Sponsors (35)
The bill raises after-tax income and simplifies taxes for Social Security beneficiaries and backs trust funds with annual appropriations, but it shifts fiscal costs to the Treasury—raising risks of higher deficits or spending tradeoffs and making some retirement funds more subject to annual budget decisions.
Seniors and other Social Security beneficiaries: a portion of Social Security benefits will no longer be included in taxable income, increasing their after-tax income.
Seniors, beneficiaries, and veterans: the bill authorizes annual Treasury appropriations to replace transfers lost to trust funds, aiming to preserve trust fund balances despite the tax exclusion.
Seniors and other beneficiaries: tax filing is simplified by removing the need to compute the taxable portion of Social Security benefits under section 86.
Taxpayers and the general public: requiring Treasury to appropriate funds to hold trust funds harmless could increase federal borrowing or require spending tradeoffs elsewhere.
Taxpayers and middle-class families: a Sense of Congress discouraging tax increases to pay for the hold‑harmless appropriations raises the risk that costs will be shifted to deficits or to spending cuts in other programs.
Veterans and Railroad Retirement beneficiaries: Railroad Retirement funds may become more dependent on annual discretionary appropriations, exposing benefits to year-to-year budget negotiations despite the hold‑harmless intent.
Based on analysis of 2 sections of legislative text.
Eliminates the rule that can make Social Security benefits taxable for future years and directs Treasury to annually reimburse trust funds for the lost transfers.
Official title: To amend the Internal Revenue Code of 1986 to repeal the inclusion in gross income of Social Security benefits.
Introduced February 6, 2025 by Thomas Massie · Last progress February 6, 2025
Repeals the rule that can make Social Security benefits taxable for taxable years beginning after enactment, so beneficiaries will not have to include Social Security income under the current inclusion rule. It also authorizes annual appropriations from the Treasury to each Social Security trust fund and each Railroad Retirement fund to replace the transfers those funds would have received under the repealed rule, and includes a non‑binding sense of Congress urging that tax increases not be used to fund those hold‑harmless payments.