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As I do my daily social media surfing I am finding a disturbing trend- anti tax sentiment and one group or another thinking they should be exempt from taxes. We Americans are not among the highest taxed countries and despite the rhetoric, the wealthy do pay the great bulk of taxes.
Seniors seem to be the most vocal looking for tax exemption. Many feel they should be exempt from property taxes and of course, paying taxes on Social Security benefits. I am not referring to seniors living in or near poverty.
I find the calls to exempt seniors from property taxes most disturbing and illogical. Especially as property taxes are the primary source of school funding.
Income taxes on Social Security benefits contribute $50 billion a year to the SS trust and $35 billion to Medicare Part A trust.
To me, looking to avoid taxes without considering what they provide is like saying a family living on credit cards should not have to pay the bill at the end of the month because they earned or deserve what they purchased.
“Earned” and “deserve” are frequently used in posts. Living on a fixed income and inflation are common themes.
Exempting one group of citizens from taxes simply shifts more to another group. Frankly, I don’t think seniors deserve more consideration than a young working family trying to build their future.
Besides, no group of citizens (often without regard to income) receives more benefits, more special treatment, more discounts than seniors. Possibly as a result of a general erroneous mindset that seniors as a group are poor.
Preparing for retirement, a life-long process in my view, includes preparing for taxes of all kinds. The pages of HD are full of discussion on the subject. We all use the tax code to minimize our taxes, but we pay what is necessary – to provide vital services, to have good schools and to assist those in need. That how a good society works. Being fortunate by getting old does not exempt us from that responsibility IMO.
We seniors had a lifetime to prepare for living in old age, without a paycheck. If a person had modest earnings their working life, chances are that will not change in retirement, nor is it a surprise. We knew our income might not grow, we knew inflation was real, we knew we would owe taxes and should have known some would increase.
Sorry, it’s everyone in the pool in my book – while providing necessary assistance to those truly in need.
I agree 100% on the property taxes, but want to qualify the Social Security income tax: It should be steeply progressive, with people at the bottom-end paying little or nothing, and the wealthy getting hit much harder. Maybe an SS surtax on the rich guys.
Incidentally, the program is so mismanaged that I’m less moved by “Income taxes on Social Security benefits contribute $50 billion a year to the SS trust and $35 billion to Medicare Part A trust.”
The SS “trust” – Ha!, that’s a good one. <rolleyes> It’s strictly pay-go these days, guys and gals.
First, I should mention that I would be a big beneficiary if the tax on Social Security were eliminated. My 2024 income taxes, totaling a little under $9,000, would have been less than $4,000 if SS benefits hadn’t been taxed. It should also be noted that the limits in the complicated formula for the tax haven’t been changed since the tax was first implemented in 1984 and inflation has totaled about 300% in the 40 years since then.
However, I don’t think that eliminating it would be a good tax policy because it would be highly regressive. Lower income people pay little or no tax on their SS so the lion’s share of the benefit would go to those in higher income tax brackets.
Making a portion- the portion not funded by retirees – taxable income was a move to build up the SS trust. The income levels were not indexed so that the revenue would increase over time.
I agree, making it all tax free is regressive.
Actually, on the assumption that the 85% taxable level is accurate, I think everyone should have 85% of their benefit considered taxable income and then let the tax code determine if there are any taxes actually to be paid.