Senator introduces bill to eliminate taxes on Social Security benefits

[BumRushDaShow]

21. I usually try to include it in the OP comments if it is there at post time, but here a part of Gallego's press release

Gallego Introduces Legislation to Actually Eliminate Taxes on Social Security

Bill comes as Trump and Republicans in Congress continue to falsely claim their tax bill eliminated taxes on Social Security benefits

WASHINGTON – Senator Ruben Gallego (D-AZ) introduced the You Earn It, You Keep It Act to eliminate federal taxes on Social Security benefits, without impacting the Social Security Trust Fund.

“Like a lot of Americans, I’ve been paying into Social Security since my first job at fourteen. But despite decades of paying into the system, seniors are still forced to pay taxes on their hard-earned benefits – all while the ultra-wealthy barley pay into the system at all,” said Senator Gallego. “Trump claimed he ended taxes on Social Security. My bill actually does it. Permanently.”

READ MORE: Senator introduces new bill to eliminate taxes on Social Security benefits (CNBC)

The You Earn It, You Keep It Act would eliminate federal taxes on Social Security. By expanding the Social Security pay-roll tax to covered earnings above $250,000 a year, the bill ensures high-earners pay their fair share and allows the Social Security Administration to continue making all payments on time and in full through 2058 – 24 years longer than the current projection of 2034.

(snip)

Link to draft bill (PDF) - https://www.gallego.senate.gov/wp-content/uploads/2025/09/You-Earned-It-You-Keep-It.pdf

The current cap (for 2025) is $176,100.

I was quickly scanning the draft bill and saw this part -

(snip)

SEC. 4. INCLUDING EARNINGS OVER $250,000 IN SOCIAL SE-4
CURITY BENEFIT FORMULA.5

(a) INCLUSION OF EARNINGS OVER $250,000 IN DE-
TERMINATION OF PRIMARY INSURANCE AMOUNTS.—Sec-
tion 215(a)(1)(A) of the Social Security Act (42 U.S.C. 415

(a)(1)(A)) is amended—

(1) in clause (ii), by striking ‘‘and’’ at the end;

(2) in clause (iii), by inserting ‘‘and’’ at the
end; and

(3) by inserting after clause (iii) the following:

‘‘(iv) 2 percent of the individual’s excess aver-
age indexed monthly earnings (as defined in sub-
section (b)(5)(A)).’’.

(snip)

It *looks like* there would either be an additional 2% payroll tax added on income "in excess of $250,000" (meaning 8.2% instead of 6.2%) for over $250,000 -OR- it means that the tax (on employee and employer) drops from 6.2% down to 2% for $250,000 and above, where even that is more than what someone with that income would be contributing anyway, since it already stops being taken out for anyone making more than $176,100 (2025).