New bill seeks to permanently end federal taxes on Social Security benefits
A new bill aims to permanently eliminate federal taxes on Social Security benefits while raising payroll taxes for high earners to help preserve the program's future.
The You Earn It, You Keep It Act, introduced by Sen. Ruben Gallego, D-Ariz., would end federal taxation on Social Security benefits and lift the payroll tax cap for workers earning more than $250,000 annually. Currently, only the first $176,100 of wages are subject to Social Security taxes.
A companion bill was introduced in the House earlier this year by Rep. Angie Craig, D-Minn. The legislation stands in contrast to former President Donald Trump’s One Big, Beautiful Bill Act, which included a temporary deduction for seniors but did not eliminate Social Security taxes outright.
While the proposal has support from advocacy groups like The Senior Citizens League, critics said that eliminating benefit taxation could worsen Social Security’s long-term funding challenges. Sen. Gallego argued that his plan, by increasing contributions from the wealthiest Americans, would extend the program’s solvency through 2058.
Read more: Money.com
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