XPost: or.politics, alt.politics.republicans, soc.retirement
XPost: talk.politics.guns, sac.politics

The Senate’s version of the “big, beautiful bill,” which passed Tuesday, includes a $6,000 tax deduction for Americans 65 or older.

The provision does not entirely end taxes on Social Security, but it would
zero out the Social Security tax burden for 88 percent of seniors,
according to an estimate by President Trump’s Council of Economic
Advisers.

That’s up from 64 percent of seniors who are currently exempt from Social Security taxes, meaning about 14 million additional seniors will benefit
from the change.

The version of Trump’s megabill that squeezed through the Senate would
offer a tax deduction of $6,000 to seniors making up to $75,000
individually, or $150,000 on a joint return. The deduction is lowered for incomes above that level, and phased out altogether for seniors with
individual incomes of more than $175,000, or $250,000 jointly.

Seniors can currently claim a standard deduction of $15,000 (or $30,000
for couples), plus an additional senior-specific deduction of $2,000 (or
$3,600 for couples). The Senate bill would also raise the standard
deduction by a few hundred dollars.

The median income for seniors in 2022 was about $30,000.

The new legislation is expected to provide limited benefits for lower-
income seniors because they already pay less in taxes.

“While it may be pitched as going to low-income seniors, low-income
seniors don’t pay taxes already,” Marc Goldwein of the Committee for a Responsible Federal Budget (CRFB) told The Washington Post.

Goldwein said the new deduction would be more meaningful for upper-middle- class seniors.

The new senior deduction also has implications for the federal fund that
pays out Social Security benefits, which was already facing insolvency in
the coming decade: Along with other changes to the program, the deduction
could speed up the exhaustion of the Social Security trust fund by about a year, the CRFB estimated last week.

The Senate version, which is currently set to expire after 2028, could
cost $91 billion over four years, according to the CRFB. The House version
of the tax bill would set the new senior deduction at $4,000, a $66
billion cost over four years.

It estimated that under the changes in the Senate’s bill, the Social
Security trust fund could be insolvent by 2032.

Currently, Social Security benefits are partially taxable, with revenue
from those taxes going back into the fund.

The new deduction, in addition to the extension of the 2017 GOP-passed tax
cuts and other changes in the megabill, would reduce the total taxation of benefits by about $30 billion annually, the advocacy group said.

The cost of the megabill is a major sticking point for some fiscal hawks
in the House, many of whom thought the Senate would trim tax cuts first
passed in the lower chamber, not ramp them up.

Rep. Andy Harris (R-Md.), chair of the ultraconservative House Freedom
Caucus, and Rep. Ralph Norman (R-S.C.) are among those signaling their opposition.

However, they’re up against a leadership team determined to push the bill through and a president who has insisted he wants it on his desk by
Friday.

The House began voting on the bill Wednesday morning.

https://thehill.com/business/personal-finance/5381335-senate-social- security-tax-deduction/

--- SoupGate-Win32 v1.05
* Origin: fsxNet Usenet Gateway (21:1/5)