Millions of Americans across the United States benefit from Social Security benefits, but a good amount remain in poverty. Exempting them from income tax isn’t the answer.
These benefits were originally designed to only cover around 40% of a person’s former salary.
Many seniors are living on their Social Security as a primary income. They feel that taxing their benefits could be beneficial, but it may actually be harmful.
Why getting rid of income taxes on Social Security won’t help
Only a small percentage of those claiming benefits actually make the maximum benefit each month.
Most seniors don’t make enough to be subject to income tax.
The max benefit reached over $4,000 in 2022 thanks to the 5.9% COLA increase.
If the income tax benefits were to be cut, it would impact those making over $50,000 in benefits each year, according to Fred Harris, a former senator of New Mexico.
New Mexico is one of the states looking to eliminate Social Security income tax.
Harris goes on to explain that by cutting the Social Security taxes it can cause issues.
Taxes aren’t an issue for many poorer seniors.
$120 million lost each year is a major issue. That money could go toward programs that need them the most.
This includes education, parks, meals, hospitals, and can cause a trickle effect which negatively impacts citizens using these programs.
His solution is to increase tax credits for those that qualify with a low income. This can help keep tax revenue for necessary programs.
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