Social Security Act | Right Wing Granny

President Trump has suggested that he would like to remove the income tax on Social Security income. Let’s look at the history of taxing Social Security income.

The first time Social Security benefits were subject to federal income taxes was after the passage of the 1983 Amendments to the Social Security Act, starting in 1984. That law made 50 percent of Social Security benefits taxable for recipients with incomes above $25,000 for an individual and $32,000 for married couples filing jointly. To provide some perspective, $30,000 in 1984 would be approximately $91,000 today. The people supporting the new tax claimed that it would only tax the rich (a claim that is always made when taxes are increased–a claim that was made in 1913 when the personal income tax was introduced).

In 1993, more taxes were placed on Social Security income. A second tier of taxation was introduced under the Clinton administration. Using the same formula as above — i.e., MAGI plus one-half of benefits — single filers and couples filing jointly with more than $34,000 and $44,000, respectively, will be subjected to this second tier. This new tier allows up to 85% of Social Security benefits to be taxed at the federal ordinary income tax rate. The $44,000 in 1993 would be equal to about $96,000 in today’s dollars. These rates have never been adjusted for inflation, so the tax originally intended for ‘the rich’ impacts the middle class. Unfortunately, that is the way it always works.

Now, let’s look at how taxing Social Security has impacted the federal deficit.

In the first year Social Security was taxed, the federal deficit actually went down. After that, Congress simply concluded that they had more money to spend and spent it. When the second taxation of Social Security happened, it coincided with Newt Gingrich’s Contract With America–a tax plan that actually did lower the deficit for a number of years.

Taxing or not taxing Social Security is really NOT the issue. Until the government learns to spend less, the deficits will grow. The problem with asking the government to spend less is that in Washington, control of money equals power. The more money you control, the more powerful you are. It’s the spending–not the income. The only difference not taxing Social Security will make is to give senior citizens more spending power, which might in the long run help the economy.

One of the problems of getting older is aches and pains and loss of flexibility. Exercise helps with many of these issues, but aches and pains are simply part of getting older. Generally speaking, doctors will prescribe a cream or pill to dull the pain, and the patient will go home slightly improved. Many Americans have discovered that a chiropractor may actually have a better solution. After he adjusts everything and puts it back in place, my chiropractor uses cool lasers that promote healing and help relieve pain. That treatment has the advantage of being drug-free and has restored a lot of flexibility to me. However, Medicare covers very little of the treatment.

On April 19, 2021, Representative Brian Higgins, a Democrat Congressman from New York, sponsored HR 2654 in the U.S. House of Representatives. There are currently 79 co-sponsors of the bill.

The text of the bill states:

To amend title XVIII of the Social Security Act to provide Medicare coverage for all physicians’ services furnished by doctors of chiropractic within the scope of their license, and for other purposes.

I can understand why the pharmaceutical companies would not be big fans of this bill–people who regularly visit a chiropractor very rarely take pain killers.

The American Chiropractic Association notes:

The Chiropractic Medicare Coverage Modernization Act (H.R. 2654) would allow Medicare beneficiaries access to the chiropractic profession’s broad-based, non-drug approach to pain management, which includes manual manipulation of the spine and extremities, evaluation and management services, diagnostic imaging and utilization of other non-drug approaches that have become an important strategy in national efforts to stem the epidemic of prescription opioid overuse and abuse.

If we are truly serious about ending prescription opioid overuse and abuse, this would be a good place to start.