Trump recently made a campaign promise to stop taxing Social Security benefits. Sounds great for retirees, right? It’s a scam.
Years ago, Congress enacted this tax to save Social Security. Currently, it raises about $94 billion a year for the Social Security and Medicare trust funds. Losing this revenue would necessitate cutting benefits sooner than otherwise.
Who would benefit from this tax cut? The well-off retirees who pay it. Low-income retirees don’t pay this tax, and would suffer benefit cuts. That’s about half of all beneficiaries. It takes money from them and gives it to wealthy retirees
There may be an even more nefarious purpose to this scheme. Republicans have never liked Social Security. Cutting off this revenue could hasten its demise.
Democrats know all of this, of course, and will oppose this scheme. So will unions and senior advocacy groups. Republicans can’t enact it unless they win the White House and control of Congress. That’s something for senior citizens who depend on Social Security and Medicare to think about when they vote.
How important is Social Security? For two-thirds of Americans over age 65, it’s at least 50% of their income. For a third, it’s at least 90%. Ending Social Security, or even cutting benefits, would be devastating. And it wouldn’t just affect them; their children would have to support them.
Social Security is not only the most successful anti-poverty program in history, it also helps prevent economic collapses. The monthly Social Security checks get spent immediately, and because this income doesn’t depend on the business cycle, this money keeps flowing into the economy and helps keep businesses afloat when other consumer spending is weak.
In other words, Social Security benefits everyone, not just those receiving benefits. It’s popular with voters, so those who want to destroy the program can’t attack it directly. George W. Bush tried to privatize it; Trump’s game is to deprive it of a vital source of revenue. Don’t fall for his scam.