A bill in Congress, titled the Senior Citizens Tax Elimination Act, would eliminate federal taxation of Social Security benefits.
Specifically, the bill would change IRS code to no longer allow Social Security income to be taxed under the umbrella of “gross income”.
The bill has four sponsors – Rep. Thomas Massie [R-Kentucky], Rep. Rod Blum [R-Iowa], Rep. Jim Bridenstine [R-Oklahoma] and Rep. Ron DeSantis [R-FL].
A summary of the bill from GovTrack:
Amends the Internal Revenue Code to repeal the inclusion of any social security or tier I railroad retirement benefits in gross income.
Appropriates funds to cover reductions in transfers to the Social Security and Railroad Retirement Trust Funds resulting from the enactment of this Act. Expresses the sense of Congress against using tax increases to provide revenue necessary to carry out this Act.
The bill may not go far because of that last provision – the language that prevents Congress from levying another tax to make up for the revenue lost from no longer taxing Social Security.
The cost of eliminating the Social Security tax may be too much to bear for most lawmakers.
But one co-sponsor, Rep. Rod Blum, offered his reasoning for signing onto the Act. From the Sioux City Journal:
Blum’s thinking is that workers’ contributions to Social Security are a tax on earnings, and they shouldn’t be taxed again when they begin receiving their retirement benefits.
“It’s taken out of their earnings when they make it, and then they’re taxed on it when they receive Social Security,” he said. It’s not like a 401k contribution that is a pre-tax deduction.
The language of the bill can be read here.
Photo by Teresa Boardman via Flickr License
