H.R.2909 - You Earned It, You Keep It Act (119th Congress)
Summary
H.R.2909, the "You Earned It, You Keep It Act," proposes significant changes to the taxation of Social Security benefits and the calculation of Social Security contributions. The bill aims to repeal the inclusion of Social Security benefits in gross income, offering tax relief to recipients. To offset the revenue loss, it also adjusts the wage base subject to Social Security taxes, potentially increasing taxes on higher earners.
Expected Effects
If enacted, this bill would reduce the tax burden on Social Security recipients, particularly those with lower incomes. Simultaneously, it would increase Social Security taxes for high-income earners by removing or adjusting the contribution and benefit base limits. The bill also includes provisions to ensure the solvency of Social Security trust funds.
Potential Benefits
- Reduced tax burden for Social Security recipients, increasing their disposable income.
- Increased fairness in the Social Security system by taxing higher earners on a larger portion of their income.
- Enhanced solvency of Social Security trust funds through increased contributions.
- Simplification of the tax code by eliminating the complex calculation of taxable Social Security benefits.
- Potential stimulus to the economy as Social Security recipients have more money to spend.
Most Benefited Areas:
Potential Disadvantages
- Increased tax burden on high-income earners, potentially discouraging investment and economic activity.
- Complexity in payroll administration due to changes in wage base calculations.
- Potential for unintended consequences in the long-term solvency of Social Security if economic projections are inaccurate.
- Possible political opposition due to the redistribution of tax burdens.
- The increase in the national average wage index could lead to higher payments, further straining the system.
Constitutional Alignment
The bill's provisions related to taxation fall under the purview of Congress's power to lay and collect taxes, as outlined in Article I, Section 8 of the Constitution. The changes to Social Security also relate to the general welfare clause, allowing Congress to provide for the common good. The bill does not appear to infringe upon any specific constitutional rights or protections.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).