What is wrong with the tax cut for SS recipients. Although I will save

[Wiz Imp]

37. You are partly right and partly wrong.

You are correct that the OBBB tax break for seniors is independent of whether or not they are receiving social security. The bill never mentions SS Benefits. There is no direct reduction in taxes paid on SS Benefits.

However, income taxes which are collected from SS Benefits do go back to the SS Trust Fund and not into the General Fund. I did not know that myself until yesterday. Part of the reason I didn't think that was true is I don't understand how they determine what portion of taxes collected come from the SS Benefits vs other income. Anyway, this explains it somewhat:

https://www.ssa.gov/history/taxationofbenefits.html

Congress passed and President Reagan signed into law the 1983 Amendments. Under the '83 Amendments, up to one-half of the value of the Social Security benefit was made potentially taxable income. The specific rules adopted in 1983 were:

If the taxpayer's combined income (total of adjusted gross income, interest on tax-exempt bonds, and 50% of Social Security benefits and Tier I Railroad Retirement Benefits) exceeds a threshold amount ($25,000 for an individual, $32,000 for a married couple filing a joint return, and zero for a married person filing separately), the amount of benefits subject to income tax is the lesser of 50% of benefits or 50% of the excess of the taxpayer's combined income over the threshold amount. The additional income tax revenues resulting from this provision are transferred to the trust funds from which the corresponding benefits were paid. Effective for taxable years beginning after 1983.