President Donald Trump keeps saying the GOP mega bill will eliminate taxes on Social Security. It does not
It does not.
At best, Trump's 'no tax on Social Security' claim exaggerates the benefits to seniors if either the House or Senate-passed proposals is signed into law.
Here's a look at Trump's recent statements, and what the proposals would — or would not — do.
Trump repeatedly told voters during his 2024 campaign that he would eliminate taxes on Social Security. As his massive legislative package has moved through Congress, the Republican president has claimed that's what the bill would do.
Trump said on a recent appearance on Fox News' 'Sunday Morning Futures' that the bill includes 'no tax on tips, no tax on Social Security, no tax on overtime.'
But instead of eliminating the tax, the Senate and House have each passed their own versions of a temporary tax deduction for seniors aged 65 and over, which applies to all income — not just Social Security.
And it turns out not all Social Security beneficiaries will be able to claim the deduction. Those who won't be able to do so include the lowest-income seniors who already don't pay taxes on Social Security, those who choose to claim their benefits before they reach age 65 and those above a defined income threshold.
The Senate proposal includes a temporary $6,000 deduction for seniors over the age of 65, contrasted with the House proposal, which includes a temporary deduction of $4,000.
The Senate proposal approved Tuesday would eliminate Social Security tax liability for seniors with adjusted gross incomes of $75,000 or less or $150,000 if filing as a married couple.
If passed into law, the tax deduction would last four years, from 2025 to 2029.
The deductions phase out as income increases.
Touting a new Council of Economic Advisers analysis, the White House said Tuesday that '88% of all seniors who receive Social Security — will pay NO TAX on their Social Security benefits,' going on to say that the Senate proposal's $6,000 senior deduction 'is estimated to benefit 33.9 million seniors, including seniors not claiming Social Security. The deduction yields an average increase in after-tax income of $670 per senior who benefits from it.'
Garrett Watson, director of policy analysis at the Tax Foundation think tank, said conflating the tax deduction with a claim that there will be no tax on Social Security could end up confusing and angering a lot of seniors who will expect to not pay taxes on their Social Security benefits.
'While the deduction does provide some relief for seniors, it's far from completely repealing the tax on their benefits,' Watson said.
The cost of actually eliminating the tax on Social Security would have massive impacts on the economy.
University of Pennsylvania's Penn Wharton Budget Model estimates that eliminating income taxes on Social Security benefits 'would reduce revenues by $1.5 trillion over 10 years and increase federal debt by 7 percent by 2054″ and speed up the projected depletion date of the Social Security Trust Fund from 2034 to 2032.
Discussions over taxes on Social Security are just part of the overall bill, which is estimated in its Senate version to increase federal deficits over the next 10 years by nearly $3.3 trillion from 2025 to 2034, according to the Congressional Budget Office.
Administration officials have said the cost of the tax bill would be offset by tariff income.
Recently, the CBO separately estimated that Trump's sweeping tariff plan would cut deficits by $2.8 trillion over a 10-year period while shrinking the economy, raising the inflation rate and reducing the purchasing power of households overall.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CBS News
7 minutes ago
- CBS News
Watch Live: House nearing final vote on Trump's "big, beautiful bill"
Washington — The House is nearing a final vote Thursday on President Trump's "big, beautiful bill" after Republican leaders overcame resistance from GOP holdouts in a dramatic overnight session and advanced the Senate version of the measure early Thursday morning. "We'll have the votes," House Speaker Mike Johnson said Thursday morning. "We'll land this plane before July 4th." Republicans are trying to approve the final version of the legislation ahead of the self-imposed Friday deadline to get the bill to the president's desk. After hours of delay, the House voted 219-213 to advance the bill, scoring a key victory for Johnson. Lawmakers began voting at about 9:30 p.m. EDT Wednesday, but didn't wrap up until about 3:20 a.m. Thursday, as GOP leaders and the White House spoke with holdouts for hours to overcome their objections. "What are the Republicans waiting for??? What are you trying to prove??? MAGA IS NOT HAPPY, AND IT'S COSTING YOU VOTES!!!" Mr. Trump wrote on Truth Social shortly after midnight. Following the procedural vote, the House began debating the bill. Just before 5 a.m., House Minority Leader Hakeem Jeffries began addressing the chamber for a "magic minute," which allows the leader unlimited speaking time. Seven hours later, the New York Democrat is still addressing the chamber, pledging to "take his time" as he highlighted the Americans who he said would suffer because of the bill. "I rise today in strong opposition to Donald Trump's one, big ugly bill," Jeffries said as he began speaking. "This disgusting, abomination, the GOP tax scam, that guts Medicaid, rips food from the mouths of children, seniors and veterans, and rewards billionaires with massive tax breaks. Every single Democrat stands in strong opposition to this bill because we're standing up for the American people." Johnson is expected to speak after Jeffries concludes, followed by the final vote. House hardliners push back against Senate changes After the Senate approved the bill Tuesday, House GOP leaders had aimed to move ahead quickly on the signature legislation of Mr. Trump's second-term agenda, which includes ramped-up spending for border security, defense and energy production and extends trillions of dollars in tax cuts, partially offset by substantial cuts to health care and nutrition programs. But some House Republicans, who voted to pass an earlier version of the bill in May, were unhappy with the Senate's changes. Holdouts, including moderates and members of the conservative House Freedom Caucus, met with Mr. Trump on Wednesday as the White House pressured House Republicans to vote for the bill. While some lawmakers described the meetings as productive, a number of conservatives said ahead of a rule vote Wednesday afternoon that they thought the procedural vote would fail. Johnson spent weeks pleading with his Senate counterparts not to make any major changes to the version of the bill that passed the lower chamber by a single vote in May. He said the Senate bill's changes "went a little further than many of us would've preferred." The Senate-passed bill includes steeper Medicaid cuts, a higher increase in the debt limit and changes to the House bill's green energy policies and the state and local tax deduction. Other controversial provisions that faced pushback in both chambers, including the sale of public lands in nearly a dozen states, a 10-year moratorium on states regulating artificial intelligence and an excise tax on the renewable energy industry, were stripped from the Senate bill before heading back to the House. Before the critical procedural vote ended, Johnson told reporters that Mr. Trump was "directly engaged" in conversations with skeptical members. "Members wanted to hear certain assurances from him about what's ahead, what the future will entail, and what we're going to do next, and all of that," Johnson said. "And he was very, very helpful in that process." In the wee hours on Thursday, five House Republicans had voted no on the rule vote, which was enough to tank the vote with a razor-thin GOP majority in the lower chamber, and eight possible holdouts had not voted. But the vote remained open as GOP leaders worked to shore up support, allowing lawmakers to change their votes from no to yes. Mr. Trump had taken to Truth Social as a handful of Republican holdouts didn't appear to be budging, declaring "FOR REPUBLICANS, THIS SHOULD BE AN EASY YES VOTE. RIDICULOUS!!!" Republican leaders ultimately won the support of about a dozen GOP opponents to the rule. And when the vote finally came to an end, Rep. Brian Fitzpatrick of Pennsylvania was the sole Republican opposed. , and contributed to this report.
Wall Street Journal
8 minutes ago
- Wall Street Journal
Trump Wants to Expand Nuclear Power. It Won't Be Easy.
President Trump wants the U.S. power industry to go nuclear. His recent executive orders aim to quadruple nuclear-power generation in the next 25 years—a monumental target. For most of the past three decades, the industry has been managing ever-older assets instead of building new reactors. Developers are counting on a supply-chain revival and will have to prove they can deliver on time and on budget to drive interest in the sector.
Axios
10 minutes ago
- Axios
Inside Hakeem Jeffries' decision to filibuster Trump's big bill
The overwhelming consensus on Capitol Hill was that House Minority Leader Hakeem Jeffries (D-N.Y.) would only delay President Trump's "big, beautiful bill" by about an hour. As noon approached on Thursday, that expectation was shattered. Why it matters: For months, the Democratic base has been demanding their party's leaders " fight harder" and use every tool at their disposal to stymie the GOP agenda. In the eyes of many lawmakers, this is Jeffries delivering. Jeffries blasted the GOP's marquee tax and spending bill as an "immoral document," vowing to "stand up and push back against it with everything we have on behalf of the American people." As of late Thursday morning, Jeffries was on track to surpass then-Minority Leader Kevin McCarthy's (R-Calif.) record-breaking, 8-and-a-half hour speech to delay the Build Back Better vote in 2021. If Jeffries keeps speaking until 1:23pm ET, he will have set a new record. What we're hearing: One of Jeffries' central motivations, numerous Democratic sources told Axios, was to ensure that Republicans were forced to pass the bill during daylight hours and not in the dead of night. Jeffries said in his speech: "I ask the question, if Republicans were so proud of this one big, ugly bill, why did debate begin at 3:28am in the morning?" "This is about fighting for the American people ... forcing it into the daylight and telling some stories about the real impacts," House Democratic caucus chair Pete Aguilar (D-Calif.) told Axios. Zoom in: Jeffries spoke with House Speaker Mike Johnson (R-La.) ahead of the speech to warn him about his plans, two sources familiar with the discussion told Axios on the condition of anonymity to share details of a private conversation. The House Democratic leader communicated that he was "just going to do an hour," one of the sources said, but that it "may be longer now." Another source said Jeffries made that decision "when he learned [Johnson] was going to stay all night until he got the votes." What he's saying: "Budgets are moral documents, and in our view ... budgets should be designed to lift people up," Jeffries said in his speech. "This reckless Republican budget that we are debating right now on the floor on the House of Representatives tears people down ... and every should vote 'no' against it," he said. Jeffries was consistently surrounded by dozens of House Democratic colleagues, who raucously applauded him throughout his speech. Yes, but: The Democratic leader did face a bit of frustration from his caucus for leaving even his inner circle in the dark about his plans. "No one is upset Hakeem wanted to do this, but to not tell members, 'be prepared, book multiple flights, be flexible,'" one House Democrat vented, grumbling that it is particularly hard to rebook flights around the July 4 holiday. Another House Democrat fumed that a "heads up would have been nice." Between the lines: Jeffries' marathon speech comes after Sen. Cory Booker (D-N.J.) delivered a 25-hour filibuster in April that earned him plaudits from the Democrats' grassroots as a resistance hero. Later that month, Jeffries and Booker held a day-long sit-in on the Capitol steps in protest of Republicans' fiscal plans. The bottom line:"The base wants to see certain things and we have to show them those things, otherwise they don't believe we're fighting hard enough," another House Democrat told Axios of Jeffries' speech.
