Lawmakers Move to Eliminate Federal Tax on Social Security Benefits

It’s no secret that seniors living on fixed incomes are struggling. One Minnesota lawmaker — U.S. Representative Angie Craig — has introduced a bill to help them out. According to Fox 9 KMSP, the so-called “You Earned It, You Keep It Act” would eliminate the federal tax on Social Security benefits, putting more money in seniors’ wallets each month. Rep. Craig says the bill would pay for itself by raising the cap on Social Security payroll benefits. Right now, workers stop paying into Social Security at $168,000 of their earnings. Under Rep. Craig’s bill, workers would resume paying the payroll tax at $250,000 and up. She says this would also shore up Social Security until 2054.

The Seniors Trust believes the Social Security Expansion Act is a better solution. Similar to the “You Earned It, You Keep It Act,” the Social Security Expansion Act would lift the income tax cap and subject all income above $250,000 to additional Social Security payroll tax. A big difference is that the Social Security Expansion Act would immediately expand Social Security benefits, giving retirees an additional $200 per month, and it would establish a fairer cost-of-living adjustment (COLA). The Social Security Expansion Act also protects Social Security for the long term, ensuring its solvency through 2096.