S.1109 - Social Security Check Tax Cut Act (119th Congress)
Summary
S.1109, the "Social Security Check Tax Cut Act," proposes a temporary reduction in the amount of Social Security and Tier 1 Railroad Retirement benefits included in gross income for tax years 2026 and 2027. The bill amends Section 86 of the Internal Revenue Code to allow for a phased-in reduction: 10% in 2026 and 20% in 2027. It also includes provisions to ensure that Social Security and Medicare trust funds are not negatively impacted by backfilling lost revenue from the general fund.
Expected Effects
If enacted, this bill would temporarily decrease the tax burden on Social Security and Tier 1 Railroad Retirement beneficiaries. This would result in slightly higher net incomes for recipients during the specified tax years. The Treasury would need to transfer funds to the Social Security and Medicare trust funds to offset the revenue reduction.
Potential Benefits
- Provides a temporary tax cut for Social Security and Tier 1 Railroad Retirement beneficiaries.
- Could stimulate the economy through increased spending by beneficiaries.
- Protects Social Security and Medicare trust funds by backfilling lost revenue.
- May provide modest financial relief to seniors and disabled individuals.
- Could be seen as a politically popular move, increasing approval for the involved legislators.
Potential Disadvantages
- The tax cut is temporary, potentially leading to confusion and frustration when it expires.
- Requires transfers from the general fund, potentially increasing the national debt or requiring cuts in other areas.
- May disproportionately benefit higher-income beneficiaries, as they are more likely to pay taxes on their benefits.
- The complexity of the tax code is increased with these temporary changes.
- Could be viewed as a short-term fix that does not address the long-term solvency of Social Security.
Most Disadvantaged Areas:
Constitutional Alignment
The bill appears to align with the general welfare clause of the Constitution (Preamble). Congress has the power to lay and collect taxes and provide for the general welfare of the United States. The bill also falls under Congress's power to regulate commerce and provide for social security, as established through precedent and broad interpretation of the Commerce Clause (Article I, Section 8). The appropriations to the trust funds are subject to congressional oversight and budgetary processes.
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).