Social Security You earned it you keep it

[MaryRose416568]

We need to get our Congress Representatives to support the 'You earned it you keep it' bill. This allows for raising the cap on the taxable earnings and stopping the federal taxes on SSN.  This would keep the trust fund solvent until 2054 and decrease the long range deficit.  This is a win for all retirees..  We need AARP support.

[ScottA835236]

I’d like more information. Says it will lower or even get rid of SS benefits for “high earners” but it’s a little vague in what a high earner is.  

[STEVE1217531]

FYI, This bill has been now supported by the chief actuary of the Social Security Administration.

This is an excerpt from January 29th, 2024 in the Investment News written by Greg Greenberg.

"The Social Security Administration found last week that Minnesota Rep. Angie Craig’s proposed tax legislation may indeed extend the lifespan of the retirement program."

I have sent an email to my House Rep Bill Pascrell via his website to please cosponsor this bill.

This seems to be reintroduced as H.R. 7084.

[Tonster521]

@STEVE1217531 I do not know why Congress would support tax free SS Benefits especially for the higher incomes. I think you need to review why Congress started taxing SS benefits at the 50% threshold in 1984 and 85% in 1993. I have provided a link to an article that provides the history as well as the rationale. https://www.concordcoalition.org/issue-brief/taxing-social-security-benefits/ Hopefully, I copied and pasted it correctly. 

As you know, it does not take much income in today's dollars to exceed the thresholds which are causing approximately 50% of SS Beneficiaries to report their SS Benefits as taxable income. I believe increasing the income thresholds to realistic amounts in today's dollars is doable and may achieve Congress support. To carte blanche eliminate SS Benefits taxation is a windfall for the higher income folks. 

With regard to the phrase, "You earned it", the Supreme Court has already ruled that workers have no legally binding contractual rights to their SS Benefits. The case that established that ruling is Flemming vs Nestor (1960). There are other cases as well.  Moreover, the Supreme Court ruled that SS Benefits can be cut or even eliminated at any time. Of course, Congress has to initiate such action and the President has to sign that legislation. It would be political suicide for those who implement such legislation as well as an economic disaster for our economy. The good news, if any, is that Congress can increase SS Benefits for the greater good of all. However, as Gail pointed out, there needs to be a reconciliations of the debits and credits (i.e., revenue and expenditures). Otherwise, the SS Program is forecast to reduce SS Benefits at some point in the future.

Remember, the SS Program was created to be a form of Long Term Social Insurance that can be changed from time to time based on a changing workforce. It is not a retirement account like a 401 K, IRA, etc. wherein contributions plus interest/dividends are accumulated for a participant's benefit. The "contributions" that are made based on one's earnings are taxes just like federal income taxes. Your "contributions/taxes" have no correlation to how your SS Benefits are developed. Hope this helps.

[GailL1]

@STEVE1217531 

The SS Actuary doesn’t support or not support - the Actuary does the analysis of the effects.  

I certainly don’t see any extension of the financial aspects of the program in the analysis - they are taking money from the GENERAL Fund to make up for stopping the tax on benefits; the fund is extended 20 years by the 2nd provision (but we’re shooting for 75 years].

AND you do realize that the money that is collected from these taxes on benefits goes back into the SS Trust Fund to help with its financial condition.  

SSA.gov SOCIAL SECURITY Office of the Chief Actuary January 25, 2024 - Analysis of You Earned it , Y...

from the link ~

. . . . . We estimate that enactment of these provisions would extend the ability of the OASDI program to pay scheduled benefits in full and on time for an additional 20 years. That is, the date of projected depletion of the combined OASI and DI Trust Fund reserves would be moved from
2034 under current law to 2054 assuming enactment of the proposal, under the intermediate assumptions of the 2023 Trustees Report.

The proposal includes two provisions with direct effects on the OASDI program. The following list briefly describes these provisions:

Section 2. Repeal taxation of Social Security benefits effective in 2025, but hold the OASDI and Medicare Hospital Insurance (HI) Trust Funds harmless. Under current law, Social Security beneficiaries are taxed on their personal income tax returns on up to 85 percent of their Social Security benefits, based on total income measures. This provision would repeal taxation of Social Security benefits, but would provide for transfers from the General Fund .. . . . . 

MORE. AT. THE. LINK  -

[DavidT155196]

Yes, it will also turn the national debt around from continuously increasing, to starting to shrink according to the projections.  We are currently adding 1 Trillion dollars to the national debt each 100 days, and this bill is projected to decrease the national debt by 9 Trillion dollars over 75 years.  We need to stop it from increasing while it is still possible and before USA is completely owned by  foreign interests.  Please tell your legislator to support the "You earned it, You Keep it" Social security bill!!!!

[jr3020338]

You are absolutely right!  I just did my taxes and I have to pay over $1,000 to the Federal Government!

This is outrageous!  I collect a small amount of Social Security every month and it is imperative I continue to work at 67 years of age.  I worked as much overtime as I could over the holidays to make ends meet and now I find that due to Federal Taxes I need to pay over $1,000 - basically what I worked so hard for over the holidays!  I am shocked by this!  And on the news tonight we hear how President Biden is forgiving student loans to the tune of over 1 billion dollars!  How about some relief for the elderly that need to continue to work to make ends meet in this economy???

This subject really needs to be addressed soon - more elderly are having to work now due to inflation and we should not have to continue to pay outrageous taxes on our Social Security, especially those of us who do not get substantial checks.

[SpringIsHereSoHappy]

(2/21/24) @jr3020338 , we oldies DO NOT count. The US is too "busy" taking care of the illegals, immigrants and refugees. So MANY of us are ending up "homeless" and NOT everyone has a place to go (NO kids or folks who care).

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[*** @jr3020338 wrote:

You are absolutely right!  I just did my taxes and I have to pay over $1,000 to the Federal Government!

This is outrageous!  I collect a small amount of Social Security every month and it is imperative I continue to work at 67 years of age.  I worked as much overtime as I could over the holidays to make ends meet and now I find that due to Federal Taxes I need to pay over $1,000 - basically what I worked so hard for over the holidays!  I am shocked by this!  And on the news tonight we hear how President Biden is forgiving student loans to the tune of over 1 billion dollars!  How about some relief for the elderly that need to continue to work to make ends meet in this economy???

This subject really needs to be addressed soon - more elderly are having to work now due to inflation and we should not have to continue to pay outrageous taxes on our Social Security, especially those of us who do not get substantial checks. ***]

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[GailL1]

@MaryRose416568 

It appears that within this proposed legislation the amount that would make up the loss of these tax collections on SS benefits would be made up by a transfer of these funds from the General Fund thus increasing our national debt.

The increase in the collection of payroll taxes on raising the cap on taxable earnings would create a new benefit calculation for those who would be effected by this increase and together THIS IS THE ONLY PART OF THE LEGISLATION THAT HELPS WITH FIXING THE TRUST FUND FOR THE LONG TERM.

Why shouldn’t one of these provisions offset the other ?

We are just playing games with this proposed legislation - so instead of benefits being cut by 20% in 2034 when the fund is forecast to be depleted - it just changes it to 2054 with them being cut by about 10% at that time.

By taking money from the General Fund for the removal of these taxes we are losing valuable income to the Trust Fund and the program then will not be self-sufficient as it was originally designed to be.

I don’t think our legislators understand basics of add and subtract.  If we increase benefits there has to be an equal offset of increasing income.  And if we remove income (like the tax on SS benefits) then there has to be some way to make that income up rather than taking it from the General Fund.  

The proposal should be written where there is NO offset from the General Fund - the income to offset the removal of tax on benefits should be from the raising of the cap on the taxable earnings or some other [inside the program] increase in revenues.

The way this proposed legislation raises the cap on the taxable earning is (1) tax those earning ABOVE $ 250,000 and then when the current cap catches up to $250,000, all earnings would be taxed.

SSA.gov. - SS Actuary Report on the proposed You Earned It, You Keep It Act 01/24/2024 (pdf)

I just don’t want the Trust Fund to start relying on General Funds - doing it once makes it easier to do it again and again.  

I think I will wait to see what the new Committee comes up with in their suggestion for a broader fix rather than just piece mill action.  And I am speaking as one that does pay taxes on my benefits.

The NUMBERS:   SSA.gov - Trust Fund Financial Data by year (1957 - 2023)

[DrJohnQ]

Amazing AARP can openly support and get our membership involved on much less important issues than this Bill that would add money back to many of us in making our payments tax free, YET, they do nothing too little on openly supporting this Bill.  SOMETHING IS WRONG WITH THIS PICTURE!!!