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Damn, I (Conditionally) Agree With Trump! [1]
['This Content Is Not Subject To Review Daily Kos Staff Prior To Publication.']
Date: 2025-01-19
The Social Security Act of 1983 authorized taxation of beneficiaries who exceeded certain income thresholds. The idea was that retired people with incomes that high were living pretty comfortably and could afford to kick a little back into the SS system, helping to keep it funded.
So starting in 1984, this is what the tax looked like:
Individuals with a combined income between $25,000 and $34,000 are taxed on 50% of their Social Security benefits.
If your combined income as an individual is greater than $34,000, 85% of your Social Security benefits are taxable.
Married couples with a combined income between $32,000 and $44,000 are taxed on 50% of their Social Security benefits.
Married couples with a combined income above $44,000 are taxed on 85% of their Social Security benefits.
“Income” here is defined as adding your adjusted gross income plus any nontaxable interest and half of your Social Security benefit. Any IRA/401k distributions or pension payments also count as income.
In a 1984 timeframe, these income thresholds are reasonable. $32,000 to $44,000 for a married couple then equates to $99,000 to $136,000 today, so a couple living on that amount would have been doing all right in their retirement. The problem is, the bastards didn’t index the thresholds for inflation. They’re still exactly what they were 40 years ago. That means the tax captures more and more lower income beneficiaries every year as the thresholds effectively creep down.
Trump has proposed eliminating this tax, or at least adjusting the income thresholds significantly upward. I actually enthusiastically support this, with a caveat: I’ve seen nothing about how he proposes to replace the lost revenue.
That’s a problem, because eliminating this odious tax without replacing the revenue it generates would advance the date when there won’t be enough coming into the SS system to pay everyone full benefits by a couple of years, to something like 2032.
An easy solution would be to simply eliminate the income cap ($176,100 for 2025) subject to payroll tax withholding. I don’t see that happening.
So yeah, I agree with Trump on this one in principle, as long as there’s a way to pay for it that doesn’t stick it to the working class.
Take care,
ER
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