Sponsors (35)
The bill raises after‑tax income and simplifies filing for Social Security beneficiaries and protects trust funds via Treasury appropriations, but it shifts substantial fiscal costs onto taxpayers and annual budget processes, increasing deficit or spending‑cut risks and exposing some retirement funds to appropriations risk.
Seniors and other Social Security beneficiaries will no longer have part of their benefits included in taxable income, increasing their after‑tax income.
Social Security beneficiaries will face simpler tax filing because they no longer must compute the taxable portion of benefits under section 86.
Trust funds (e.g., Social Security) are held harmless for the lost transfers because the bill authorizes annual Treasury appropriations equal to the reduced transfers, protecting benefit financing on paper.
All taxpayers could face higher federal borrowing or spending tradeoffs because Treasury must appropriate funds each year to replace the transfers, increasing budgetary pressure.
A congressional 'sense' forbidding the use of tax increases to pay for the hold‑harmless appropriations raises the likelihood costs are shifted to deficit financing or cuts to other programs.
Railroad Retirement (and similar) funds may become more dependent on discretionary appropriations, exposing those benefits to annual budget negotiations despite the hold‑harmless intent.
Based on analysis of 2 sections of legislative text.
Ends taxation of Social Security benefits for tax years after enactment and directs Treasury payments to replace reduced transfers to Social Security and Railroad Retirement trust funds.
Introduced February 6, 2025 by Thomas Massie · Last progress February 6, 2025
Repeals the rule that can make Social Security benefits taxable and directs the Treasury to make annual payments to Social Security and Railroad Retirement trust funds equal to any reduction in transfers caused by that repeal. It also includes a nonbinding statement that Congress should not raise taxes to fund those payments.