Bill Introduced to Eliminate Federal Income Tax on Social Security Benefits - Rep. Angela Craig (D-MN)
Last week, Rep. Angela Craig (D-MN) introduced a House Bill intended to accomplish two tax-related objectives having an impact on Social Security. Social Security Chief Actuary, Stephen C. Goss, subsequently assessed the financial effects of the proposed Bill, noting that its enactment as designed would “extend the ability of the OASDI program to pay scheduled benefits in full and on time for an additional 20 years. That is, the date of projected depletion of the combined OASI and DI Trust Fund reserves would be moved from 2034 under current law to 2054 assuming enactment of the proposal, under the intermediate assumptions of the 2023 Trustees Report.”
The proposed Bill, titled the Your Earned It, You Keep It Act, would:
- Completely repeal the taxation of Social Security benefits beginning in 2025, with the revenue lost from the program replaced with General Fund transfers to hold the program’s Trust Funds harmless
- Resume payroll (FICA) taxes on income above $250,000 beginning in 2025, with the additional tax on earnings credited to taxpayers in the calculation of their full retirement age benefit (PIA).
On her website, Rep. Craig describes the proposed legislation this way: “This bill is a win-win – it’s a tax cut for seniors and a way to ensure more Americans can depend on the Social Security benefits they’ve earned. And on top of that, it’s fiscally responsible,” said Rep. Craig. “I’m leading the charge on this issue in Congress because we need to get money back in the pockets of middle-class Americans. The You Earned It, You Keep It Act will help us get it done.”
Read Rep. Craig’s press release on the Bill here.
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