A proposed bill introduced by U.S. Reps. Angie Craig and Yadira Caraveo aims to alleviate the tax burden on Social Security beneficiaries and extend the solvency of the program’s Old Age and Survivors Insurance (OASI) Trust Fund. The bill, known as the “You Earned, You Keep It Act,” seeks to eliminate federal taxes on Social Security benefits and delay the exhaustion of the OASI Trust Fund until 2054.
Under the proposed legislation, Social Security payroll taxes would be expanded to cover wages above $250,000, as opposed to the current cap of $168,600. The bill also seeks to end federal income taxes on Social Security benefits, a move that could benefit many retirees who currently face taxes on their benefits.
According to the Social Security’s Office of the Chief Actuary, the bill’s provisions could extend the solvency of the OASI Trust Fund and reduce the federal debt by $8.9 trillion over 75 years. This has led to positive feedback from Social Security advocates, although the bill’s chances of passing through Congress remain uncertain.
Despite the potential benefits of the bill, its path to becoming law is filled with challenges. The legislation originally stalled in 2022 due to lack of support, and the current political climate in Congress may pose obstacles to its approval. However, the bill has gained support from organizations like Social Security Works, which advocates for the protection and expansion of Social Security and similar programs.
While the bill faces an uncertain future, its introduction reflects growing concerns about the long-term financial stability of the Social Security program. The implications of this proposed legislation could have far-reaching effects on retirees and the broader economy, making it a topic of significant interest and debate among lawmakers and social security advocates.