eliminate Social Security taxes
Although President Donald Trump claims that his mega-tax reform bill will end taxes on Social Security benefits, the text approved by the Senate does not. Instead of abolishing the levy, it introduces a temporary deduction for taxpayers age 65 and older: $6,000 in the Senate version (versus the $4,000 approved by the House) applicable to all income - not just Social Security - effective from 2025 to 2029 and phasing out above adjusted gross incomes of $75,000 individual or $150,000 joint.
The available deduction will be available, but it is partial and not all retirees will be eligible. Excluded are, for example, seniors who are already exempt from Social Security taxation because of low earnings, those who claim benefits before age 65, and taxpayers who exceed income thresholds.
However, the White House, backed by an analysis by the Council of Economic Advisors, claims that 88% of Social Security beneficiaries will no longer pay taxes on their benefits because of the deduction. According to that study, 33.9 million seniors (including those who do not receive Social Security) will get an average increase in their after-tax income of $670 each.
In this regard Garrett Watson, director of policy analysis at the Tax Foundation, warns that presenting the deduction as “eliminating Social Security taxes” may disappoint many seniors who expected not to be taxed on their pensions. “While the deduction provides some relief to seniors, it falls far short of repealing the tax on their benefits altogether”, according to information from the Associated Press.
Now, actually abolishing Social Security taxes would cost $1.5 trillion over 10 years and accelerate the depletion of the Social Security Trust Fund from 2034 to 2032, according to the Penn Wharton budget model at the University of Pennsylvania.
BBB will benefit 33.9 million seniors; but does not
版主： 牛河梁
