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WASHINGTON, D.C. – Today, Congressman Paul A. Gosar, D.D.S. (AZ-04) issued the following statement after introducing the No Tax on Social Security Act of 2021.This legislation would change current tax policies by excluding Social Security benefits from being counted as annual gross income and subject to taxation. 

“The decision by Congress to tax Social Security benefits in 1983 has been a public policy disaster from the beginning. Not only has it deprived America’s senior citizens of benefits which they rightfully earned after a lifetime of hard work and paying into Social Security, but its failure to account for inflation means senior citizens are subject to an annual tax hike. 

It makes no sense for the federal government to punish senior citizens who saved for retirement or who continue to work. All this does is increase the scope of the federal government and deprive Americans of what they are rightfully entitled to,” said Rep. Paul Gosar.

Background

In 1983, Congress amended the Internal Revenue Code to include Social Security benefits as part of an American’s annual gross income for the purposes of taxation. Beneficiaries earning more than $25,000 or joint filers making more than $32,000 are subject to taxation and could see their benefits taxed up to 50%or 85%, respectively. 

Congress also failed to account for inflation on the tax threshold. Originally, only 1 in 10 recipients paid taxes on benefits. Failure to account for inflation has subjected more and more Americans to taxable benefits, equating to an annual tax increase on senior citizens. The Social Security Administration now estimates that 56% of recipients pay income taxes on their benefits. 

This legislation corrects mistakes made by Congress and restores full benefits to America’s senior citizens by excluding Social Security benefits from annual gross income and taxation, ensuring recipients receive the totality of benefits they rightly deserve.