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.