What You Need to Know
- The You Earned It, You Keep It Act would eliminate federal taxation of Social Security benefits beginning in 2023.
- The cuts would be paid for by extending the payroll tax to earnings above $250,000 a year.
Rep. Angie Craig, D-Minn., has introduced the You Earned It, You Keep It Act, legislation to repeal federal taxes on Social Security benefits.
The tax cut would be paid for by extending the payroll tax to wages over $250,000 a year. Wages over $147,000 are currently exempt from Social Security payroll tax.
“But taxing the very benefits American workers have earned after decades on the job diminishes our promise and threatens to undermine the financial security of retirees already struggling with rising prices,” she wrote. “Eliminating this tax will help Social Security benefits go further and ensure that American retirees have all the resources they need after a lifetime of hard work.”
Craig explained in the statement, released Aug. 16, that her bill “seeks to eliminate the unjust double tax on Social Security benefits that Americans have been forced to pay for nearly 40 years.”
The You Earned It, You Keep It Act would repeal all federal taxes on Social Security benefits beginning in 2023, Craig said.
The tax cuts, Craig said, “would have no effect on the monthly benefits that enrollees receive each month — and would be fully paid for by raising the cap for individuals earning more than $250,000 annually and asking them to continue paying into Social Security each year.”
Social Security 2100 Bill
Dan Adcock, director of government relations and policy at the National Committee to Preserve Social Security and Medicare, told ThinkAdvisor Monday in an email that while the group supports “providing tax relief to Social Security beneficiaries, making the wealthy pay their fair share of Social Security payroll taxes and extending trust fund solvency, our preferred legislative vehicle for accomplishing these goals is H.R. 5723, Social Security 2100: A Sacred Trust.”