StoneBlue BLOG

Social Security

They are saying social security benefits will be reduced starting in 2035 when the trust fund reserves are expected to be exhausted, leading to a situation where taxes will only cover about 75% of scheduled benefits. Changes to benefits and revenue sources will likely be necessary to address this shortfall.

One solution is to increase the payroll tax by scrapping the cap.

Remove the income tax on social security that Ronald Reagan added in 1983 which took effect in 1984. Ronald Reagan signed the 1983 Amendments to the Social Security Act, which allowed for a portion of Social Security benefits to be subject to federal income tax starting in 1984. This marked the first time Social Security benefits were taxed.

Additionally in 1993 as part of the Omnibus Budget Reconciliation Act Bill Clinton enacted legislation that increased the portion of Social Security benefits subject to taxation to 85% for higher income beneficiaries.