Social Security Taxable Base

[dm21202969]

6-30-23

Dear AARP:

I would like to know why you are not working on having the Social Security Taxable Base indexed to inflation? The excludable limits of $32,000-$44,000 for Married and $25,000-$34,000 for Single have not been increased since they were instituted in 1984. If these were increased by 3% annually they would be greater than $101,000 and $79,000 now.

These amounts were set in 1984 so that only the wealthy would pay income tax on SS. Because these have never been increased 56% of taxpayers now pay income taxes on SS. So not just the wealthy are being taxed now!

Please let me know what you are doing about this.

Desmond Mularski

[GailL1]

I can’t answer for AARP but I can answer in logic - the reason is that the whole taxation on benefits has been designed to cover as many beneficiaries as possible who are above the poverty level so that these monies (income to the SS Trust Fund) can help out the SS Trust Fund and keep it going.

Right now, the taxation of benefits is keeping the SS Trust Fund from being declaimed insolvent at an earlier date than has been forecasted.  

SSA.gov - Components Of Trust Fund Income And Cost

Just consider it the tax your employer didn’t pay on matching your contributions to the Trust Funds while you were working.