Former President Donald Trump has proposed eliminating taxes on Social Security benefits for seniors. Trump reiterated this plan during a recent “Fox & Friends” appearance and at a press conference at Mar-a-Lago. However, experts warn that this proposal could accelerate the insolvency of Social Security and Medicare trust funds.
According to the Social Security Administration, nearly 40% of Americans who receive Social Security benefits already pay federal income tax. An analysis from the Committee for a Responsible Federal Budget stated that “Repealing the tax could increase the budget deficit significantly through 2035.” The Tax Foundation echoed similar concerns, describing the plan as “unsound and fiscally irresponsible.”
According to the Tax Foundation, Trump’s proposal could accelerate Social Security’s insolvency, including the disability program, by two years—from 2035 to 2033—and hasten Medicare’s insolvency from 2036 to 2030.
Trump campaign national press secretary Karoline Leavitt said, “President Trump delivered on his promise to protect Social Security and Medicare in his first term. He will continue to strongly protect Social Security and Medicare in his second term while eliminating taxes on Social Security for America’s well-deserving seniors.”
While the tax cut would primarily benefit higher earners, Howard Gleckman, a senior fellow at the Urban-Brookings Tax Policy Center, explained that it would offer a modest benefit to Social Security beneficiaries overall.
Social Security tax proposal concerns
“Nearly all of that benefit goes to high-income retirees who really don’t need it,” he said. A Tax Policy Center analysis released on Aug. 1 indicated that U.S. households could save significantly in 2025 from the tax break, but the distribution would be uneven.
Households with incomes between $32,000 and $60,000 might see an average tax break of only $90, and those with incomes of $32,000 or less would see no benefit. For Social Security beneficiaries, federal income tax is calculated based on “combined income,” which includes adjusted gross income, non-taxable interest, and half of Social Security benefits. With combined income between $25,000 and $34,000—or $32,000 and $44,000 for married couples filing jointly—up to 50% of Social Security benefits may be taxable.
If combined income exceeds these levels, up to 85% of benefits could be taxed. “The thresholds don’t adjust for inflation, so it’s hitting middle-income people who have Social Security benefits and probably a pension or 401(k),” Gleckman added.
