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Why Are Social Security Benefits Taxable?
According to Sean Williams of The Motley Fool, about 50 percent of all seniors receiving Social Security will owe some amount of income tax on their benefits this year. Williams provides a brief history of how and why benefits became taxable, first in 1983 and then further in 1993. In short, Social Security was facing financial trouble, and taxing benefits helped ease the insolvency situation. But since income tax rates were never indexed for inflation, more seniors bump up against the threshold for taxation ever year. Yet, Social Security is again facing an insolvency issue. Read his full article here.
The Association of Mature American Citizens (AMAC) believes Social Security must be preserved and modernized. This can be achieved by making modest changes in cost of living adjustments and the retirement age, with no additional taxes on workers. AMAC advocates for a bipartisan compromise, “The Social Security Guarantee Act,” taking selected portions of bills introduced by former Rep. Johnson (R-TX) and current Rep. Larson (D-CT) and merging them with the Association’s own well researched ideas. One component is Social Security PLUS, a new, voluntary plan that would allow all earners to have more income available at retirement. This component is intended to appeal especially to younger workers. AMAC is resolute in its mission that Social Security be preserved and modernized and has gotten the attention of lawmakers in DC, meeting with a great many congressional offices and their staffs over the past several years. Read AMAC’s plan here.
Eliminate Social Security. Take the money that would normally be taken to pay current SSI recipients and invest it in the stock market. Invest both halves of Social Security; the employee and the employer’s halves. The money cannot be used by the government. It cannot be used as collateral by the government and each individual has his own account based on his own contributions to the account. At retirement, each person receives whatever amount is determined based on life expectancy. Withdrawals are not taxable. When the money runs put (assuming the person lived long enough) he/she is on their own. Each individual is allowed to assign an heir to whom any remaining balance would go after the person’s death. To account for the current folks that would no longer receive benefits from current workers, reduce the government budget by an equivalent amount. Start by eliminating the department of Energy, the Department of Education, Department of HUD, and reduce the Department of Homeland Security.
Joaquin:
Thank you for your comments. Our mission here at the AMAC Foundation is to serve the public by responding to questions and calls for assistance in navigating the complexities of Social Security. We will pass your thoughts and observations on to our advocacy affiliate, AMAC Action, for inclusion in their work on promoting resolution of the Social Security solvency dilemma and for their consideration as they evaluate legislative initiatives concerning Social Security.
Gerry Hafer, National Social Security Advisor
AMAC Foundation, Inc.
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 government.