Representative Angie Craig (D-MN) introduced last month legislation that would repeal federal taxes on Social Security benefits for retirees.
If passed, the You Earned It, You Keep It Act (HR 8717) would repeal all of the federal taxation on Social Security retirement benefits beginning in 2023.
Craig claims the tax repeal would be fully paid by implementing an extension of the payroll tax wage cap to over $250,000 a year. Under current law, wages over $147,000 are exempt from the Social Security payroll tax.
“Social Security is a promise we have made to the American people – if you work hard and play by the rules, the dignity of a secure retirement will be within your reach,” said Craig.
“But taxing the very benefits American workers have earned after decades on the job diminishes our promise and threatens to undermine the financial security of retirees already struggling with rising prices, “Craig said. “Eliminating this tax will help Social Security benefits go further and ensure that American retirees have all the resources they need after a lifetime of hard work.”
Craig said that according to non-partisan analysis the proposed legislation would also improve the long-term solvency of Social Security compared to current law.
To read the full text of the bill, go here.