By Daisy Brown, Legislative Liaison, TSCL
So far this year, Congress has been busy introducing new legislation to improve Americans’ Social Security benefits. Two bills, the Social Security Expansion Act and the Senior Citizens Tax Elimination Act, are particularly noteworthy.
In this article, we’ll examine both bills, looking at what major changes they would enact and providing TSCL’s recommendations for moving them forward.
The Social Security Expansion Act Would Increase Benefits by $2,400
Introduced in the Senate by Senators Bernie Sanders and Elizabeth Warren, the Social Security Expansion Act strives to increase benefits for today’s seniors while extending Social Security’s long-term financial solvency. Representatives Jan Schakowsky and Van Hoyle introduced a corresponding bill in the House of Representatives.
One of the bill’s most important features would increase Social Security payments by an estimated average of $200 a month, or $2,400 per year, for the average beneficiary by changing the way benefits are calculated so that more income is counted in the formula. The new calculation would favor lower-income seniors, but virtually all beneficiaries would benefit.
Another important feature of the bill would be applying the 12.4 percent Social Security payroll tax, which is split between employees and employers on all incomes above $250,000. In 2025, Americans only pay Social Security taxes on the first $176,100 they make yearly.
According to an analysis from the Social Security Administration’s (SSA’s) chief actuary, the new revenue provided by this change would extend Social Security’s solvency for at least 75 more years. The program is currently projected to be unable to pay full benefits starting in 2035 because its expenditures outpace its revenues.
TSCL strongly endorses this legislation. We have long argued that Social Security benefits have fallen behind the pace of inflation and need a boost. To improve the program's finances, we have frequently called for Congress to raise or eliminate the income thresholds on Social Security payroll taxes.
The Senior Citizen’s Tax Elimination Act Would Make Good on an Administration Promise
According to the SSA, approximately one in four beneficiaries pay income taxes on at least some portion of their Social Security benefits. You might already know this if you’re a regular Advisor reader because we’ve covered it before, but on the campaign trail, President Trump proposed eliminating these taxes.
Introduced by Rep. Thomas Massie, the Senior Citizens Tax Elimination Act would make good on that promise by removing income taxes on all benefits if passed. “Although seniors have already paid tax on their Social Security contributions via the payroll tax, they are still required to list these benefits as taxable income on their tax returns,” said Massie in a statement. “My bill would exempt Social Security retirement benefits from taxation and boost the retirement income of millions of older Americans.”
This isn’t the first time the bill has been introduced—it was first proposed by Rep. Ron Paul in 2003, and Rep. Massie has re-introduced it each Congress since taking office in 2012—but it does seem like the first time it has a prospect of passing. Here, at The Senior Citizens League (TSCL), we will fight to see that it does. We have long called to eliminate taxes on Social Security benefits, seeing them as unfair double taxation.
