New legislation would increase the exclusion from gross income of Social Security benefits by doubling the current exempt income from $25,000 to $50,000 for single filers and from $32,000 to $64,000 for married couples age 65 and older.
"The income thresholds for taxation of benefits have remained unchanged since first established by Congress in 1984," Malliotakis said in a statement. "At the time, less than 10% of beneficiaries paid federal income tax on their benefits, but because wages have increased, the proportion of beneficiaries who must pay federal income tax on benefits has risen over time."
The bill "does not pay for the reduction in tax revenue going into Social Security," said Maria Freese, senior legislative representative for the National Committee to Preserve Social Security and Medicare.
"Passage of this bill would accelerate the projected depletion date of the Social Security trust fund, at which time, if Congress takes no pre-emptive action, beneficiaries will see a 17% automatic benefit cut. It does not make sense to us to expedite that across-the-board benefit cut," Freese said. "We prefer the proposed reduction of taxes on Social Security benefits in Rep. John Larson's Social Security 2100 Act, which — along with other improvements — is paid for by increasing the contributions of the wealthy to the Social Security system."
Malliotakis has also introduced H.R. 1130, the Bonus Tax Relief for America's Seniors Act, which would amend the Internal Revenue Code to increase the additional bonus deduction for seniors age 65 and older from $1,950 to $5,000 for single filers, and from $3,100 to $10,000 for married couples.
"On average, this bipartisan legislation would reduce federal taxes by $2,100 for married couples filing jointly earning $85,000 per year," Malliotakis said.
"Our seniors have worked hard and paid taxes their whole lives and they should be able to keep more of their Social Security and retirement income without Uncle Sam trying to reach into their pockets again," Malliotakis said. "Many of our seniors have been crushed by inflation, and are being forced to stretch their retirement savings further than ever before. The bills I'm introducing today would reduce the tax burden on our seniors, keep more money in their pockets and allow them to retire with greater financial security."
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