How the Credit Works

The Refundable Transition Bridge Credit is a federal tax credit available to all working-age Americans contributing to the new system during transition years. The credit equals a percentage of each worker's new-system contribution, with the percentage declining linearly from 30% in Year 1 to 0% by Year 30.

Mechanical Specification

How the credit is calculated • Credit rate (Year N) = 30% × MAX(0, 1 - (N-1)/30) • Year 1 credit rate: 30.0% • Year 5 credit rate: 26.0% • Year 10 credit rate: 21.0% • Year 15 credit rate: 16.0% • Year 20 credit rate: 11.0% • Year 25 credit rate: 6.0% • Year 30 credit rate: 0.0% (credit fully phased out) • Year 31+: no bridge credit available • Per-worker credit = (Worker's new-system contribution) × (Credit rate for that year)

Refundability

The credit is refundable, meaning workers with no federal income tax liability still receive the full credit value as a direct payment from the IRS (Internal Revenue Service) during tax filing. This is critical because it ensures the relief reaches lower-income workers who may not owe federal income tax but still pay the full new-system contribution through payroll deductions. Without refundability, the credit would only benefit higher-income workers — the opposite of what bridge support should do.

Refundability follows the same pattern as the Earned Income Tax Credit (EITC), which has been operating successfully since 1975 and currently distributes approximately $60-70 billion annually to working-poor households. The IRS infrastructure for handling refundable credits is mature, well-tested, and operationally proven. Adding the bridge credit to the existing tax filing process is administratively straightforward.

Per-Worker Impact

The credit produces meaningful per-worker relief during transition years. The table below shows the effective payroll burden after applying the bridge credit, compared to the baseline 12% new-system contribution and the original 12.4% FICA.

Year | Wage | 12% Contrib | Bridge Credit | Effective Burden | vs Old FICA
1 | $71,800 | $8,616 | $2,585 | 8.40% | -4.00 pp
5 | $80,800 | $9,697 | $2,521 | 8.88% | -3.52 pp
10 | $93,700 | $11,242 | $2,361 | 9.48% | -2.92 pp
15 | $108,600 | $13,032 | $2,085 | 10.08% | -2.32 pp
20 | $125,900 | $15,108 | $1,662 | 10.68% | -1.72 pp
25 | $146,000 | $17,515 | $1,051 | 11.28% | -1.12 pp
30 | $169,200 | $20,304 | $203 | 11.88% | -0.52 pp
31+ | growing | 12% steady | $0 | 12.00% | -0.40 pp

The pattern matters: every worker during transition pays a lower effective burden than the original FICA, with the largest relief in early years when accumulated balances are smallest, and the relief tapering smoothly as the system matures. This is the design intent. Workers who would otherwise bear the highest implicit transition cost get the largest direct relief. Workers in late transition years, whose balances have had time to compound, get smaller relief because they need less.

System-Level Cost

At the system level, the bridge credit produces approximately $2.29 trillion in cumulative federal outflows over years 1-30. Annual costs follow an inverted U-shape: small in early years (because the new-system population is small), peaking around years 15-20 (when population growth and credit rate balance), and declining to near-zero by Year 30 (as the rate phases out).

Year | Workers in New System | Total Contribution | Bridge Credit Cost | Credit as % of Contribution
1 | 3.1M | $27.1B | $8.1B | 30.0%
5 | 16.1M | $155.8B | $40.5B | 26.0%
10 | 32.9M | $370.3B | $77.8B | 21.0%
15 | 50.7M | $660.2B | $105.6B | 16.0%
20 | 69.2M | $1,046.2B | $115.1B | 11.0%
25 | 88.7M | $1,554.4B | $93.3B | 6.0%
30 | 109.2M | $2,216.9B | $22.2B | 1.0%
Total | — | — | $2.29T | —

Peak annual cost reaches approximately $115B in Year 20. This is roughly 0.4% of US GDP at the time, comparable to the size of established refundable credit programs like the Premium Tax Credit (which currently costs approximately $80-100B annually). The total $2.29T over 30 years is approximately the size of the COVID-19 American Rescue Plan ($1.9T in 2021), spread over 30 years rather than a single year.

“The credit produces $2.3 trillion in worker relief over 30 years. That's not a number from nowhere — it's an explicit transfer designed to compensate workers for bearing transition costs that the system math otherwise leaves invisible.”

Fiscal Impact and Architectural Resilience

The bridge credit substantially increases peak transition borrowing. The honest question is whether the platform's architecture can absorb this additional pressure. The Combined Reform Model's stress-test scenarios provide the answer.

Peak Borrowing With Bridge Credit

In the v2.0 model without bridge credits, baseline peak transition borrowing was $82 billion in Year 18 (2043). With the bridge credit added, baseline peak borrowing increases to approximately $1.88 trillion in Year 21 (2046). This is a substantial increase, and the platform should be honest about it: $1.88T at peak is real fiscal pressure, equivalent to approximately 6.5% of US GDP in 2046.

For context, peak federal deficits during the COVID-19 response reached approximately $3T in single years. The bridge credit's $1.88T peak is below that threshold and is sustained over a 25-year transition period rather than a single year. It is not unprecedented; it is significant.

Stress-Test Performance

All five stress-test scenarios (Lost Decade, Early Crash, Stagflation, Demographic Shock, Compound Crisis) continue to pass under the bridge credit architecture. Peak borrowing across scenarios ranges from $1.86T (Compound Crisis) to $1.92T (Stagflation), all within 50% of the with-bridge baseline.

Scenario | Peak Borrowing | Year of Peak | SF Balance Yr 60 | Verdict
Baseline (6%) | $1,879B | 2046 | $121.9T | Reference
Lost Decade | $1,890B | 2046 | $120.8T | PASSES
Early Crash | $1,882B | 2046 | $121.6T | PASSES
Stagflation | $1,918B | 2046 | $117.4T | PASSES
Demographic Shock | $1,884B | 2046 | $97.4T | PASSES
Compound Crisis | $1,860B | 2046 | $120.6T | PASSES

The architecture absorbs the bridge credit without breaking. The key reasons are: (1) the Sovereign Fund continues to receive contributions and grow normally, since the bridge credit is paid by general revenue rather than reducing fund inflows; (2) the credit phase-out by Year 30 means no continuing fiscal obligation after the system matures; (3) the platform's long-run surpluses (post-Year 30) easily absorb the cumulative bridge credit cost over the remaining decades.

Long-Run Recovery

The cumulative fiscal position recovers fully under the bridge credit architecture. Year 60 cumulative position with bridge credit: +$40.6T (vs +$48.9T without bridge credit, a difference of $8.3T after compounding). The bridge credit's $2.29T nominal cost grows to $8.3T after 60 years of debt service compounding at 3%. This is the implicit interest cost of providing relief during transition rather than later.

The Sovereign Fund itself reaches the same Year 60 balance ($121.9T) regardless of whether bridge credits are paid. This is because the credits don't reduce fund inflows; they're a separate federal outflow that affects general fiscal position but not fund accumulation. The platform's primary engine — the Sovereign Fund — operates the same way with or without the bridge.

Honest Trade-Off Acknowledgment

What the bridge credit costs the platform • Peak transition borrowing increases from $82B to $1.88T (a 23x increase) — this is real fiscal pressure during years 15-30. • Year 60 cumulative position is $8.3T lower than without bridge ($40.6T vs $48.9T) due to debt service compounding. • The deepest deficit period extends from years 10-30, longer than the v2.0 architecture's deepest period (years 15-25). • The platform must absorb $1.88T peak in real political environments where federal debt is already politically charged. • Implementation requires Congressional appropriation and IRS administrative readiness during years 1-30.

What the bridge credit gains for the platform • $2.29T in direct worker relief during transition years, distributed across approximately 200 million unique workers. • Effective payroll burden stays below 12.4% (the original FICA level) throughout the entire transition period. • Workers most affected by transition (early cohorts with smallest accumulated balances) receive the largest relief. • The platform becomes substantially more politically defensible: the question shifts from “will workers pay more during transition?” to “will workers pay less than they did under the old system?” and the answer is yes. • The credit's clear design (refundable, phased, sunsetting) is legible to ordinary citizens, supporting platform legitimacy. • Self-terminating design means no permanent fiscal obligation — the credit ends in Year 30 by structural design.

“$1.88T peak borrowing is real. So is $2.29T in worker relief. The platform can absorb both. The question is whether the political coalition wants to.”

Alternatives Considered

This document proposes Option 1 (Refundable Transition Bridge Credit) as the platform's preferred bridge mechanism. Five options were considered. The selection rationale and trade-offs of each are articulated here for transparency, so subsequent platform refinement can revisit the choice if other options prove more attractive.

Option 1 (Selected): Refundable Transition Bridge Credit

A federal refundable credit equal to a percentage of each worker's new-system contribution, declining linearly over 30 years. Selected because: (a) most legible to readers, since refundable tax credits are a familiar mechanism Americans already understand from the EITC and Premium Tax Credit; (b) cleanly self-terminating with no permanent fiscal obligation; (c) operationally feasible using existing IRS infrastructure; (d) progressive in effect because lower-income workers receive proportionally larger relief through refundability.

Selection trade-off: increases peak transition borrowing significantly ($1.88T peak). The architecture absorbs this, but it's a real fiscal cost during years where federal debt is already politically charged.

Option 2: Dollar-for-Dollar FICA Offset

Every dollar contributed to the new system reduces FICA owed by one dollar, capped at total FICA liability. Workers under 55 see a stable total payroll burden during transition rather than a doubled one. Cleanest worker-level design but produces dramatically higher peak borrowing than Option 1 because it removes substantial revenue flowing to the old system to fund grandfathered beneficiaries. Estimated peak borrowing under this option: $5-8T during transition. Architecture might not absorb this without significant additional design work.

Option 3: Combined Payroll Cap

Statutory cap stating that no worker's combined payroll burden (FICA + new system) can exceed 15% of covered earnings during transition years. Politically attractive because the cap is visible and intuitive. Reduces Sovereign Fund accumulation during transition because the new-system contribution rate is reduced when the cap binds. The reduction in fund accumulation delays compound benefits, partially offsetting the worker relief. Net architectural impact: similar to Option 1 in cost but with delayed compound benefit timing.

Option 4: Sovereign Fund Bridge Loan

The Sovereign Fund accepts a structured deficit during years 1-30 — essentially borrows from its future self — to provide bridge credits to workers. The fund's growing balance carries the interest cost of the deficit. By Year 60, the fund is large enough that the bridge debt is fully retired. Architecturally elegant because the platform self-finances its own transition without affecting general federal budget. Requires the Sovereign Fund Governance Design document's framework to explicitly authorize this kind of internal cross-temporal borrowing under defined rules.

Did not select for Option 1 status because: (a) operationally more complex than Option 1, requiring fund governance modifications that haven't been articulated in the existing governance design; (b) creates dependency between Sovereign Fund design and bridge credit availability that complicates each component's independent evaluation. Worth revisiting in v2.2 or later as a possible architectural refinement.

Option 5: Income-Tiered Bridge Relief

Workers below median household income receive a substantial bridge credit; workers in middle quintiles receive a smaller credit; high-income workers (top 20%) receive no relief. Most progressive design but adds complexity through income thresholds, phase-outs, and gaming considerations. Did not select because: (a) refundability in Option 1 already produces progressive distribution effects without explicit thresholds; (b) the broader base of Option 1 (all workers receive some relief) builds broader political coalition than tiered design; (c) administrative complexity reduces the credit's legibility.

Why Option 1 Wins on Balance

Option 1 is not the cheapest, the most progressive, or the most architecturally elegant. It is the most legible, the most administratively straightforward, the most politically defensible, and the most easily understood by ordinary citizens. These are not small advantages. The platform's success depends on building a sustained political coalition over multiple decades. Mechanisms that ordinary citizens can understand and verify are mechanisms that build coalitions; mechanisms that require expert interpretation tend to fail under sustained political pressure.

If subsequent platform versions identify ways to combine Option 1's legibility advantages with Option 4's architectural elegance, that would be an improvement. The current selection is Option 1 because it is implementable now using existing federal tax administration infrastructure, not because alternatives are unworthy of further analysis.

“Refundable tax credits are not the cheapest mechanism. They are the most defensible mechanism. The platform's transition architecture survives partly because the bridge credit is something an ordinary citizen can understand without an economics degree.”

Implementation Considerations

Adopting the bridge credit requires legislative drafting, IRS administrative readiness, and operational coordination. This section articulates what implementation would require and how the credit fits within existing federal tax infrastructure.

Legislative Requirements

The bridge credit requires federal legislation establishing the credit's structure, eligibility, formula, and sunset. Legislative drafting should specify: (a) credit availability for any worker contributing to the new platform retirement system during transition years 1-30; (b) credit calculation formula (linear decline from 30% to 0%); (c) refundability provision matching the Earned Income Tax Credit's structure; (d) administrative procedures for IRS implementation; (e) annual cost reporting requirement to Congress; (f) Sunset provision automatically terminating the credit at end of Year 30 unless explicitly extended through new legislation.

The legislation can be a standalone bridge credit act or a section within the broader platform implementation legislation. Standalone passage may be politically easier in some Congressional configurations because it can advance as a worker-protection measure without simultaneously requiring full platform adoption. Either path produces equivalent operational outcomes.

IRS Administrative Implementation

The IRS already administers refundable tax credits at scale. Adding the bridge credit requires: (a) new tax form line and supporting schedule for credit calculation; (b) updates to the IRS computer systems handling credit verification; (c) employer reporting modifications so worker contributions to the new system are reported on W-2 forms in a way that supports credit calculation; (d) taxpayer education materials explaining the credit's availability and computation.

None of these are technically novel. Estimated implementation timeline from legislation passage to first credit availability: 12-18 months. This timing matches the platform's broader implementation timeline (the platform's pre-enactment phase establishes the legal foundation in years -3 to 0; the bridge credit can be operationally ready by Year 1 using this implementation window).

Funding Mechanism

During years 1-12 (before Sovereign Fund disbursements begin), bridge credit costs are paid from general federal revenue. The federal government may need to issue additional debt to cover these costs during transition years; this borrowing is reflected in the model's peak transition borrowing figure.

From Year 12 onward, the Sovereign Fund begins disbursements. The platform's existing architecture uses these disbursements primarily to offset old-system deficit (the Q column in the cash flow models). The bridge credit cost in years 12-30 could be partially funded by Sovereign Fund disbursements rather than continued general revenue, but this would reduce the disbursement amount available for old-system offset, potentially increasing pressure on the old system. The current model assumption is that bridge credits are entirely funded by general revenue, which is the most fiscally conservative assumption.

Interaction with Existing Tax Provisions

The bridge credit operates separately from existing federal tax credits and does not modify the EITC, Child Tax Credit, Premium Tax Credit, or other existing provisions. A worker may receive multiple credits in the same tax year if they qualify under each program's separate criteria. The IRS infrastructure handling multiple refundable credits is already mature; adding the bridge credit follows established patterns.

State income tax interactions vary by state. Most states with income taxes follow federal definitions for taxable income, meaning state income tax base may include or exclude the bridge credit depending on each state's conformity rules. State-specific adjustments are operational details that state revenue departments would address during implementation.

Anti-Gaming Provisions

The credit's structure produces limited gaming opportunities because it's tied to actual new-system contributions, which are payroll-deducted from verified wages. The most plausible gaming attempts would involve artificial contribution structures (e.g., a high-income worker contributing more than necessary to increase their credit). The credit formula includes a cap matching the standard 12% of covered earnings, preventing this manipulation.

More subtle gaming around employment classification (for example, classifying contractors as employees specifically to qualify for credits) is addressed through the same anti-misclassification provisions that already apply to FICA and other payroll-based federal programs. The bridge credit doesn't create new gaming risks beyond those already present in the broader payroll tax system.

“Refundable tax credits at scale are routine for the IRS. The bridge credit's implementation is operationally a software update, not an institutional invention.”

Honest Acknowledgments

This document proposes a substantive modification to the platform's transition architecture. The honest acknowledgment of what the modification can and cannot do is part of the design, not separate from it.

What the Bridge Credit Achieves

Real benefits the credit produces • Worker effective burden stays below 12.4% throughout transition (range: 8.4% in Year 1 to 11.9% in Year 30). • Approximately $2.29T in direct relief flows to working-age Americans during years 1-30. • Lower-income workers benefit proportionally more because the credit is refundable. • The architecture continues to pass all stress-test scenarios. • The Sovereign Fund's Year 60 balance is unchanged ($121.9T) because credits don't reduce fund inflows. • Platform legitimacy strengthens because the transition is demonstrably better for workers than the status quo, not just better in expectation. • The mechanism is legible: any citizen can understand what they get and why.

What the Bridge Credit Costs

Real costs the credit imposes • Peak transition borrowing increases from $82B to $1.88T (a 23x increase). • Year 60 cumulative position is $8.3T lower than without bridge ($40.6T vs $48.9T) due to compounded debt service. • The federal government must issue substantial transition debt during years 5-25. • Political opposition will use the increased borrowing as evidence the platform is fiscally irresponsible, regardless of the long-run absorption. • The credit creates a 30-year fiscal commitment that future Congresses might attempt to modify or eliminate. • Administrative complexity adds modest overhead to IRS operations and W-2 reporting.

What the Bridge Credit Cannot Do

Limits the credit doesn't address • Workers who choose not to participate in the new system entirely (informal economy, undocumented workers, etc.) receive no benefit from the credit. • The credit doesn't compensate for non-payroll costs of transition (e.g., changes in employer-provided retirement matching, shifts in insurance markets). • The 30-year sunset means workers entering the workforce after Year 30 receive no bridge credit, even if they argue similar transition logic should apply. • The credit doesn't address inter-cohort fairness in detail — a worker first phasing in during Year 25 receives less per-year relief than a worker in Year 5, despite arguably needing similar support. • The credit cannot eliminate political opposition to the platform; it can only make the opposition's strongest argument ("workers will pay more") factually false during transition.

What This Means for the Platform

The Refundable Transition Bridge Credit is the platform's substantive answer to the question of how to bridge worker burden during transition. The answer is not free — it costs the platform $1.88T at peak borrowing and $8.3T in long-run cumulative position. The answer is also not optional in any practical political sense: a platform that asks workers to pay 12% to a new system while their generation also funds the old will face opposition from working-age voters who experience the transition as a tax increase rather than as a long-run improvement, even if the math says otherwise.

The bridge credit converts the political dynamic. Instead of asking workers to trust that long-run benefits will arrive eventually, the platform delivers immediate visible relief through a familiar mechanism (a refundable tax credit) that any citizen can verify on their own tax return. This is the political work that mathematical analysis alone cannot perform: making the platform's promise tangible to the people whose votes it requires.

“The platform asks workers to participate in a 60-year transition. The bridge credit makes the first 30 years better than the status quo for every working-age American. That's the political price of building a coalition durable enough to actually deliver the long run.”

What This Document Establishes

This document responds to a citizen-originated question about whether the platform can offset higher costs during implementation when workers are paying for the new system in parallel with continuing FICA. The answer is yes, through a Refundable Transition Bridge Credit that delivers $2.29T in worker relief during transition while preserving the platform's long-run architecture.

The Pattern This Continues

This is the third instance of the platform engaging seriously with an external concern through analytical work rather than just response documents. In v1.9, the platform acknowledged Gemini's review identified four vulnerabilities. In v2.0, the platform delivered four work products addressing those vulnerabilities. In v2.1, the platform extends the same pattern to a citizen question about transition burden.

The pattern's continuation matters. Future questions — whether from citizens, external reviewers, political stakeholders, or implementation specialists — will be addressed through the same approach: acknowledge what's being asked, articulate specific responses, identify what the response gains and costs, and produce analytical work the platform can defend rather than just acknowledge.

What's Different About v2.1

Versions 1.0 through 2.0 articulated the platform's structural design in increasing detail. Version 2.1 begins a different kind of work: refining the platform's transition mechanics. The bridge credit doesn't change what the platform ultimately delivers (the same Sovereign Fund, the same wage floors, the same education and healthcare architecture). It changes how the platform reaches that destination, by softening the burden on the workers whose participation makes the long-run architecture possible.

Subsequent versions will likely continue this transition mechanics work. Open questions identified during this analysis include: (1) whether the Sovereign Fund Bridge Loan (Option 4) could be combined with the bridge credit to reduce general fund borrowing pressure; (2) whether mental health workforce expansion, Civic Infrastructure, and Future Capacity Fund pillars need similar bridge mechanisms during their respective buildouts; (3) whether the bridge credit should extend beyond Year 30 in some attenuated form for late-cohort workers; and (4) how the bridge credit interacts with the H column tax credit ladder for workers being phased out of the old system.

What the Platform Asks of Readers

Readers who find the bridge credit's design compelling are invited to engage with specific elements (the linear decline structure, the 30-year sunset, the refundability provision) rather than treating the entire mechanism as a take-it-or-leave-it package. Readers who find the increased peak borrowing concerning are invited to engage with Options 2-5 from the Alternatives Considered section, all of which produce different fiscal trade-offs that may match different political priorities. Readers who find the entire premise (that workers need bridge support during transition) flawed are engaged in a different conversation about whether transition burden is real, which the worker-level math in this document attempts to demonstrate it is.

The platform's commitment continues: take serious questions seriously, articulate specific responses, acknowledge what remains unresolved. The bridge credit is one specific response to one specific question. Other questions will produce other responses. The pattern is what makes the platform's analytical foundation worth building on.

“The bridge credit makes the first 30 years of the transition demonstrably better than the status quo for every working-age American. That's not a theoretical claim; it's a mathematical result the model verifies.”

Jason Robertson

Ohio, May 4, 2026