Removing Social Security from Taxable Income could Affect Insolvency Date - Texas A&M University
The Social Security Trust Fund is due to run dry in the mid-2030s. This situation has already been exacerbated by the passage of the Fairness Act in January 2025, which moved the insolvency date up six months.
President Trump would like to remove Social Security income from IRS taxes. As much as this may help out some seniors, it could also result in the Trust Fund becoming insolvent two years earlier. Dennis Jansen for Texas A&M University explains here…
As an example of the leading thoughts on reforming Social Security, the Association of Mature American Citizens (AMAC, Inc.) believes Social Security must be preserved and modernized to meet the demands of 21st-century economics. AMAC’s position is that this can be achieved without payroll tax increases via relatively slight program modifications, including cost-of-living adjustment (COLA) process changes and modifications to the formulas for calculation of payments to higher-income beneficiaries. Changes to the age for maximizing benefits are included in AMAC’s position, along with (1) an increase in the thresholds where benefits are subject to income tax; (2) indexing of these thresholds annually to account for inflation; (3) improved survivor benefits, (4) eliminating the reduction in benefits for those choosing to work before full retirement age; and (5) improved savings tools for future retirees, including a savings account that builds estate value. AMAC is resolute in its mission that Social Security be preserved for current and successive generations and has gotten the attention of lawmakers in D.C., meeting with many congressional offices and staff over the past decade.
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