Massie: Stop taxing Social Security recipients

NKY congressman says that current system amounts to ‘double taxation’ on people. His bill could save some seniors thousands of dollars.

Are you a higher-income Social Security recipient who must pay federal taxes on your benefits? U.S. Rep. Thomas Massie is your friend.

Massie, R-Garrison, last week introduced the latest in a long line of bills proposing to eliminate such taxes for the millions of wealthier recipients who pay them.

Northern Kentucky’s congressman says that the current system is equal to “double taxation” on people, especially since the program is funded by taxes taken out of previous earnings.

Massie was one of eight initial co-sponsors of a similar bill last year – all of them Republicans – but it died in committee. In an email to the Enquirer, Massie said he had twice as many co-sponsors this year, and that he hasn’t talked to anyone who would oppose the bill.

The proposal has been floated several times over the last 10 years as well, but never has gotten any traction.

The current system allows Social Security benefits to be taxed on seniors who have incomes above certain levels. But Massie cites statistics from the Congressional Budget Office that show about 39 percent of all Social Security recipients – about 16.9 million seniors – are taxed on their benefits. The program, Massie said, “Hasn’t kept up with inflation.”

He estimates that the elimination of the tax could save someone with $59,000 in income (including the benefits) upwards of $2,500 a year.

Congress started imposing such taxes in 1984. According to the CBO, these taxes generate $23.8 billion for income benefits and another $15.1 billion for Medicare, which are then infused back into the trust funds for both Social Security and Medicaid.

“The number of seniors paying the tax has continually increased since the thresholds were set in 1984,” Massie said. “Due to inflation and artificially low interest rates on CDs and bonds, what was considered a generous retirement income in 1984 is no longer comfortable.”

Massie said the bill allows the transfer of money from the federal general fund into Social Security if the lack of tax revenue creates an issue.