Senior Tax Cut Legislation Introduced by Minnesota Democratic Congresswoman

Minnesota Democratic Congresswoman Angie Craig recently reintroduced legislation to eliminate federal taxes on Social Security benefits for seniors. The bill, called the “You Earned It, You Keep It Act,” aims to extend full benefits for two decades and reduce the federal debt by a substantial amount, according to the analysis it cited.

The Act, brought forth by Craig in August 2022, proposes to be funded by raising the Social Security payroll tax cap so that higher-earning workers would continue to contribute to 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.

The analysis claims that enacting the bill would move the projected depletion of the OASI and DI Trust Fund reserves from 2034 under current law to 2054 under the intermediate assumptions of the 2023 Trustees Report. Furthermore, it suggests that the Act would reduce the federal debt by $8.9 trillion over 75 years.

Congresswoman Craig stated, “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. 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.”

The bill has received support from several other representatives who are original co-sponsors of the bill, and Social Security Works, an organization dedicated to protecting and improving Social Security, has endorsed Rep. Craig’s bill.

The full text of the bill can be accessed through the provided link for those interested in diving deeper into its contents. The reintroduction of this legislation signals a potential shift in how Social Security benefits are taxed, and it will be interesting to see how it progresses through Congress in the coming months.