Trump’s plan to end taxes on Social Security will benefit this 1 group of Americans the most, report finds

Core Insights - Approximately 50% of Social Security recipients currently pay federal taxes on their benefits, with projections indicating this will rise to over 56% by 2050 [1] - The share of Social Security benefits taxed as federal income has increased from 2.2% in 1994 to 6.6% in 2022 [1] Group 1: Taxation of Social Security Benefits - The thresholds for combined income that determine tax liability on Social Security benefits have not been adjusted since 1993, leading to more seniors being taxed as benefits increase with cost-of-living adjustments [2] - Benefits are taxed for individuals whose combined income exceeds $25,000 and for joint filers exceeding $32,000, which are considered low thresholds [4][5] - The taxation of benefits is intended to provide a stronger revenue stream for the Social Security program [6] Group 2: Implications of Eliminating Taxes - Eliminating taxes on Social Security could potentially reduce government revenue by $1.5 trillion over 10 years and deplete Social Security's trust funds by late 2032 [9] - High-income seniors could gain up to $100,000 in lifetime welfare if taxes on benefits are eliminated, while younger workers could lose about $10,000 in lifetime welfare [8] - Current projections suggest a 23% reduction in Social Security benefits once the trust funds are depleted, which could increase to 33% if taxes on benefits are removed [14] Group 3: Legislative Context - The One Big Beautiful Bill Act signed by Trump introduced new tax deductions for seniors but did not eliminate taxes on Social Security benefits [3][15] - Lawmakers may be reluctant to approve tax cuts that would eliminate taxes on benefits due to the existing financial shortfall in the Social Security program [15]