Representives Angie Craig, D-Minn., and Yadira Caraveo, D-Colo., have sponsored new legislation — the You Earned It, You Keep It Act — to repeal the federal taxation of Social Security benefits starting in 2025.
"For almost a century, America has upheld a fundamental promise — that if you work hard and play by the rules, you'll be able to enjoy a secure retirement. However, historic inflation is eroding seniors' budgets, jeopardizing the financial security they've worked their whole lives to achieve," Caraveo said Monday in a statement.
Craig's bill would allow the Social Security Administration to continue making all payments on time and in full through 2054 — 20 years longer than the current projection of 2034, according to an analysis from Social Security's Office of the Chief Actuary.
The same analysis showed that the You Earned It, You Keep It Act would also reduce the federal debt by $8.9 trillion over 75 years, Craig explained in a statement.
(For more details, see 6 Things to Know About the New Bill Repealing Social Security Income Taxes.)
"This bill is a win-win — it's a tax cut for seniors and a way to ensure more Americans can depend on the Social Security benefits they've earned. And on top of that, it's fiscally responsible," Craig said. "I'm leading the charge on this issue in Congress because we need to get money back in the pockets of middle-class Americans. The You Earned It, You Keep It Act will help us get it done."
(We asked retirement planning and policy experts what they think of the bill. Here's what they said.)
