Former President Donald Trump has called for major changes to Social Security taxes.
Trump, the Republican nominee for president, wrote on Truth Social: “SENIORS SHOULD NOT PAY TAX ON SOCIAL SECURITY!”
Seniors can start claiming Social Security benefits at age 62, with their benefits increasing every year they wait to claim until 70. However, a substantial portion of their earnings are taxed, lowering the monthly check many rely on as their full income.
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If elected in November and able to implement these changes, Trump could massively impact the support seniors earn from their Social Security retirement benefits and the funding of the social safety net program.
While some seniors are taxed on just 50 percent of their Social Security benefits, others are taxed on 85 percent of their monthly check if they make more than $34,000.
Ending taxes on seniors’ payments could substantially help them face inflation and rising costs of groceries, housing, and health care, but some question Trump’s sincerity in ending the tax.
“I believe this is merely a tactic to gain votes for the upcoming election, but the idea is formidable,” Kevin Thompson, a finance expert and the founder and CEO of 9i Capital Group
Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, said the statement might be a result of his campaign’s fears over lost votes as Republicans have called to raise the retirement age in the past.
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“The Trump campaign may be growing concerned these suggestions could result in lost votes in November,” Beene told Newsweek. “This latest post could be an attempt to ease fears and even show potential benefits a second Trump term would bring to seniors.”
Still, Aaron Cirksena, a Social Security expert and founder and CEO of MDRN Capital, said this new post fits into Trump’s larger push for tax cuts.
“He has always been a strong proponent of tax relief and stimulating economic growth,” Cirksena told Newsweek. “It’s also worth noting that a large portion of Trump’s voter base are older, so it is appealing as eliminating such taxes could increase the income of those living off Social Security.”
Thompson added that if Trump removed these taxes, the current seniors might benefit, but the future of America’s next seniors could be in jeopardy.
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Currently, analysts predict that Social Security funding will be depleted for full payments by the mid-2030s if nothing changes. Reducing taxes on benefits going out could only make the situation worse.
“The implications would be dire,” Thompson said. “You don’t need to be a math whiz to understand that reducing the inflow of funds into a system already projected to face insolvency within a decade is problematic.”
If the Social Security system gets less funding than it already receives, seniors will face significant cuts to their benefits in the future.
Michael Ryan, a finance expert and the founder of michaelryanmoney.com, said that while Trump’s idea “sounds great on paper,” it would ultimately harm many future retirees.
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“Social Security’s funding is already on shaky ground,” Ryan told Newsweek. “I can’t tell you how many times I’ve had clients ask, ‘Will Social Security even be there for me?’ Eliminating this tax could speed up the program’s financial troubles. It’s like taking a pay cut when you’re already struggling to pay the bills.”
While Ryan said current retirees would see the end of taxes as a huge help, the larger picture is more troubling.
“Who’s going to foot the bill? If we cut this revenue stream, something’s gotta give. Higher taxes elsewhere? Spending cuts? It’s not an easy fix,” Ryan said.
