House Republicans Propose Exempting Social Security Benefits From Income Tax

House Republicans proposed a bill on Thursday, the Senior Citizens Tax Elimination Act, that would remove Social Security benefits from the calculation of gross earnings for income tax purposes.

The bill was first proposed by Representative Thomas Massie, R-Kentucky, and is co-sponsored by a total of 25 House members, all Republicans. It was referred on May 11 to the House Committee on Ways and Means. As none of the co-sponsors sit on the tax-writing panel, it is unclear if the bill will advance.

Massie has introduced this legislation in each Congress since 2012, when he first took office. The bill also states that other taxes could not be raised in order to offset the cost of the legislation, should it be passed, meaning other federal spending would likely have to be cut in order to cover the reduction in revenue to the federal Treasury.

Massie refers to the taxation of Social Security benefits as an “unjust double tax.”

Prior to 1984, Social Security benefits were tax-exempt. That is still true today for taxpayers with an annual income of less than $25,000. For taxpayers with income between $25,000 and $34,000, 50% of their Social Security benefits are taxable. For taxpayers earning more than $34,000 per year, between 50% and 85% is taxable. The income categories in the tax schedule were set in 1984 and have never been pegged to inflation.

The Social Security Administration estimated that the taxation of Social Security benefits provided $49 billion in revenue for the Old-Age, Survivors, and Disability Insurance fund in 2022.