This Bill Aims to Fix Social Security by Eliminating Taxes on Benefits (2024)

We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. Learn more.

A group of Democratic lawmakers wants to eliminate taxes on Social Security benefits as part of a proposal they claim could help fund the flagging program.

Rep. Angie Craig, D-Minn., introduced the You Earned It, You Keep It Act in the House of Representatives in late January. Since then, 10 House members have joined as cosponsors on the bill, which was referred to a health subcommittee.

The bill involves both sides of the taxation process: In addition to ending the federal taxes on the Social Security payments received by about 70 million Americans every month, it would also significantly increase how much of someone's wages are subject to Social Security taxes in a year.

Ads by Money. We may be compensated if you click this ad.AdThis Bill Aims to Fix Social Security by Eliminating Taxes on Benefits (1)

Put a gold-backed IRA into your golden years

Gold IRAs are similar to traditional retirement accounts, but they are backed by investments in gold and other precious metals, such as silver, platinum, and palladium. To get started, click on your state.

Invest in Gold

Currently, about 40% of beneficiaries pay taxes on their Social Security benefits. Critics of this taxation, which applies when an individual has $25,000 or more of income, argue that it unnecessarily chips away from Americans' retirement funds.

"This is a bill that would essentially have our nation's seniors stop paying federal taxes on their Social Security income. I view it as double taxation, and this would help put money back into the pocket of retirees," Craig says.

Who pays Social Security taxes?

Benefits are generally not taxed at the federal level for people whose only source of retirement income is Social Security. But single filers with between $25,000 and $34,000 of income in a year may have to pay federal taxes on up to 50% of their benefits. And up to 85% of benefits can be taxable for people with incomes above $34,000.

(Note: The income thresholds are based on a unique definition of "combined income," which is different than your adjusted gross income.)

The bill would eliminate federal taxes on benefits at all income levels. State Social Security taxes — paid by some beneficiaries in nearly a dozen states, including Montana, Utah and Vermont — would be unaffected.

The You Earned It, You Keep It Act would also bring in more tax revenue by adjusting the cutoff point when Americans are no longer subject to payroll taxes that go toward Social Security. Currently, the 6.2% Social Security tax applies to a max of $168,600 of wages. The bill would add Social Security taxes on earnings above $250,000.

"These higher earners are going to be getting their Social Security later in life without being taxed on it under my proposal," Craig says. "This is just asking them to pay Social Security tax on 100% of their income just like Americans who make up to $168,000 a year are asked to do."

Could changing taxes save Social Security?

In an analysis of Craig's proposal, Stephen Goss, chief actuary at the Social Security Administration, said the bill would help Social Security stay solvent, buying two decades of time for a program heavily relied upon by older adults and people with disabilities, among others.

Social Security benefits are partially being paid with surpluses in trust funds that are projected to run dry in 2035, at which point retirees' benefits would be cut by about 20%. Goss estimated the projected date of depletion would move back to 2054 if the bill were enacted.

This isn't the first proposed fix. Over the years, other ideas for addressing Social Security funding problems have included reducing the cost-of-living adjustments or changing the ages when people can file for Social Security. But any proposal that has the effect of reducing benefits tends to be unpopular, and legislation to that effect hasn't gone anywhere in Congress. (Craig, for instance, also introduced her bill in 2022.)

Nicole Asher, senior vice president and senior wealth management advisor at Greenleaf Trust, says she's in favor of the You Earned It, You Keep It Act because it would bolster Social Security for decades while only raising taxes on a small part of the population.

“I know that higher-income earners will not be happy about it, but it makes sense for them to increase that cap,” Asher says.

While Craig's bill probably won’t get bipartisan support in its current form, Republicans have also looked at the idea of eliminating taxes on Social Security benefits in other recent legislative proposals. For example, Rep. Thomas Massie, R-Ky., introduced a bill last year to end taxes on Social Security benefits, but it did not include any tax increases.

Ads by Money. We may be compensated if you click this ad.AdThis Bill Aims to Fix Social Security by Eliminating Taxes on Benefits (2)

Qualify for up to 10% in FREE silver

This Bill Aims to Fix Social Security by Eliminating Taxes on Benefits (3)

Invest in Gold

Qualify for up to $10kin FREE precious metals*
  • Diversify your portfolio by investing in a precious metal IRA or buy gold and silver directly
  • Highest price buyback guarantee
  • A+ Rating from BBB, AAA Rating from Business Consumers Alliance

Top Precious Metals Company on Inc. 5000

This Bill Aims to Fix Social Security by Eliminating Taxes on Benefits (4)

Invest in Gold

Top Ranked Gold Company on the Inc. 5000
  • Lowest price guarantee and no buyback fees
  • Exclusively recommended by Bill O'Reilly, Rick Harrison, & Others
  • A+ Rating from BBB

Price Match Guarantee, No Buyback Fees

This Bill Aims to Fix Social Security by Eliminating Taxes on Benefits (5)

Invest in Gold

Longest time in business with 27 years of experience
  • Recommended by Glenn Beck and Judge Andrew P. Napolitano
  • Trusted by over 90,000 customers
  • Rated excellent on Truspilot & AAA on Business Consumer Alliance

Most IRAs Qualify for “No Fee For Life”

This Bill Aims to Fix Social Security by Eliminating Taxes on Benefits (6)

Invest in Gold

Most IRAs Qualify for “No Fee For Life”
  • 50 years of collective, combined experience in the markets
  • Expert guidance to open a gold IRA account
  • Low-Cost Bullion, IRA eligible, and numismatic coins available
  • Rated #1 by Consumer Affairs Accredited for 8 years in a row
  • A+ Rating from BBB

View Patriot Gold Group Offer

Up to $10,000 in gold credit

This Bill Aims to Fix Social Security by Eliminating Taxes on Benefits (7)

Invest in Gold

Up to $5,000 in free silverwithqualified purchases
  • No account and maintenance fees for up to10 years
  • Over 20 years of experience in the Gold industry
  • Rated A+ by the BBB and 5-starTrust Link rating

More from Money:

Thousands of Social Security Recipients Will Soon Qualify for Bigger Payments

9 Best Life Insurance Companies of 2024

Older Workers Are Underestimating Their Budgets for Retirement

SHOWHIDE

Ads by Money. We may be compensated if you click this ad.Ad

American Hartford Gold can help you take control of your financial future

Invest in Gold

This Bill Aims to Fix Social Security by Eliminating Taxes on Benefits (2024)
Top Articles
How can I add an image from my PC to my HTML page?
Is Early Loan Repayment Good for You
Barstool Sports Gif
Week 2 Defense (DEF) Streamers, Starters & Rankings: 2024 Fantasy Tiers, Rankings
Wordscapes Level 6030
³µ¿Â«»ÍÀÇ Ã¢½ÃÀÚ À̸¸±¸ ¸íÀÎ, ¹Ì±¹ Ķ¸®Æ÷´Ï¾Æ ÁøÃâ - ¿ù°£ÆÄ¿öÄÚ¸®¾Æ
Seething Storm 5E
Elden Ring Dex/Int Build
Katie Boyle Dancer Biography
Declan Mining Co Coupon
R Tiktoksweets
How do you like playing as an antagonist? - Goonstation Forums
Kris Carolla Obituary
Dark Chocolate Cherry Vegan Cinnamon Rolls
List of all the Castle's Secret Stars - Super Mario 64 Guide - IGN
Talbots.dayforce.com
Form F-1 - Registration statement for certain foreign private issuers
Temu Seat Covers
Maisons près d'une ville - Štanga - Location de vacances à proximité d'une ville - Štanga | Résultats 201
Jackass Golf Cart Gif
Gopher Carts Pensacola Beach
My Dog Ate A 5Mg Flexeril
FREE Houses! All You Have to Do Is Move Them. - CIRCA Old Houses
The value of R in SI units is _____?
Indiana Jones 5 Showtimes Near Jamaica Multiplex Cinemas
Texas Baseball Officially Releases 2023 Schedule
Iban's staff
Clark County Ky Busted Newspaper
School Tool / School Tool Parent Portal
Mcgiftcardmall.con
Pepsi Collaboration
Omaha Steaks Lava Cake Microwave Instructions
Japanese Big Natural Boobs
Bcy Testing Solution Columbia Sc
Shane Gillis’s Fall and Rise
Cpmc Mission Bernal Campus & Orthopedic Institute Photos
Gym Assistant Manager Salary
At Home Hourly Pay
Bustednewspaper.com Rockbridge County Va
Does Target Have Slime Lickers
✨ Flysheet for Alpha Wall Tent, Guy Ropes, D-Ring, Metal Runner & Stakes Included for Hunting, Family Camping & Outdoor Activities (12'x14', PE) — 🛍️ The Retail Market
Fatal Accident In Nashville Tn Today
Unblocked Games 6X Snow Rider
Cvs Minute Clinic Women's Services
Mkvcinemas Movies Free Download
Optimal Perks Rs3
WHAT WE CAN DO | Arizona Tile
Laurel Hubbard’s Olympic dream dies under the world’s gaze
Elizabethtown Mesothelioma Legal Question
Cataz.net Android Movies Apk
Latest Posts
Article information

Author: Mr. See Jast

Last Updated:

Views: 5965

Rating: 4.4 / 5 (75 voted)

Reviews: 90% of readers found this page helpful

Author information

Name: Mr. See Jast

Birthday: 1999-07-30

Address: 8409 Megan Mountain, New Mathew, MT 44997-8193

Phone: +5023589614038

Job: Chief Executive

Hobby: Leather crafting, Flag Football, Candle making, Flying, Poi, Gunsmithing, Swimming

Introduction: My name is Mr. See Jast, I am a open, jolly, gorgeous, courageous, inexpensive, friendly, homely person who loves writing and wants to share my knowledge and understanding with you.