Bill to Eliminate Federal Taxes on Social Security Reintroduced

Minnesota Democratic Representative Angie Craig has reintroduced legislation that would eliminate federal taxes on Social Security benefits for seniors. The bill would extend full benefits for two decades and reduce the federal debt by a substantial amount, according to the analysis it cited.

Craig had initially introduced the You Earned it, You Keep it Act in August 2022, which she said would be paid for by raising the Social Security payroll tax cap so higher-earning workers would continue paying into Social Security.

The Social Security’s Office of the Chief Actuary found that two provisions within the bill would extend the ability of the Old Age, Survivors, and Disability Insurance (OASDI) program to pay scheduled benefits for an additional 20 years.

“That is, the date of projected depletion of the combined OASI and DI Trust Fund reserves would be moved from 2034 under current law to 2054 assuming enactment of the proposal, under the intermediate assumptions of the 2023 Trustees Report,” the analysis claimed.

It further claimed the Act would reduce the federal debt by $8.9 trillion over 75 years.

“The effect of implementing the proposal would be a reduction of the federal debt held by the public (under the budget scoring convention), reaching about $8.9 trillion in present value at the end of the 75-year projection period,” the analysis read.

“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. And on top of that, it’s fiscally responsible,” Craig said in a statement. “I’m leading the charge on this issue in Congress because we need to get money back in the pockets of middle-class Americans. The You Earned It, You Keep It Act will help us get it done.”

Reps. Ro Khanna (CA-17), Yadira Caraveo (CO-08), Don Davis (NC-01), Mary Peltola (AK-AL), Andrea Salinas (OR-06), and Hillary Scholten (MI-03) were original co-sponsors of the bill. Social Security Works, “an organization dedicated to protecting and improving Social Security,” endorsed Rep. Craig’s bill.

Click HERE for the full text of the bill.