Skip to main content
Tags: social security

New Congress May End Taxing Social Security Benefits

New Congress May End Taxing Social Security Benefits
(Dreamstime)

By    |   Monday, 27 February 2023 07:58 PM EST

More than half of Social Security recipients pay, or soon will, taxes on their benefits, and that number will only increase in the years to come.

"Every year, millions of seniors become eligible for either Social Security or tier I railroad retirement benefits,” Bob Carlstrom, Association of Mature American Citizens founder and president, said. “After working for decades, paying taxes on their hard-earned income to fund these federal programs, some seniors are forced to pay income tax on the benefits they receive from the federal government,” he added.

Before 1984, seniors’ Social Security was exempt from federal taxation, but a law that year changed the rules, making any individual who has an income of up to $34,000 eligible to pay taxes on up to 50% of their benefits.

Important: You can increase your Social Security payouts by up to $188,000 and it’s legal! See More Here

And those making over $34,000 have to pay taxes on up to 85% of their benefits. For married couples, a Social Security benefits tax on up to 85% hits automatically when a joint return shows $44,000 or more in income.

With the average seniors income today at $47,620, according to Census Bureau data, most beneficiaries are now paying a significant amount of retirement income in the form of taxes.

Critics of the law say retirees are paying a double tax, and thresholds for income were established in 1984, updated in 1993, but never indexed for inflation.

“Taxing benefits which were created from already taxed funds is nonsensical and curtails retirement benefits seniors have been promised. Seniors deserve to reap the full benefits of their hard work from career-long contributions to Social Security and the Railroad Retirement Plan,” Carlstrom said.

When the thresholds were created, most Social Security beneficiaries paid little or no tax on their benefits. But with inflation and rising incomes, those thresholds became less meaningful, leaving most beneficiaries paying tax.

Congress has become increasingly concerned about the failure to index for inflation and the growing burdens placed by these taxes on seniors.

In 2022, Rep. Angie Craig, D-Minn., introduced the “You Earned It, You Keep It Act,” which would eliminate federal taxes on Social Security.

And Republicans led by Rep. Thomas Massie, R-Ky., have introduced a similar bill, H.R. 6590 or the “Senior Citizens Tax Elimination Act,” which assists middle-class seniors by eliminating the unjust double-tax on Social Security benefits. 

With Republicans now holding the House majority, Massie “is likely to reintroduce the legislation in the 118th Congress,” spokesman John Kennedy told Newsmax.

The bill, originally introduced in 2003 by Rep. Ron Paul, R-Texas, has been reintroduced by Massie in each Congress since he took office in 2012.

"Although seniors have already paid tax on their Social Security contributions via the payroll tax, they are still required to list these benefits as taxable income on their tax returns," Rep. Massie said when he reintroduced the bill in February 2022.

He added: "This is simply a way for Congress to obtain more revenue for the federal government at the expense of seniors who have already paid into Social Security. My bill would exempt Social Security retirement benefits from taxation and boost the retirement income of millions of older Americans."

The Republican bill — which died in the last Congress — had 28 co-sponsors, all Republican.

“For decades, seniors have paid into Social Security with their tax dollars. Now, when many seniors are on a fixed income and struggling financially, they are being double-taxed because of income taxes on their Social Security benefits,” Rep. Daniel Webster, R-Fla., said last year.

At least a dozen states also tax Social Security income, but four states are considering eliminating such levies: Kansas, Minnesota, Missouri, and Utah.

Social Security Benefits Info: Increase your monthly Social Security check by $1,000 a month! Find out the loopholes, See More Here

© 2024 Newsmax. All rights reserved.


Newsfront
More than half of Social Security recipients pay, or soon will, taxes on their benefits, and that number will only increase in the years to come. "Every year, millions of seniors become eligible for either Social Security or tier I railroad retirement benefits," Association...
social security
638
2023-58-27
Monday, 27 February 2023 07:58 PM
Newsmax Media, Inc.

Sign up for Newsmax’s Daily Newsletter

Receive breaking news and original analysis - sent right to your inbox.

(Optional for Local News)
Privacy: We never share your email address.
Join the Newsmax Community
Read and Post Comments
Please review Community Guidelines before posting a comment.
 
TOP

Interest-Based Advertising | Do not sell or share my personal information

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
America's News Page
© Newsmax Media, Inc.
All Rights Reserved
Download the Newsmax App
NEWSMAX.COM
America's News Page
© Newsmax Media, Inc.
All Rights Reserved