(The Center Square)–One of President Donald Trump’s tax policy wishlist items is receiving support from some Democratic lawmakers – but with a caveat.
Trump has put pressure on Congress to include ending Social Security taxes in the upcoming budget bill. A recent budget analysis projects that move would reduce revenues by $1.5 trillion over 10 years and speed up Social Security’s insolvency by two years, as The Center Square reported.
But the newly-introduced You Earned It, You Keep It Act by Rep. Angie Craig, D-Minn., would, theoretically, fully finance eliminating all federal taxes on Social Security benefits and even extend the program’s insolvency deadline.
The bill would pay for the lost federal revenue by raising the cap on the Social Security payroll tax, making those who annually earn $250,000 or more continue paying into the program.
According to an analysis by the Social Security Administration, this requirement could extend Social Security’s insolvency to 2058, up from the existing projection of 2023.
Reps. Ro Khanna, D-Calif., Brittany Pettersen, D-Colo., Sean Casten, D-Illinois, and Josh Riley, D-N.Y. cosponsored the bill.
“Our seniors spend their whole lives working hard and paying into Social Security – they shouldn’t pay needless taxes when it’s finally time to collect the benefits they’ve earned,” Pettersen said. “This bill also strengthens Social Security for the long-term, so hardworking people now – and generations down the line – can keep more of what they’ve earned and retire with dignity.”
Currently, Social Security beneficiaries with combined income under $25,000 ($32,000 for joint filers) pay no taxes on benefits, while higher income retirees can be taxed on up to 85% of their benefits.
The bill, introduced Tuesday, has already received endorsements from The Senior Citizens League and from Social Security Works.
“Social Security Works is delighted to endorse the You Earned It, You Keep It Act,” the organization’s President Nancy Altman said in a statement. “The bill strengthens Social Security by requiring the wealthiest to contribute to Social Security at the same rate as the rest of us, while also providing a tax break to millions of seniors.”
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