Does AARP support the idea of no taxes on Social Security benefits?

[RichardV792104]

I'm interested in the idea of no taxes on Social Security benefits.  I understand that this is a campaign promise by a presidential candidate but feel it is something that AARP should support.

[RichardV792104]

My point is living on a fixed income is difficult.  Both political parties have indicated that they support this and not having to pay income tax on my SS would go a long way to paying groceries, gas and Morgage.

[BalbonisMoleskine]

You don't live on a fixed income if you have SS, which has a COLA nearly every year. You might not say the COLA is large enough, but the fact remains that your SS income is not fixed.

[CaptainObvious60]

Richard can you point me to a link that shows the Democrats want to end taxing social security? I’m not saying that you are wrong I just want to see it.

[DirkB349973]

This is one source that supports my comment.

https://www.cbsnews.com/news/trump-social-security-income-tax-cut-here-is-the-impact-on-benefits/

[Excerpts from the article...]

"Payroll taxes, the FICA taxes taken out of workers' paychecks, fund the bulk of Social Security. But about 4% of its financing stems from the income taxes that recipients pay on their benefits, providing about $50 billion in annual revenue to the program, according to the latest annual report from Social Security's board of trustees."

"It really is, in some ways, Trump advocating defunding Social Security," Nancy Altman, president of Social Security Works, an advocacy group for the program, told CBS MoneyWatch. "It's a sleight of hand — it's giving with one hand and taking with another."

[RichardV792104]

I live on a fixed income and reducing taxes I pay would go a long way to help pay for gas, groceries, and my morgage.

[CaptainObvious60]

I live on a fixed income too and would save about $3000 if my SS wasn’t taxed! Let’s hope whoever is elected ends taxing our entitlement!

[GailL1]

@DirkB349973 

And now that BOTH Presidential candidates are advocating for the removal of taxes on benefits - they are both taking that proposed action to defund Social Security”.  

I have no idea what is in their heads when thinking along this line except maybe vote buying.  GOOD GRIEF!

Sometimes people want something changed when they don’t really even understand the concept of the matter or how it works to begin with.  

Maybe if we worded it in a different way like - OK, we are going to do away with taxes on your Social Security benefits and to pay for this, your benefits will be reduced by X%.  I bet we would hear a completely different reasoning.

[CaptainObvious60]

What does it matter? We are more than 36 trillion dollars in debt and it’s costing more than a trillion dollars a year to service this burden.

I really don’t think not taxing social security is going to break the system. ITS ALREADY BROKEN!

[GailL1]

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@DanL873126 wrote:

Thanks, but that is not factually correct. Income taxes do not fund the Social Security Trust Fund.  Social Security is funded by FICA taxes, not income tax, and Social Security benefits are already exempt from FICA taxes.  So freeing Social Security benefits from income taxes will have no effect on funding Social Security.

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Just a correction for clarity - 

We aren’t talking about “Income Taxes” - we are talking about taxes on BENEFIT.

SSA.gov - Taxation of Benefits 

The Social Security Trust Funds get their income from (3) sources - 

1.  The FICA or payroll taxes while one is working

2.  Interest from the Special Treasuries where any excess, if any,  (difference between what’s coming in and what’s going out), are parked 

3.  taxation of benefits

Here are (3) historic charts on the Social Security (combined) Trust Funds

- the 1st one is a total one - income and outgo

- the 2nd one - is just income - Notice the column entitled:  INCOME FROM TAXATION OF BENEFITS- which started being collected in tax year 1984 - 

- the 3rd one is expenses or outgo

SSA.gov- TRUST FUND DATA 

Taxes have names which differentiate them - so best to be speaking about the right one and how they work 

Hope this helps your clarity on the subject.