Donald Trump has made cutting taxes on Social Security benefits a centerpiece of his campaign to win over older Americans; but without Democratic support in the Senate, that promise is unlikely to become reality anytime soon.
Republicans have introduced multiple bills in both chambers of Congress to eliminate federal taxes on retirement income, yet the legislation remains stuck, with little indication that Democrats will come on board.
Democrats have introduced a bill in the Senate which is more far reaching than just focusing on elimination of Social Security Taxes, but it does not have bipartisan support with the Republicans.
The impasse is especially frustrating to many retirees given that the last major bipartisan Social Security reform; wasn’t aimed at all seniors. Instead, it focused narrowly on improved benefits for certain government employees.
While that change increased benefits for public workers, it left millions of everyday retirees still paying taxes on their hard-earned Social Security income.
This legislative pattern has raised new questions: Why are across-the-board tax cuts for seniors stalling, while targeted relief for government workers drew swift bipartisan agreement?
During his 2024 campaign, Donald Trump pledged that seniors would no longer pay taxes on their Social Security benefits.
But that promise is notably absent in the new Republican tax bill making its way through Congress.
The One Big Beautiful Bill Act; named after one of President Donald Trump’s signature phrases fulfills several of his campaign pledges, including a temporary end to taxes on tips and overtime pay.
However, it stops short of eliminating taxes on Social Security benefits, a key demand from many seniors.
Still, the bill offers some tax relief for older Americans through other measures.
The Byrd Rule Prevents Changes
Republican lawmakers say the reason they didn’t cut taxes on Social Security benefits comes down to the “Byrd Rule.”
This rule prevents changes to entitlement programs like Social Security through the budget reconciliation process.
Republicans have a slim majority to get the tax bill passed without any Democratic support.
Amending the Social Security Act takes 60 votes in the Senate; a threshold neither party has met in over four decades.
For decades, lawmakers have debated whether taxing Social Security benefits is fair; but no meaningful fix has ever materialized. What was once sold to the public as a narrow, high-income provision now affects the majority of retirees.
The first major change came in 1983, when Congress passed reforms to address a looming solvency crisis.
At the time, only about 10% of retirees were expected to pay taxes on 50% of their benefits, with the rest exempt. But those income thresholds were never indexed to inflation; seemingly by design.
A decade later, the Omnibus Budget Reconciliation Act of 1993 expanded the tax to cover up to 85% of benefits for individuals earning more than $34,000 and couples earning over $44,000.
Those dollar limits haven’t changed since. As wages, pensions, and retirement savings grew, more and more retirees found themselves subject to this tax.
By 2015, nearly 60% of retired households were paying federal income tax on their Social Security. The growing burden has turned what was once a targeted measure into a widespread levy; one that hits middle-income seniors the hardest.
In the recent past, Republican lawmakers have introduced bills aimed at fully eliminating federal taxes on Social Security benefits or raising the limits on taxation of benefits.
What the RETIREES FIRST Act Would Have Done
The Reducing Excessive Taxation and Inefficiencies by Reforming Elder Exemptions to Support Fairness, Inflation Relief, and Simpler Taxes Act (RETIREES FIRST Act) would amend the Internal Revenue Code to to increase the threshold amounts for inclusion of Social Security benefits in income, and for other purposes.
It was introduced as S.5603 in12/19/2024 by Sen. Blackburn, Marsha [R-TN] and read twice and referred to the Committee on Finance in the 118th Congress.
The Senior Citizens Tax Elimination Act Goes Even Further
Rep. Thomas Massie’s bill, the Senior Citizens Tax Elimination Act, would amend the Internal Revenue Code of 1986 to repeal the inclusion in gross income of Social Security benefits.
Massie has framed the legislation as “a moral obligation” to retirees, noting that they have already paid taxes on their wages once and shouldn’t have to pay again when collecting benefits.
“This is simply a way for Congress to obtain more revenue for the federal government at the expense of seniors who have already paid into Social Security,” he said in a statement. “My bill would exempt Social Security retirement benefits from taxation and boost the retirement income of millions of older Americans.”
Introduced as H.R.1040 on 02/06/2025 it has been referred to the House Committee on Ways and Means.
However, to set expectations; the Kentucky Republican has introduced this bill almost every session of Congress since 2012 and it has not passed.
Social Security Expansion Act by Senator Bernie Sanders
The Social Security Expansion Act (S.770) was introduced in the Senate by Sen. Sanders, Bernard [I-VT] on 02/27/2025 as a bill to enhance Social Security benefits and ensure the long-term solvency of the Social Security program.
A number of Democrats including Ms. Warren, Mr. Merkley, Mr. Welch, Mr. Padilla, Ms. Smith, Mr. Van Hollen, Mr. Markey, Mr. Booker, Mrs. Gillibrand, and Mr. Whitehouse have jumped on board to support this bill which includes increase of the bend point percentages, COLA calculation changes, increase in benefits for low income earners and extending benefits for children who are full-time students.
At a high level, seniors would receive an extra $200 in benefits per month and the formula used for COLA would rely on Consumer Price Index for Elderly Consumers (CPI–E).
One of the key elements of the proposal is applying the full 12.4% Social Security payroll tax—currently shared by employees and employers; to income above $250,000. As it stands in 2025, only earnings up to $176,100 are subject to the Social Security tax.
According to the Social Security Administration’s chief actuary, this adjustment would generate enough additional revenue to keep the program solvent for at least another 75 years.
H.R.1700 is the related bill which has been referred to the Committee on Ways and Means, and in addition to the Committees on Education and Workforce, and Transportation and Infrastructure.
RETIREES FIRST Act Introduced in the 119th Congress
Rep. Malliotakis, Nicole [R-NY-11] introduced H.R.2266 on 03/21/2025 to amend the Internal Revenue Code of 1986 to increase the threshold amounts for inclusion of Social Security benefits in income.
The bill has been referred to the Committee on Ways and Means, and in addition to the Committee on Appropriations.
No Path Forward Without Democrat Support
Despite the flurry of legislative proposals, none of these bills can pass the Senate without bipartisan cooperation.
Without at least 60 votes in the Senate, these bills remain symbolic gestures; unless Democrats and Republicans decide to engage as they did with the last bill in December.
The most recent change to Social Security benefits was the Social Security Fairness Act.
In a dramatic midnight vote on December 21st, 2024, the Senate passed the Social Security Fairness Act, a controversial measure to boost retirement benefits for public sector workers with an overwhelming 76-20 majority.
On Jan 5th, 2025, President Biden signed into law legislation extending additional benefits to nearly 3 million retirees.
Critics warned that the bill, which repeals provisions reducing payouts for pension recipients, could further destabilize Social Security’s already strained finances.
The bill aims to repeal two provisions, the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO), which currently reduce Social Security payouts for public sector worker.
Hailed as a victory by many public employees and their unions, the move has sparked intense debate over equity, fiscal sustainability, and the future of Social Security.
While the bill drew support across party lines, it notably applied only to government retirees, not the general senior population.
Trump’s Popular Promise Ends with Legislative Gridlock
Trump has repeatedly promised to protect and enhance Social Security, and eliminating taxes on benefits has become a pillar of that message.
However, despite campaign rallies and public endorsements of these bills, he has no formal mechanism to advance them unless Republicans regain at least 60 Senate seats and control of Congress.
Unfortunately seniors for now will have to rely on the Senior Bonus in the One Big Beautiful Bill.
The ‘Senior Bonus’ Sounds Nice — Until You Do the Math
Instead of eliminating taxes on benefits, the GOP has proposed a new “senior bonus”; a $4,000 tax deduction for people 65 and older.
While that sounds helpful, the actual savings are modest.
For Americans aged 65 and older, the GOP-backed bill increases the standard or itemized deduction by an extra $4,000 from 2025 through 2028.
While seniors already receive a higher deduction under current law, this temporary boost would begin phasing out at $150,000 for joint filers and $75,000 for individuals.
At a 12% tax rate, for most seniors, this bonus amounts to less than $500 a year; barely a dent in a single month’s expenses.
Since the bill increases standard deduction for seniors, the biggest benefits are to seniors who currently do not pay any income tax on their Social Security.
Currently the threshold is $25,000 combined income for single filers and $32,000 for married couples filing jointly.
Though not as impactful as eliminating taxes on Social Security, the added deduction still benefits many retirees; especially those who already pay no tax on their benefits due to low combined incomes.
Millions Still Taxed on Benefits They Were Promised Would Be Safe
Currently, about 40% of Social Security recipients; nearly 27 million people, pay federal income taxes on their benefits.
These taxes were introduced in 1984, but the income thresholds haven’t been adjusted for inflation in decades.
When the tax was introduced, it impacted only 10% of the households. Now, almost half of the senior population is taxed on their hard earned Social Security.
As a result, more seniors get taxed each year, even if their purchasing power hasn’t changed.
Social Security and Medicare rely on taxes from benefits to stay solvent.
In 2024 alone, this taxation added $50 billion to the trust funds.
While eliminating these taxes would offer short-term relief, experts warn it could bring forward the date when the system runs out of money; potentially leading to automatic benefit cuts by 2032.
Critics point out that fiscal concerns were never a roadblock when benefits were increased for government workers.
The enhancements from the Social Security Fairness Act are projected to add approximately $195 billion to federal deficits over ten years.
This increase accelerates the projected insolvency date of the Social Security Trust Funds by about six months, now estimated around 2035.
What Seniors Should Watch for as the Bill Moves Forward
The GOP legislation isn’t final yet. it now heads to the Senate, where revisions are expected before it can reach the president’s desk.
While changes are possible, few expect the Social Security exemption to be added back in.
In the House bill, low income seniors would receive the maximum benefit. Majority of the Social Security recipients would get minor benefits for the next 4 years.
Efforts to eliminate taxes on Social Security benefits continue to face political and fiscal challenges.
The contrast between broad-based proposals for all retirees and targeted benefits for government workers raises difficult questions about fairness.
While government retirees saw fast-track relief, millions of seniors still face yearly tax bills on their retirement income.
Unless Democrats and Republicans can bridge the gap, Trump’s promise to eliminate Social Security taxes may become yet another political talking point; rather than policy.
Seniors will be watching closely; and likely pushing hard for more meaningful tax relief in future years.
Like Financial Freedom Countdown content? Be sure to follow us!
Retirement Dreams on Hold as 73% of the Sandwich Generation Support Parents and Adult Kids, Survey Finds
If you’ve ever flown on a plane, you know the drill: “Put your own oxygen mask on first before assisting others.” It’s easy advice to hear, but much harder to live by — especially if you’re caring for aging parents and supporting children. Welcome to life in the sandwich generation. Many people in their 40s and 50s face this dual responsibility right when their own retirement savings should be hitting full speed. A new survey conducted by Athene of the Sandwich Generation, found that nearly three quarters (73%) of respondents have adjusted their retirement goals to support their adult children or aging relatives, including: – Delaying retirement (34%) – Using retirement assets to support their family (22%) – Not planning to retire at all (9%) If you’re feeling squeezed from both sides, you’re not alone. Here’s what you need to know to survive and thrive during this overwhelming phase of life.
Treasury I Bond Rates Increases from 3.11% to 3.98% – But with a 1.1% Fixed Rate Locked for 30 Years, Is It Still a Smart Investment?
Inflation has become a significant concern. During the past three years of surging inflation, I bonds offered a safe and attractive investment option. However, with recent lower CPI numbers, the current composite rate for I bonds bought after May 1, 2025 will be 3.98%. The rate has slightly increased from the prior 3.11% but is a sharp decline from the enticing 9.62% annual rate available in May 2022 or even the 4.28% available for bonds purchased before October 31st, 2024. As rates decrease, investors are now considering whether it’s still worth buying Series I bonds.
While singles may have fewer Social Security filing options than married couples, smart planning around when to claim benefits can pay off for anyone, including those flying solo.
Maximize Your Benefits: Essential Social Security Strategies for Singles
Did you find this article helpful? We’d love to hear your thoughts! Leave a comment with the box on the left-hand side of the screen and share your thoughts.
Also, do you want to stay up-to-date on our latest content?
1. Follow us by clicking the [+ Follow] button above,
2. Give the article a Thumbs Up on the top-left side of the screen.
3. And lastly, if you think this information would benefit your friends and family, don’t hesitate to share it with them!
John Dealbreuin came from a third world country to the US with only $1,000 not knowing anyone; guided by an immigrant dream. In 12 years, he achieved his retirement number.
He started Financial Freedom Countdown to help everyone think differently about their financial challenges and live their best lives. John resides in the San Francisco Bay Area enjoying nature trails and weight training.
Here are his recommended tools
Personal Capital: This is a free tool John uses to track his net worth on a regular basis and as a retirement planner. It also alerts him wrt hidden fees and has a budget tracker included.
Platforms like Yieldstreet provide investment options in art, legal, real estate, structured notes, venture capital, etc. They also have fixed-income portfolios spread across multiple asset classes with a single investment with low minimums of $10,000.
Source: Trump
