By: Bill Brettner
BACKGROUND:
There is a proposal to eliminate taxeson Social Security Benefits in 2025. The typical savings for a “single filer” would be $5,500.00 in 2025. A typical “married filer” would save $9300.00 in 2025. Don’t know about you, but I can sure use the money.
Donald Trump’s elimination of Social Security Benefit taxes proposal would divert some of that give-away illegal migrant money to American Citizen Seniors’. The other side only debates about how high to raise your taxes …. Social Security included. At a minimum, they want to go back to the onerous Obama regime tax brackets and income amounts shown in this email/spreadsheet in 2026.Due to the “1993 Omnibus Budget Reconciliation Act”, President Bill Clinton raised the proportion of benefits includable in the Social Security benefit income in the Federal personal income tax up to 85%. The result is, the “hammering” of “low and middle class” seniors with what is commonly called the “Social Security TAX TORPEDO“.
In typical Bill Clinton fashion, he did it in a sneaky, “Slick Willie” way. He used what I call, the “Arkansas two-step”, to extort income from unsuspecting “seniors“. They invented a confusing scheme called “Provisional Income” to overlay the existing marginal tax rate system. In mathematics, it is called a function of a function … confusing YES. I have included receipts showing how “Provisional Income“, or what the IRS calls “Combined Income“, works against seniors’ in a very circuitous fashion. This scheme does not apply to the pre-retirement working public. It’s kind of a “pre-death” tax for the middle-class Seniors’. I thought all good “Democrats” were advocates for the lower and middle class “retired workin-men/women“?
The concept is called “double taxation”! While Democrats give away cell phones, four star hotel rooms, and EBT cards to illegal migrants … U.S. citizens who are victims of emergencies, veterans, and senior citizens get kicked to the financial curb. Making it worse, the Provisional Income tax levels have NEVER been adjusted for inflation since the Clinton 1993 law was enacted. This ensnares, every year, a larger and larger portion of the Social Security population because of inflation. Now even worse under Biden-Harris-inflation.
When enacted in 1993, the Clinton law only affected 11 percent of beneficiary families, concentrated in the top three deciles by family income. A kind of “means Tax”. 30 years later, it affects over half of the retired population in the U.S. (see “1994 Clinton Taxation of Social Security Income” Published in Social Security Bulletin – Vol. 57 – Summer 1994)
The method of fleecing (double taxing) seniors, skimming from Social Security, again, is called “Provisional Income“. Before “Provisional Income“, all the money you put into Social Security was all intended to be paid back to you while you are alive. Not so today !!!
Unless Donald Trump gets elected, the effects of “Provisional Income“, i.e. double taxation will get much worse. The effect of Trump’s 2024 proposed elimination of Social Security taxation can actually save typical singles, in the 22% marginal tax bracket, approximately $5,500.00 annually, and, typical married couples in the 22% marginal tax bracket, approximately $9,300 annually. Do you deserve it? Yes … why not, you built this country!!!!
But what happens if “Komrade Kamala” gets elected? We go from the most middle class friendly (to date) Trump Tax Cuts to the onerous Obama Tax Code at a minimum. Perhaps “Komrade Kamala” will jack the rates up further? In 2019, she thought a top rate of 70% sounded great to pay for all the “newcomers” under the ongoing Democrat Voter Registration Drive, the migrant invasion. Paid for by you !!!
THE “PROVISIONAL INCOME” EFFECT ON SENIOR TAXES FOR 2024 (TRUMP TAX CUTS) & 2026 (OBAMA TAX REGIME). The “Provisional Income” inflated marginal tax rates, for Seniors’, is what is called the “Social Security TAX TORPEDO“. Bottom line: NO “Provisional Income” …. NO TORPEDO !!! Trump is on to something !!!!
BASIS:
If “Provisional Income” and existing Trump or Obama tax rates survive, Seniors’ marginal tax rates will well exceed Warren Buffet’s and/or Bill Gates’ maximum marginal tax rates of 37%/39.6%. That’s if Warren and Bill don’t receive their compensation using long term capital gain rates of 15% or 20%. Warren’s poor Secretary 🙁
- Haven’t mentioned it, but overlaying Social Security, Long term Capital Gain, and State tax curves on normal tax brackets can increase a Seniors’ total marginal tax rate to well over 50%, Here in Arizona … add 2.5%. Thought 37%/39.6% were the top rates? Because the rates peak over small portions of Ordinary Income the effects are masked when calculating effective or average tax rates. Let Buffet and Gates patronize you some more about tax rates
- Note: Standard Deductions. As a Senior you have a much diminished opportunity for personal exemptions. 2024 deductions are half of the 2026 standard deductions. For Example, this makes the Single 2024 Standard Deduction of $16,550.00 much more attractive than the 2026 $8,300.00 Standard Deduction for Seniors’.
- Under the current law you can minimize your Social Security taxability under the upper limit of 85% of Social Security Benefit taxability using TAX FREE monies.
- The 2024 Trump Tax Cut Brackets are clearly superior to the 2026 Brackets especially for the lower and middle class tax paying populace. NOTE: the 2024 brackets are 3% to 4 % lower and all brackets contain a larger range of incomes. This is illustrated in the graphs as well. This results in a much lower tax bill for all taxpayers. The Democrats have been lying about helping Billionaires for years !!!
- Trump’s proposal will eliminate the Social Security Tax Torpedo and save recipients $ THOUSANDS !!!
CONCLUSION:
The dirty little secret … The maximum Social Security, age 70, monthly benefit in 2024 is $4,873.00. With 2024 Social Security salary Caps of $168,600 (well below the hated 1%ers salary floor of $548,000), the more affluent look at FICA as a fixed cost of doing business. The Truth of the Matter is the Social Security system is largely funded by lower and middle class citizens. With the many Christmas Tree Ornaments and a massive influx of illegal migrants the system will go bust quicker than the Trustee’s Report of 2033. There is a solution … 1) make the donor class pay their fair share to social security REMOVE SALARY CAPS 2) remove illegal migrants from our country 3) only U.S. citizens can benefit from Social Security. The Bill Gates 0.001%ers have a salary floor of $77 million … time for them to belly up to the bar and pay your fair share !!!
Finally, get rid of PROVISIONAL INCOME. Given the choice, I wouldn’t have invested 6.2% of my every paycheck to Social Security during my work years, that not being a choice, I want Provisional Income to go away. Please, no more middle class shakedowns.