Democratic lawmakers in the House are backing a bill that would eliminate federal taxation on Social Security benefits, while also extending the program's solvency by 20 years.
Rep. Angie Craig, D-Minn., reintroduced the You Earned It, You Keep It Act with support from six co-sponsors: Reps. Yadira Caraveo, D-Colo.; Ro Khanna, D-Calif.; Don Davis, D-N.C.; Mary Peltola, D-Alaska; Andrea Salinas, D-Ore.; and Hillary Scholten, D-Mich.
Originally introduced in August 2022, the bill would repeal the taxation of Social Security benefits starting in 2025, while also raising Social Security's income tax cap. Currently, individuals making more than $168,600 in income do not get taxed for Social Security on their earnings above that amount, according to the Social Security Administration. The bill would change that, applying Social Security taxes on all earnings above $250,000.
If the bill were enacted, the combined trust funds making up Social Security would not face depletion until 2054, extending the system's solvency by 20 years, according to a report from the Social Security Administration's chief actuary. Under current law, the trust funds face depletion in 2034, after which benefits are expected to be reduced by 20%.
"This bill is a win-win — it's a tax cut for seniors and a way to ensure more Americans can depend on the Social Security benefits they've earned," Craig said in a Jan. 25 news release.
"Historic inflation is eroding seniors' budgets, jeopardizing the financial security they've worked their whole lives to achieve," Caraveo said in her own Jan. 29 news release. "The last thing they need is for the government to double tax their hard-earned Social Security benefits."
The bill is also endorsed by Social Security Works, an organization advocating to protect and expand Social Security, according to the news releases.