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An Update on the “You Earned It, You Keep It Act”
H.R. 7084, titled the “You Earned It, You Keep It Act” was introduced in late January of this year by Rep. Angie Craig (D-Minn) and has accumulated 10 cosponsors at this point. It’s primary objective is the elimination of federal income tax on Social Security benefits, funded by a change in the maximum taxable earnings limits. The current cap on earnings subject to payroll tax would be tiered, with the first tier being the current taxable limit of $168,600 remaining, while earnings from $168,601 to $249,999 being untaxed. The payroll tax would resume at $250,000 and would be applied to all earnings beyond that point.
No action has been taken on the bill since its submission, and govtrack.us gives it a 0% chance of enactment, but it’s worthy of note that if enacted the bill is projected to provide about two decades of breathing room for the point of Social Security insolvency.
Taxing Social Security benefits is a frequently recurring item in discussions on the program’s need for reform. Since the thresholds for taxation are not indexed to compensate for rising income, more and more seniors face the prospect of paying federal income tax on their earned benefits. As a result, what was once only intended to affect a few high-income taxpayers has evolved to hurt more than half of retired taxpayers.
U.S. News and World Report contributor Maryalene LaPonsie summarizes the bill in a post on their website, which you can access here.
We seniors really need taxing our social security to STOP. It is so difficult trying to decide what can we do without on basic necessities. Pass this bill. I am not understanding why this bill is not being promoted by all politicians. What a talking point for reelection.
Ron:
Thanks for the comment. As noted in response to a previous reader comment, our AMAC Action subsidiary is tracking this bill (HR 7084) in the current Congressional session and, to-date, there has been no action beyond its January introduction. A check with govtrack.us continues to rate it as having zero chance of enactment as of this date, likely because of Social Security’s other competing issues. Since this taxation accounted for more than $50 billion in revenue for Social Security last year, and since Social Security under current law has no borrowing authority to replace the lost revenue, enactment of the bill would make the long-term financial problems facing the system more problematic.
AMAC’s Social Security Guarantee proposal for Social Security reform includes a recommendation to either eliminate inclusion of Social Security benefits in taxable income or raise the thresholds (which have not been adjusted for inflation since their original adoption decades ago). AMAC believes that this needs to be part of the overall approach to modernizing Social Security to align with 21st-Century economics, and will continue to advocate for the intent of HR 7084 as opportunities develop in the future. To learn more about AMAC’s Social Security Guarantee, visit https://amac.us/social-security-guarantee-2/.
Stay tuned to our daily website (SocialSecurityReport.org) for continued updates on Social Security and its future.
Thanks again for the comment!
Gerry Hafer
AMAC Foundation Social Security Advisor
CONFIDENTIALITY NOTICE: The contents of this message, including any attachments, are confidential and are intended solely for the use of the person or entity to whom the message was addressed. If you are not the intended recipient of this message, please be advised that any dissemination, distribution, forwarding, printing, copying, or use of the contents of this message, and any attached documentation, is strictly prohibited. If you received this message in error, please notify the sender. Please also permanently delete all copies of the original message and any attached documentation. The opinions and interpretations expressed in this message are the viewpoints of the message’s author, a trained advisor accredited under the National Social Security Advisors program of the National Social Security Association, LLC (NSSA). The author, the NSSA, and the AMAC Foundation are not affiliated with or endorsed by the United States Government, the Social Security Administration, or any other state agency.
maybe it would look more appealing to the house and senate if she would stop the S.S. tax in her state first. then introduce to the federal part of the tax.
Kevin:
Thanks for the comment. Good point…we’ll pass this along to our AMAC Action colleagues who track pending legislation.
Gerry Hafer
AMAC Foundation Social Security Advisor
CONFIDENTIALITY NOTICE: The contents of this message, including any attachments, are confidential and are intended solely for the use of the person or entity to whom the message was addressed. If you are not the intended recipient of this message, please be advised that any dissemination, distribution, forwarding, printing, copying, or use of the contents of this message, and any attached documentation, is strictly prohibited. If you received this message in error, please notify the sender. Please also permanently delete all copies of the original message and any attached documentation. The opinions and interpretations expressed in this message are the viewpoints of the message’s author, a trained advisor accredited under the National Social Security Advisors program of the National Social Security Association, LLC (NSSA). The author, the NSSA, and the AMAC Foundation are not affiliated with or endorsed by the United States Government, the Social Security Administration, or any other state agency.
Please please pass the bill you earned it you keep it act.
Freddie:
Thanks for the comment. As noted in response to a previous reader comment, our AMAC Action subsidiary is tracking this bill (HR 7084) in the current Congressional session and, to-date, there has been no action beyond its January introduction. A check with govtrack.us continues to rate it as having zero chance of enactment as of this date, likely because of Social Security’s other competing issues. Since this taxation accounted for more than $50 billion in revenue for Social Security last year, and since Social Security under current law has no borrowing authority to replace the lost revenue, enactment of the bill would make the long-term financial problems facing the system more problematic.
AMAC’s Social Security Guarantee proposal for Social Security reform includes a recommendation to either eliminate inclusion of Social Security benefits in taxable income or raise the thresholds (which have not been adjusted for inflation since their original adoption decades ago). AMAC believes that this needs to be part of the overall approach to modernizing Social Security to align with 21st-Century economics, and will continue to advocate for the intent of HR 7084 as opportunities develop in the future.
Stay tuned to our daily website (SocialSecurityReport.org) for continued updates on Social Security and its future.
Thanks again for the comment!
Gerry Hafer
AMAC Foundation Social Security Advisor
CONFIDENTIALITY NOTICE: The contents of this message, including any attachments, are confidential and are intended solely for the use of the person or entity to whom the message was addressed. If you are not the intended recipient of this message, please be advised that any dissemination, distribution, forwarding, printing, copying, or use of the contents of this message, and any attached documentation, is strictly prohibited. If you received this message in error, please notify the sender. Please also permanently delete all copies of the original message and any attached documentation. The opinions and interpretations expressed in this message are the viewpoints of the message’s author, a trained advisor accredited under the National Social Security Advisors program of the National Social Security Association, LLC (NSSA). The author, the NSSA, and the AMAC Foundation are not affiliated with or endorsed by the United States Government, the Social Security Administration, or any other state agency.
Come on, pass it NOW. This would be a great thing for Seniors.
Ronald:
Thanks for the comment. Our AMAC Action subsidiary is tracking this bill (HR 7084) and, to-date, there has been no action beyond its January introduction. Please note that AMAC’s Social Security Guarantee proposal for Social Security reform includes a recommendation to either eliminate inclusion of Social Security benefits in taxable income or raise the thresholds (which have not been adjusted for inflation since their original adoption decades ago). It’s doubtful that HR 7084 will be passed, given the significance of this piece of Social Security revenue ($50.7 billion last year) and the program’s already precarious financial situation.
Stay tuned to our daily website (SocialSecurityReport.org) for continued updates on Social Security and its future.
Again, thank you for your comments!
Gerry Hafer
AMAC Foundation Social Security Advisor
CONFIDENTIALITY NOTICE: The contents of this message, including any attachments, are confidential and are intended solely for the use of the person or entity to whom the message was addressed. If you are not the intended recipient of this message, please be advised that any dissemination, distribution, forwarding, printing, copying, or use of the contents of this message, and any attached documentation, is strictly prohibited. If you received this message in error, please notify the sender. Please also permanently delete all copies of the original message and any attached documentation. The opinions and interpretations expressed in this message are the viewpoints of the message’s author, a trained advisor accredited under the National Social Security Advisors program of the National Social Security Association, LLC (NSSA). The author, the NSSA, and the AMAC Foundation are not affiliated with or endorsed by the United States Government, the Social Security Administration, or any other state agency.
The “You Earned It, You Keep It Act” is just that, an act. All talk and no ‘action’. Anything that involves taxing the rich is rarely passed.
Will:
Thanks for the comment. Our AMAC Action subsidiary is tracking this bill (HR 7084) and, to-date, there has been no action beyond its January introduction. Please note that AMAC’s Social Security Guarantee proposal for Social Security reform includes a recommendation to either eliminate inclusion of Social Security benefits in taxable income or raise the thresholds (which have not been adjusted for inflation since their original adoption decades ago). It’s doubtful that HR 7084 will be passed, given the significance of this piece of Social Security revenue ($50.7 billion last year) and the program’s already precarious financial situation.
Stay tuned to our daily website (SocialSecurityReport.org) for continued updates on Social Security and its future.
Again, thank you for your comments!
Gerry Hafer
AMAC Foundation Social Security Advisor
CONFIDENTIALITY NOTICE: The contents of this message, including any attachments, are confidential and are intended solely for the use of the person or entity to whom the message was addressed. If you are not the intended recipient of this message, please be advised that any dissemination, distribution, forwarding, printing, copying, or use of the contents of this message, and any attached documentation, is strictly prohibited. If you received this message in error, please notify the sender. Please also permanently delete all copies of the original message and any attached documentation. The opinions and interpretations expressed in this message are the viewpoints of the message’s author, a trained advisor accredited under the National Social Security Advisors program of the National Social Security Association, LLC (NSSA). The author, the NSSA, and the AMAC Foundation are not affiliated with or endorsed by the United States Government, the Social Security Administration, or any other state agency.
So $168,000 is the current cap. Most middle class working people make way less that $168,00. So they pay 6.4% on 100% of their income. But high earners those that make over $168,000 pay no more social security taxes. Thus getting a 6.4% raise. Confess wants to keep kicking the can down the road until it’s too late. They don’t want to break their promise of not raising taxes. Give me a break. This has been the least productive congress in our nation’s history.
Tax the rich and feed the poor. Of course this bill will help millions who need it. And tax the rich. This bill has 0% it will pass.
Senior citizens need relief from this high inflation now. It is long past time to stop taxing seniors on their Social Security. The threshold of 25k of total income has not been increased since 1993 and no senior could possibly survive in 2024 on 25k. This unfair tX particularly burdens senior women, who are statistically more likely to be single as they age. Stop taxing seniors on their Social Security now.
Mary:
We are in complete agreement with your concern. In fact, our advocacy subsidiary (AMAC Action) most recently joined in support of Senior Citizens Tax Elimination Act, H.R. 3206, an Act that seeks to help millions of seniors nationwide by excluding tier I railroad retirement benefits and Social Security benefits when calculating annual gross income. Further, in our Social Security Guarantee legislative proposal, which you can view on the AMAC.us website (https://amac.us/social-security-guarantee-2/), we also include a proposal to either eliminate the taxation completely or adjust the thresholds to account for inflation realized since they were put into place decades ago.
Thank you for contacting us and for sharing your concerns.
Gerry Hafer
AMAC Foundation
CONFIDENTIALITY NOTICE: The contents of this message, including any attachments, are confidential and are intended solely for the use of the person or entity to whom the message was addressed. If you are not the intended recipient of this message, please be advised that any dissemination, distribution, forwarding, printing, copying, or use of the contents of this message, and any attached documentation, is strictly prohibited. If you received this message in error, please notify the sender. Please also permanently delete all copies of the original message and any attached documentation. The opinions and interpretations expressed in this message are the viewpoints of the message’s author, a trained advisor accredited under the National Social Security Advisors program of the National Social Security Association, LLC (NSSA). The author, the NSSA, and the AMAC Foundation are not affiliated with or endorsed by the United States Government, the Social Security Administration, or any other state agency.