‘You Earned It, You Keep It’: New bill would eliminate federal taxes on Social Security benefits

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STATEN ISLAND, N.Y. — A Minnesota congresswoman is pushing to remove federal taxes on Social Security benefits with the “You Earned It, You Keep It Act.”

U.S. Rep. Angie Craig, (D-Minnesota), who introduced the legislation on Aug. 16, said she wants to eliminate federal taxes on Social Security benefits for retired Americans.

“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 wrote in an Aug. 16 statement on her website.

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“Eliminating this tax will help Social Security benefits go further and ensure that American retirees have all the resources they need after a lifetime of hard work,” she added.

The legislation recommends paying for the revenue deficit caused by removing taxation from Social Security benefits by increasing the cap on relevant (combined OASDI, or Old Age, Survivors, and Disability Insurance) taxes for anyone earning more than $250,000 per year, according to a Yahoo.com report. However, if the bill passes, some high income earners could see an increase in taxes, the report says.

The bill will typically be considered by committee before it’s potentially sent on to the House or Senate.

Craig’s proposed bill comes at a time when there are a lot of fears surrounding the future of Social Security. According to GOBankingRates, the 2021 Social Security board of trustees’ annual report revealed that the program’s reserves will be fully depleted by 2034-2035 if nothing is done to prevent it.

OTHER SOCIAL SECURITY NEWS

Social Security benefits in 2023: Would an increase apply to disability benefits?

All Social Security recipients will be eligible for a monthly increase beginning next year. This includes those who receive Social Security Disability Insurance (SSDI), as well as people who receive standard Social Security benefits.

Currently, Social Security recipients receive an average of $1,542.22 per month, however, next year’s cost-of-living increase could add an average of $175.10 monthly.

The specific amount of the cost-of-living (COLA) increase for 2023 won’t be released until Fall 2022, however, the nonpartisan Senior Citizens League said it could be as much as a 10.5% increase.

There has not been a double-digit COLA increase since 1982 when there was an 11.2% increase.

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