Presidential candidate Donald Trump has promised seniors that he will eliminate taxes on Social Security, which is part of the revenue pool used to make monthly payments to beneficiaries.
The Social Security Administration (SSA) is responsible for making monthly payments to each of the beneficiaries of the Social Security programs and to senior citizens who are retirees.
In addition, the institution offers Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI) programs for retirees and individuals.
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Social Security and its beneficiaries
Most payments are funded by income taxes that beneficiaries and active workers pay to Social Security.
This recent promise by Trump is a campaign commitment prior to the general elections that will take place in November.
Consequences of Trump’s proposal
But implementing such a proposal in the future could backfire on Social Security beneficiaries.
According to the U.S. Government Accountability Office, most seniors enter retirement with no savings, while nearly 40 percent of retired workers pay federal income taxes on their benefits.
This means that paying taxes is one of the main sources of funding for Social Security and retirement programs in the US.
Experts
If the tax payment were eliminated, the SSA would be left without trust funds, which would accelerate its insolvency.
Security Worker President Nancy Altman explained in an interview with CBS Money Watch that Trump’s advocacy of defunding the SSA is similar to a game of giving with one hand and taking with the other.
The Social Security Board of Trustees has been dealing with the insolvency of trust funds for some time now.
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OASI estimates
The Old-Age and Survivors Insurance Trust Fund (OASI) has estimated that it will be able to continue paying 100% of the scheduled benefits until 2033.
After this date, program revenues will be sufficient to pay only 79% of benefits and not the full payments under its various programs.
With information from the newspaper AS USA
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2024-08-10 18:52:29
