Stupid politicians and Social Security

I find this proposal interesting not only for its reflection of the ignorance of the politician, but the lack of factual information upon which it is based.

Take a look at this recent post on Quinnscommentary.

The truth is retires did not earn, in terms of paying for, their benefits

Below is an excerpt from a GoBankingRates article.

A new bill making its way though Congress is pushing for an end to federal taxes being taken out of Social Security benefits, starting in 2023. Proposed by Rep. Angie Craig (D.-Minn.), the You Earned It, You Keep It Act would eliminate federal government taxes on Social Security payments.

“Social Security is a promise we have made to the American people — if you work hard and play by the rules, the dignity of a secure retirement will be within your reach,” Craig shared in an Aug. 16 statement on her website. She added that this move “would allow seniors to keep the benefits they rightfully earned after decades of working and contributing to the American economy.”

Craig also argued that the enactment of this legislation would be a solution to help combat rising inflation for those living on fixed incomes. A recent survey by The Senior Citizens League — conducted from January through February of this year — found that 49% of respondents said they have had to use their savings to adjust for inflation, and that many have no savings at all.

You Earned It, You Keep It Act Could Prolong Social Security Solvency, But Increase Taxes For High Earners

Craig’s proposed act recommends paying for the revenue deficit caused by removing taxation from Social Security benefits by raising the cap on relevant (combined OASDI, or Old Age, Survivors, and Disability Insurance) taxes for anyone earning more than $250,000 annually, per a press release. As SmartAsset notes, however, should this legislation pass, high earners could see an increase in taxes owed as a result.

8 comments

  1. You Earned It, You Keep It Act*

    (* only if you earn less than $250K do you get to keep it.)

    I’ll also bet that most people don’t realize that OASDI is the tax for Social Security making it seem like a new tax for those earning over $250K. And if I am not mistaken, nobody that earns over $147,000 has any additional OASDI taxes taken out now. Is she suggesting to tax people earning up to $250K or only those earning over $250K and everybody between $147K and $250K does not pay additional taxes?

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    1. The press release/article isn’t worded correctly. What the bill actually states is that this proposal would be paid for by raising the payroll cap from 147k to 250k for Social Security. This has been talked about for years but never gains any traction .

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      1. I should add though that any proposals in the past to raise the earnings cap never included eliminating taxation of SS benefits , to the best of my recollection. Maintaining benefit taxation and raising the payroll cap would go a long way to solving the SS deficit but won’t fix it entirely .

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      2. The taxes paid on SS benefits contribute $40.7 billion to the SS trust annually out of a total of of $1.1 trillion

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  2. Don’t tax you, don’t tax me, tax that guy behind the tree. Vote buying … and you are surprised?

    Bush II was the worst at this – to get re-elected in 2004, he added $10+ Trillion in unfunded liability via Medicare Rx Part D with NO specific new revenues.

    But, let’s call his bluff. To “earn” suggests a contract. Let’s see the idiots in Congress commit to a change that forms an actual contract – so people can see how much or how little their taxes “earn”.

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  3. If every scheme proposed in Congress passed, no one earning over 250000 would bother going to work since the tax rate would be 100%.

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