Donald Trump has come up with a common sense — and rather genius — campaign pledge to eliminate taxes on the social security benefits on retirees.
First of all, why the hell are social security benefits taxed in the first place? That makes it double taxed, because social security is a tax in the first damn place. It is an entitlement that claims to be a support for retirement.
And, please, don’t give me that trope that social security is “not an entitlement.” Because it is. It always was. The federal government does not have the money you put into the system in an account waiting for you to draw it in retirement. They spend all your money right away. So, what ever money you get back is the money other tax payers put into the system.
But, if it is supposed to be the money to help you live on in your golden years, why does the federal government take 1/4 of it or more away from you? And, on top of that, the first 50 years this entitlement program was in place, the feds did not tax it.
Anyway, Trump wants to put an end to this nonsensical policy.
Per Breitbart:
Social Security benefits were not taxed for the first fifty years. The idea to tax them came out of one of the most dangerous creatures ever to stalk our Republic—the bipartisan reform commission. Led by Alan Greenspan, the National Commission on Social Security Reform proposed in 1983 taxing around half of the benefits received by high-income retirees.
The amendments to the Social Security Act that were signed into law that year subjected half the benefits to federal income tax if a retirees income exceeded $25,000. For a joint filer, the threshold was set at $32,000.
This was a tax on a relatively small share of people receiving Social Security benefits. Back in 1983, the median household income was $24,550. So, the tax only applied to people earning an above average income. For people eligible to collect Social Security—many of whom would have been retired—the median income was even lower. At the time, the Social Security Administration estimated that the tax would only affect 10 percent of beneficiaries.
This was a tax, however, that was destined to expand without any politician having to support a tax hike on the elderly. That’s because the thresholds for taxing benefits were not indexed to inflation. So, as time went on and inflation worked its way through our economy, more and more seniors were pulled into the taxable bracket.
The median household income in 2022—the latest data available from the Census Bureau—was $74,580. But those tax thresholds have remained unchanged. So, the tax that once applied only to retirees with incomes above the national average now applies to retirees with incomes much lower than average. The Social Security Administration estimates that around 40 percent of beneficiaries are subject to taxes on their benefits.
In other words, a tax that was designed to apply to people earning a relatively high-income at an advanced age now applies to elderly people working part-time to make ends meet. What’s worse, is that this is a form of taxation without representation. No one voted for the tax increases. They just happened because of inflationary bracket creep.
Anyway, it is a good idea.
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