Taxes in the United States are a very important issue because many aspects of society depend on them. Social Security, among many other benefits, depends on taxes directly. However, many Americans have to pay part of their retirement benefit in taxes, something that has made the program seem a bit shaky.
In this regard, a group of lawmakers aims to eliminate these Social Security taxes. The idea is to eliminate all taxes that retired United States citizens pay on their retirement benefit. The ultimate goal of all this is to help greatly fund the retirement program, which seems to be in a slump in recent years.
The name of this bill is none other than “You Earned It, You Keep It”. And it not only directly affects Social Security beneficiaries, but also the rest of American society, since it would directly increase the taxes currently paid by workers. Through these changes, the bill aims to completely change the situation.
Who would be affected by this new law on Social Security taxes?
For one thing, it would affect Social Security beneficiaries themselves. These Americans would have to pay absolutely nothing in federal taxes. Undoubtedly, a big advantage over today, since thousands of retired Americans do pay taxes.
On the other hand, American workers would have to pay more taxes. This would balance the scales a bit, so that the retirees themselves would not pay taxes, but there would be a budget to be able to continue sending these monthly checks.
Undoubtedly, this bill will change the lives of many Americans. It should be kept in mind that about 40% of Social Security beneficiaries pay some taxes. And that is that those retirees with an annual benefit of $25,000 or more are required to pay the IRS annual taxes.
Angie Craig, the Democratic representative who introduced this bill, stated that this is “a tax break for seniors and a way to ensure that more Americans can depend on the Social Security benefits they have earned”.
Who currently pays taxes on their SSA retirement?
As a general rule, those Americans who only collect Social Security do not have to pay taxes. This is having the retirement benefit as their sole source of income. However, a lone taxpayer with income between $25,000 and $34,000 per year has to pay federal income taxes on 50% of their Social Security checks.
On the other hand, if the benefits are $34,000 it is necessary to pay taxes on 85% of all of that income. Both of the latter two examples are subject to combined income, i.e., for retirees who have extra income other than their retirement check.
With this bill, none of these citizens would have to pay absolutely nothing. And the idea behind it all is that citizens who have worked so many years to get their Social Security check should be able to keep all of their benefit dollars.