The You Earned It, You Keep It Act: A Proposal to End Federal Taxes on Social Security Payments
Saving and planning for retirement is an essential part of life for many Americans. Social Security payments help many retirees meet their financial needs, yet the taxes that come with them can cut into those much-needed benefits.
That’s where the You Earned It, You Keep It Act comes into play. Introduced by Rep.
Angie Craig, the You Earned It, You Keep It Act is a proposal designed to end federal taxes on Social Security payments. This legislation addresses a critical concern that many Americans face, as taxes on Social Security payments can impact seniors living on fixed incomes.
Proposal to end federal taxes on social security payments
The You Earned It, You Keep It Act is aimed at providing relief for retirees that rely on Social Security benefits. Under the current system, Social Security benefits are taxable, which means that retirees may pay federal taxes on a portion of that income.
Rep. Angie Craig has proposed an end to this, arguing that people who have paid into Social Security throughout their working lives should be able to keep those benefits without having to pay additional taxes.
This proposal has been welcomed by many retired Americans who argue that the government should not be taxing these citizens twice on the same income. According to Rep.
Craig, the You Earned It, You Keep It Act will put more money back in the pockets of retirees, many of whom rely on Social Security payments as their primary source of income.
Impact on rising inflation for seniors
The rising cost of living can be a significant concern for many seniors, particularly those with fixed incomes. The Senior Citizens League warns that Social Security benefits have lost 30% of their purchasing power since 2000 and have only seen a 0.3% increase in benefits (COLA) in 2021.
The You Earned It, You Keep It Act could help offset the impact of rising inflation on seniors. By eliminating taxes on Social Security benefits, retirees would have more funds available to address their essential needs, such as healthcare, food, and housing.
Social Security Solvency and Revenue Deficit
Concerns about potential Social Security insolvency
Social Security is an essential safety net program, providing retirement, disability, and survivor benefits to millions of Americans. However, there have been long-standing concerns about the program’s solvency, particularly in the face of an aging population.
The Social Security Trustees Report, which is prepared annually, estimates that the Social Security Trust Fund will be fully depleted by 2034. This means that current payroll tax revenue will only cover about 79% of promised benefits to recipients.
The You Earned It, You Keep It Act does not address the solvency of the Social Security trust fund, but Rep. Craig has stated that the legislation should not add to the revenue deficit.
Proposal to raise relevant taxes on high earners to address the revenue deficit
One way to address the Social Security revenue deficit is to increase the taxes on high earners. Currently, Social Security taxes are capped at $142,800 of earned income for 2021.
Any income over this amount is not subject to Social Security taxes. Rep.
Craig and other legislators have proposed addressing the revenue deficit by lifting this cap and subjecting high earners to the existing 12.4% tax rate on all of their earned income. Conclusion:
In conclusion, the You Earned It, You Keep It Act proposes to end federal taxes on Social Security payments, providing relief for seniors relying on their earned security benefits.
However, this legislation does not address Social Security solvency, which remains a long-term concern. The proposal suggests raising taxes on high earners to address the revenue deficit; thus, the legislation will benefit millions of Americans who have diligently paid into Social Security throughout their working lives.
Rep. Angie Craig’s Other Proposed Legislation
Although the You Earned It, You Keep It Act is Rep.
Angie Craig’s most high-profile proposal, she has also introduced several other pieces of legislation focused on driving change in other areas.
Year-Round Fuel Choice Act and Strengthening the Agriculture and Food Supply Chain Act
One of the main focuses of Rep. Craig’s legislative agenda includes strengthening the agriculture and food supply chain in America.
The Year-Round Fuel Choice Act and the Strengthening the Agriculture and Food Supply Chain Act are two pieces of legislation introduced by Craig that aim to work towards this goal. The Year-Round Fuel Choice Act seeks to help ethanol and biofuel producers by making it easier for consumers to purchase and use higher blends of biofuels throughout the year.
Currently, the Environmental Protection Agency (EPA) places restrictions on the retail availability of higher biofuel blends during the summer months, limiting the market for ethanol and biofuel producers. On the other hand, Strengthening the Agriculture and Food Supply Chain Act aims to address supply chain issues in food production by investing in domestic agriculture and better connecting small and medium-sized farmers with consumers, particularly amidst the pandemic.
These proposals demonstrate Rep. Craig’s commitment to the agricultural community and its impact on the economy in the long run.
Affordable Insulin Now Act to Cap Out of Pocket Costs for Diabetes Medication
Another key priority of Rep. Craig’s is addressing the rising cost of healthcare and access to medication.
She has introduced the Affordable Insulin Now Act, which aims to cap the out-of-pocket costs that patients with diabetes pay for insulin. Currently, some patients with diabetes are paying over $1000 per month for insulin medication, which is a significant burden for those with chronic healthcare needs and can often lead to financial distress and healthcare anxiety.
The Affordable Insulin Now Act aims to level the playing field by creating a price cap on insulin as part of the wider Reduce Out-of-Pocket (ROP) Costs package of legislative proposals. This legislation seeks to ensure that individuals with diabetes can access the vital medication they need without being burdened with the steep and often inequitable costs associated with it.
Potential Obstacles to Passing the You Earned It, You Keep It Act
While the You Earned It, You Keep It Act has received widespread support from advocates for seniors and retirement security, it faces several potential obstacles to being passed into law.
Possibility of the Bill Not Gaining Enough Traction
One significant obstacle to passing the legislation is the possibility of it not gaining enough traction in the House of Representatives. While the Democrats hold a slim majority in the House, the legislation is expected to face resistance from Republicans, who control the Senate.
Moreover, as the midterm elections approach, all sides of the aisle may become hesitant to take on significant tax legislation. Still, Rep.
Craig remains optimistic, arguing that this legislation would significantly benefit Americans and should receive bipartisan support.
Potential Resistance from High Earners Due to Increased Taxes
Another significant obstacle to the You Earned It, You Keep It Act is the potential resistance it may face from high earners who will be subject to increased taxes under the proposal. This resistance is not just from the wealthy but also from advocacy groups who argue against raising taxes on high earners, even if it means more access to essential federal programs.
While Rep. Craig’s alternative proposal, to raise relevant taxes on high earners to address the revenue deficit, has garnered support, it faces resistance from those who argue that this may disincentivize wealth creation and investment.
Given the polar nature of these differing views, overcoming this obstacle will require a bipartisan effort. In conclusion, though Rep.
Angie Craig’s proposals aim to drive change in different areas besides retirement security, her You Earned It, You Keep It Act has received significant attention. However, as with any piece of legislation, there are challenges to these proposals.
It is up to Rep. Craig and fellow lawmakers to build consensus and overcome potential hurdles, ultimately forging a path towards the betterment of American society.
In summary, Rep. Angie Craig’s proposals, primarily the You Earned It, You Keep It Act, aim to address significant concerns affecting American citizens, including retirement security and healthcare access.
These proposals face potential obstacles, such as a lack of bipartisan support, potential resistance from high earners, and the possibility of possible mid-term elections. However, Rep.
Craig remains committed to driving change and ensuring reform for the betterment of the agricultural sector, supply chain, and diabetic patients. It is crucial to keep paying attention to these proposed measures that are vital for the overall well-being of society, especially for those who have paid into Social Security their whole lives.