We should all write to our members of Congress and demand tax reforms

[barrett]

A caller into C-Span's Washington Journal just gave me more information. He is a CPA. He asserted these facts, which sound true to me.

The top 1% pay 90% of the taxes. Half of the bottom 50% pay no taxes.

The rich are already paying their fair share with many on the other end NOT!

Those numbers are not correct, Vinnie. Here is the Steve Ballmer video link again that I posted earlier:

https://www.youtube.com/watch?v=aQoh9jdRZPM&t=415s

Start that at the 10:18 mark. Top 5% of workers pay 66% of income tax collected. Top 10% pay 76%. Bottom 50% of earners pay 2.3%. Yes, we have a progressive tax system but let's get the numbers right.

Ballmer's source for all of these videos is the US Government.

[yankees60]

A caller into C-Span's Washington Journal just gave me more information. He is a CPA. He asserted these facts, which sound true to me.

The top 1% pay 90% of the taxes. Half of the bottom 50% pay no taxes.

The rich are already paying their fair share with many on the other end NOT!

Those numbers are not correct, Vinnie. Here is the Steve Ballmer video link again that I posted earlier:

https://www.youtube.com/watch?v=aQoh9jdRZPM&t=415s

Start that at the 10:18 mark. Top 5% of workers pay 66% of income tax collected. Top 10% pay 76%. Bottom 50% of earners pay 2.3%. Yes, we have a progressive tax system but let's get the numbers right.

Ballmer's source for all of these videos is the US Government.

There seem to be dueling information sources for this:

https://taxfoundation.org/blog/top-1-pe ... 0-percent/

The Top 1 Percent Pays More in Taxes than the Bottom 90 Percent
January 7, 20142 min read
By: Andrew Lundeen

https://taxfoundation.org/data/all/fede ... data-2024/
The average income tax rate in 2021 was 14.9 percent. The top 1 percent of taxpayers paid a 25.9 percent average rate, nearly eight times higher than the 3.3 percent average rate paid by the bottom half of taxpayers.
The top 1 percent’s income share rose from 22.2 percent in 2020 to 26.3 percent in 2021 and its share of federal income taxes paid rose from 42.3 percent to 45.8 percent.
The top 50 percent of all taxpayers paid 97.7 percent of all federal individual income taxes, while the bottom 50 percent paid the remaining 2.3 percent.

[Xan]

It's also important to note what counts as "taxes". When the phrase "federal income tax" is used, it typically means that Social Security and Medicare are NOT being counted as taxes.

There's an argument for this, since paying into those systems in theory leads to later payouts, and it isn't the same as being truly taxed. But in terms of what comes out of your paycheck it's still very much a tax, and one that is paid by the lower earners at a higher rate than the higher earners.

[yankees60]

It's also important to note what counts as "taxes". When the phrase "federal income tax" is used, it typically means that Social Security and Medicare are NOT being counted as taxes.

There's an argument for this, since paying into those systems in theory leads to later payouts, and it isn't the same as being truly taxed. But in terms of what comes out of your paycheck it's still very much a tax, and one that is paid by the lower earners at a higher rate than the higher earners.

I was going to bring up exactly what you have in your first paragraph. So, thanks for doing so what I did not remember to do.

Also, agree with the 1st sentence of your 2nd paragraph.

However, in regards to the second sentence?

There are caps on the Social Security portion of the tax once you earn a certain amount. This is a combined 12.4%, employee/ employer. However, the Medicare portion (combined 2.9%) goes on forever. Plus, high earners / income are subject to additional taxes that I believe also fund Medicare. I cannot tell you more than that because I've never experienced it in filling out anyone's tax return.

On the other hand, the lower income get a much better deal on the actual Social Security payments than the higher income as there is a maximum Social Security payment, which means the lower income end up getting a higher ratio of payouts compared to amounts paid in.

[glennds]

Also you're glossing over a nasty part of taxation: let's say you're right and the final sales price doesn't increase, but some percentage of manufacturers go out of business instead. Is that a win for society? I would argue it isn't.

In the real world you'll get some of both: higher prices and fewer businesses. Both are costs borne by the general public.

Half of the amount that's currently taken by corporate taxation would go to reduced prices for the consumer? Wouldn't that be absolutely huge?

We can then have a healthy, honest debate about what the personal tax rate should be of "corporate owners". If you want to go after that income, then go for it, where it belongs on their personal taxes. Think of the reduction in wasted manhours that are currently spent preparing, auditing, and otherwise dealing with corporate tax returns!

Coming back to this.

You are strictly speaking about C corporations.

There are also Sub S corporations which are taxed like a partnership. No taxation at the entity level. All tax income is passed on to the corporate owners to be taxed as part of their taxable income.

I just checked the requirements to be an S corporation:

"Before you elect your C-corporation to an S-corporation, they company must meet certain eligibility criteria. First, you corporation must have fewer than 100 shareholders. Next, your C-corporation cannot have more than one class of stock. Finally, all shareholders must be U.S. citizens or residents and not other legal entities. If you company meets all these criteria, you can submit form 2553 with the IRS."

A corporation with 100 shareholders can be a fairly large corporation.

I'm sure we have situations wherein there are C corporations and S corporations engaging in the same activities.

Your arguments would be saying that the S corporation would be charging lower prices to their customers than their fellow C corporations because they don't have to pay any taxes on the entity level.

I would bet that they are charging their customers the exact same prices that the C corporations are, with the consequent better profits.

Banks don't like that credit unions don't pay taxes, contending that it gives them a completive advantage. Again, by your assertion credit unions should have lower fees than banks for the same services. Is this the case? I don't know because though I have many accounts with each I pay no fees to any of them. But when I look at my credit unions' pages of fees ... they don't look that inexpensive to me.

You're pointing out that there are two different types of corporation, one that's double-taxed and one that isn't, because... of reasons. And this unfair situation is your argument to keep the double taxation?

The different tax treatment of a C corporation and a Subchapter S corporation is not necessarily unfair. There are pros and cons to both structures. It is not as simple as double taxed = bad and not double taxed = good.

A C corp of a material size will have access to the capital of the public equity markets which will not be the case for a Sub S due to shareholder constraints. The public markets necessitate a SEC, FTC and other regulatory agencies to prevent the fraud and rigging we had in the markets before those agencies came about. It seems reasonable that C corps should pay taxes to cover those functions.

Another consideration that has not been specifically discussed here is the difference in tax treatment of income in a pass through single tax entity versus a C corp. In a pass through entity, income is recognized at the shareholder level whether it has been distributed or not.
In a C corp, the shareholder only recognizes income when it is distributed, in the form of dividends or other distributions. This allows the C corp to retain earnings for growth without tax consequences to its shareholders.
In a Sub S corp (or a limited partnership or an LLC), if earnings are retained for growth, the shareholders will owe taxes on the undistributed income, a circumstance sometimes called phantom income. No shareholder likes paying taxes on income recognized but not received.

So if we did away with corporate taxes entirely, would we now tax shareholders in a C corp on their allocated share of income not distributed? Or in your zero tax scenario, would the C corp have the ability to accumulate an unlimited amount of income without paying out dividends in which case nobody is paying the tax on the income?

Pass through entities came about to make it less burdensome on small businesses where the features of a C corp were not advantageous.

As to pricing, there is a simplistic case that could be made that reducing costs like taxes could result in lower prices. I tend to think that argument applies more to operating costs than to costs like interest or taxes. This is because most companies are making their pricing decisions (in part) based on operating margin, which does not consider taxes.
I would bet consumers would get better prices through free market competition and operating efficiencies than from corporate tax policy. For example, Amazon and Wal-Mart have used scale and technology very effectively.
Tariffs might be a different story though, because they are part of the acquisition cost of imported goods thus a true COGS. So I could imagine tariffs to be a form of tax that would raise prices to consumers.

To your other question about why not super high corporate taxes (50%, 90%, 100%), there is a problem that arises when corporate taxes are too high relative to other countries, and that is the phenomenon of corporate inversions where companies seek to change jurisdiction for tax purposes, either outright, or through merger with a foreign company. The Trump corporate tax cuts of 2017 had a sound objective in that they were trying to reduce the inversion incentive and retain business in the U.S. by right sizing the flat rate to be competitive with other countries.

Other than the reduction in the inversion incentive, the place where reduced corporate taxes will have an effect will not be reduced consumer prices, it will be increased stock prices. This is because EPS is calculated after taxes, so a corporate tax cut will create an immediate EPS pick-up, all other factors being the same. So the beneficiaries will be stockholders, not the general public.

[yankees60]

Also you're glossing over a nasty part of taxation: let's say you're right and the final sales price doesn't increase, but some percentage of manufacturers go out of business instead. Is that a win for society? I would argue it isn't.

In the real world you'll get some of both: higher prices and fewer businesses. Both are costs borne by the general public.

Half of the amount that's currently taken by corporate taxation would go to reduced prices for the consumer? Wouldn't that be absolutely huge?

We can then have a healthy, honest debate about what the personal tax rate should be of "corporate owners". If you want to go after that income, then go for it, where it belongs on their personal taxes. Think of the reduction in wasted manhours that are currently spent preparing, auditing, and otherwise dealing with corporate tax returns!

Coming back to this.

You are strictly speaking about C corporations.

There are also Sub S corporations which are taxed like a partnership. No taxation at the entity level. All tax income is passed on to the corporate owners to be taxed as part of their taxable income.

I just checked the requirements to be an S corporation:

"Before you elect your C-corporation to an S-corporation, they company must meet certain eligibility criteria. First, you corporation must have fewer than 100 shareholders. Next, your C-corporation cannot have more than one class of stock. Finally, all shareholders must be U.S. citizens or residents and not other legal entities. If you company meets all these criteria, you can submit form 2553 with the IRS."

A corporation with 100 shareholders can be a fairly large corporation.

I'm sure we have situations wherein there are C corporations and S corporations engaging in the same activities.

Your arguments would be saying that the S corporation would be charging lower prices to their customers than their fellow C corporations because they don't have to pay any taxes on the entity level.

I would bet that they are charging their customers the exact same prices that the C corporations are, with the consequent better profits.

Banks don't like that credit unions don't pay taxes, contending that it gives them a completive advantage. Again, by your assertion credit unions should have lower fees than banks for the same services. Is this the case? I don't know because though I have many accounts with each I pay no fees to any of them. But when I look at my credit unions' pages of fees ... they don't look that inexpensive to me.

You're pointing out that there are two different types of corporation, one that's double-taxed and one that isn't, because... of reasons. And this unfair situation is your argument to keep the double taxation?

The different tax treatment of a C corporation and a Subchapter S corporation is not necessarily unfair. There are pros and cons to both structures. It is not as simple as double taxed = bad and not double taxed = good.

A C corp of a material size will have access to the capital of the public equity markets which will not be the case for a Sub S due to shareholder constraints. The public markets necessitate a SEC, FTC and other regulatory agencies to prevent the fraud and rigging we had in the markets before those agencies came about. It seems reasonable that C corps should pay taxes to cover those functions.

Another consideration that has not been specifically discussed here is the difference in tax treatment of income in a pass through single tax entity versus a C corp. In a pass through entity, income is recognized at the shareholder level whether it has been distributed or not.
In a C corp, the shareholder only recognizes income when it is distributed, in the form of dividends or other distributions. This allows the C corp to retain earnings for growth without tax consequences to its shareholders.
In a Sub S corp (or a limited partnership or an LLC), if earnings are retained for growth, the shareholders will owe taxes on the undistributed income, a circumstance sometimes called phantom income. No shareholder likes paying taxes on income recognized but not received.

So if we did away with corporate taxes entirely, would we now tax shareholders in a C corp on their allocated share of income not distributed? Or in your zero tax scenario, would the C corp have the ability to accumulate an unlimited amount of income without paying out dividends in which case nobody is paying the tax on the income?

Pass through entities came about to make it less burdensome on small businesses where the features of a C corp were not advantageous.

As to pricing, there is a simplistic case that could be made that reducing costs like taxes could result in lower prices. I tend to think that argument applies more to operating costs than to costs like interest or taxes. This is because most companies are making their pricing decisions (in part) based on operating margin, which does not consider taxes.
I would bet consumers would get better prices through free market competition and operating efficiencies than from corporate tax policy. For example, Amazon and Wal-Mart have used scale and technology very effectively.
Tariffs might be a different story though, because they are part of the acquisition cost of imported goods thus a true COGS. So I could imagine tariffs to be a form of tax that would raise prices to consumers.

To your other question about why not super high corporate taxes (50%, 90%, 100%), there is a problem that arises when corporate taxes are too high relative to other countries, and that is the phenomenon of corporate inversions where companies seek to change jurisdiction for tax purposes, either outright, or through merger with a foreign company. The Trump corporate tax cuts of 2017 had a sound objective in that they were trying to reduce the inversion incentive and retain business in the U.S. by right sizing the flat rate to be competitive with other countries.

Other than the reduction in the inversion incentive, the place where reduced corporate taxes will have an effect will not be reduced consumer prices, it will be increased stock prices. This is because EPS is calculated after taxes, so a corporate tax cut will create an immediate EPS pick-up, all other factors being the same. So the beneficiaries will be stockholders, not the general public.

Thanks for this follow up to what I'd written. You hit on all I'd left out and went into far more depth than I had.

[sophie]

Very interesting thread guys! (I do check the forum now and then....)

I have my own idea about the income tax: it needs to be retired in favor of tariffs +/- a national sales tax. Tariffs are how the federal government was funded before the income tax was introduced. And at the time the income tax was only supposed to be for a wealthy few. Now it's turned into a monster that desperately needs to be shot. Just think of the costs of all the record keeping and filing requirements, to say nothing of the stress of worrying about audits.

To get us there, start introducing tariffs while at the same time start increasing the standard deduction. Double it for starters. As the SD increases, more and more people will be relieved of the burden of filing taxes, and the IRS can focus on the high income folks. Those who still have to file probably won't be itemizing deductions, so their returns will automatically simplify.

I'm very much in favor of eliminating the tax on Social Security, for the simple reason that the conversion of COLAS to use chained CPI has resulted in SS not keeping up with inflation. It's no longer enough to live on and that will only get worse. If you have Medigap insurance, the SS increase this year was more than completely swallowed up by Medicare, Medigap, and Part D premium increases. I'm also in favor of automatically excluding anyone in long term care (whether at home or in a facility) from paying taxes, no matter their income.

Also here's my argument in favor of not taxing tips: Wage income is deductible by the business paying the wages, so they are only taxed once (to the individual receiving the wages). Tips however are taxed twice because the money you use to pay tips is after-tax. So either you should get the deduction or the person getting the tips should.

[Mountaineer]

Sophie for President! MAGA to the extreme.

[sophie]

OK I'm curious. What was "MAGA" or "far-right" about anything in my post? (I took care to keep political partisanship out of it, in fact.)

[boglerdude]

Everyone has their own definition, its a war of language. But "protectionist" tariffs and lower taxes has overlap with MAGA. Taxes on tips would not generate a lot income, especially after compliance/enforcement costs.

[Mountaineer]

OK I'm curious. What was "MAGA" or "far-right" about anything in my post? (I took care to keep political partisanship out of it, in fact.)

Nothing far right to me. I just took MAGA as short hand for 'make America great again', at which your thoughts seemed to be aimed, at least to me.

[yankees60]

OK I'm curious. What was "MAGA" or "far-right" about anything in my post? (I took care to keep political partisanship out of it, in fact.)

Nothing far right to me. I just took MAGA as short hand for 'make America great again', at which your thoughts seemed to be aimed, at least to me.

If you do believe in the phrase .... 'make America great again' ... are you able to define as I've not seen any of the phrase's advocates definitively define ..... what is the range of years when America was great? Since this phrase arose around 2015 then it'd have to be some time period prior to then.

[flyingpylon]

If you do believe in the phrase .... 'make America great again' ... are you able to define as I've not seen any of the phrase's advocates definitively define ..... what is the range of years when America was great? Since this phrase arose around 2015 then it'd have to be some time period prior to then.

Great in a general sense, in the context of modern times. Not the same as a specific time in the past. Don’t overthink it.

[yankees60]

If you do believe in the phrase .... 'make America great again' ... are you able to define as I've not seen any of the phrase's advocates definitively define ..... what is the range of years when America was great? Since this phrase arose around 2015 then it'd have to be some time period prior to then.

Great in a general sense, in the context of modern times. Not the same as a specific time in the past. Don’t overthink it.

I am not overthinking. Proclaiming "Make America Great Again" is clearly saying that presently it is not and that there was this time period when it was.

Why is no one able to define that time period?

If anyone cannot then it's a typical empty political phrase just to appeal to the emotions and not to the intellect.

[boglerdude]

Rewatch Crocodile Dundee and compare it to Australia in 2020. With "toxically" masculine Trump the pendulum is swinging back a bit.

Also most of the MAGA crowd want jobs reshored.

[flyingpylon]

If you do believe in the phrase .... 'make America great again' ... are you able to define as I've not seen any of the phrase's advocates definitively define ..... what is the range of years when America was great? Since this phrase arose around 2015 then it'd have to be some time period prior to then.

Great in a general sense, in the context of modern times. Not the same as a specific time in the past. Don’t overthink it.

I am not overthinking. Proclaiming "Make America Great Again" is clearly saying that presently it is not and that there was this time period when it was.

Why is no one able to define that time period?

If anyone cannot then it's a typical empty political phrase just to appeal to the emotions and not to the intellect.

It’s a political slogan so of course it’s meant to appeal to emotion. That’s why I said don’t overthink it.

[Mountaineer]

MACA (Make America crappy again!) Is this better for you Vinny?

[ochotona]

Gulf of America = GOA. I think I found a video all about it. Is GMC going to rebrand the vehicle The McKinley?

https://www.youtube.com/watch?v=bSbXDVaVf6M

[yankees60]

If you do believe in the phrase .... 'make America great again' ... are you able to define as I've not seen any of the phrase's advocates definitively define ..... what is the range of years when America was great? Since this phrase arose around 2015 then it'd have to be some time period prior to then.

Great in a general sense, in the context of modern times. Not the same as a specific time in the past. Don’t overthink it.

I am not overthinking. Proclaiming "Make America Great Again" is clearly saying that presently it is not and that there was this time period when it was.

Why is no one able to define that time period?

If anyone cannot then it's a typical empty political phrase just to appeal to the emotions and not to the intellect.

It’s a political slogan so of course it’s meant to appeal to emotion. That’s why I said don’t overthink it.

Okay. Then you are agreeing with me that it is not to be taken literally and, therefore, essentially means nothing?

[yankees60]

MACA (Make America crappy again!) Is this better for you Vinny?

We should all be for MAB - Make America Better.

I don't think anyone of any political belief disagrees with that one?

Of course, there will be intense disagreement on what makes America better.

What one thinks is making America better the other thinks it is making it worse.

[glennds]

I am not overthinking. Proclaiming "Make America Great Again" is clearly saying that presently it is not and that there was this time period when it was.

Why is no one able to define that time period?

If anyone cannot then it's a typical empty political phrase just to appeal to the emotions and not to the intellect.

I don't think there is a specific time period people have in mind Vinny.
Donald Trump has been a celebrity and public figure for most of his adult life. For as long as I can remember, even back to the early 80's, he has claimed the country is going down the tubes. I haven't heard him reference a specific benchmark for what defines "great" in US history but I doubt it is any period during his lifetime.

The bigger mystery to me is why so many people are inclined to believe things are quite so dismal. At the moment, the US economy is the envy of the world. Pick your objective marker be it poverty, literacy, mortality, basic infrastructure, access to information, or whatever. The past 100 years has seen stunning improvement with few exceptions. Not to say we don't have lots of room for improvement and lots of problems to resolve, but by comparison, trend and indicator, we're farther from the verge of collapse than "Make America Great Again" would suggest.

[yankees60]

I am not overthinking. Proclaiming "Make America Great Again" is clearly saying that presently it is not and that there was this time period when it was.

Why is no one able to define that time period?

If anyone cannot then it's a typical empty political phrase just to appeal to the emotions and not to the intellect.

I don't think there is a specific time period people have in mind Vinny.
Donald Trump has been a celebrity and public figure for most of his adult life. For as long as I can remember, even back to the early 80's, he has claimed the country is going down the tubes. I haven't heard him reference a specific benchmark for what defines "great" in US history but I doubt it is any period during his lifetime.

The bigger mystery to me is why so many people are inclined to believe things are quite so dismal. At the moment, the US economy is the envy of the world. Pick your objective marker be it poverty, literacy, mortality, basic infrastructure, access to information, or whatever. The past 100 years has seen stunning improvement with few exceptions. Not so say we don't have lots of room for improvement and lots of problems to resolve, but by comparison, trend and indicator, we're farther from the verge of collapse than "Make America Great Again" would suggest.

Am interested in reading here objective refutations to your concluding paragraph.

[Mountaineer]

I am not overthinking. Proclaiming "Make America Great Again" is clearly saying that presently it is not and that there was this time period when it was.

Why is no one able to define that time period?

If anyone cannot then it's a typical empty political phrase just to appeal to the emotions and not to the intellect.

I don't think there is a specific time period people have in mind Vinny.
Donald Trump has been a celebrity and public figure for most of his adult life. For as long as I can remember, even back to the early 80's, he has claimed the country is going down the tubes. I haven't heard him reference a specific benchmark for what defines "great" in US history but I doubt it is any period during his lifetime.

The bigger mystery to me is why so many people are inclined to believe things are quite so dismal. At the moment, the US economy is the envy of the world. Pick your objective marker be it poverty, literacy, mortality, basic infrastructure, access to information, or whatever. The past 100 years has seen stunning improvement with few exceptions. Not so say we don't have lots of room for improvement and lots of problems to resolve, but by comparison, trend and indicator, we're farther from the verge of collapse than "Make America Great Again" would suggest.

Am interested in reading here objective refutations to your concluding paragraph.

Read up on the Chicago school system and the students’ capabilities. One small example of something in America that could be better. I expect there are hundreds, if not thousands, of small examples like this at the local level. That’s why the slogan MAGA resonated with so many people, probably all thinking about something in their lives that could be better. My two cents.

[yankees60]

I am not overthinking. Proclaiming "Make America Great Again" is clearly saying that presently it is not and that there was this time period when it was.

Why is no one able to define that time period?

If anyone cannot then it's a typical empty political phrase just to appeal to the emotions and not to the intellect.

I don't think there is a specific time period people have in mind Vinny.
Donald Trump has been a celebrity and public figure for most of his adult life. For as long as I can remember, even back to the early 80's, he has claimed the country is going down the tubes. I haven't heard him reference a specific benchmark for what defines "great" in US history but I doubt it is any period during his lifetime.

The bigger mystery to me is why so many people are inclined to believe things are quite so dismal. At the moment, the US economy is the envy of the world. Pick your objective marker be it poverty, literacy, mortality, basic infrastructure, access to information, or whatever. The past 100 years has seen stunning improvement with few exceptions. Not so say we don't have lots of room for improvement and lots of problems to resolve, but by comparison, trend and indicator, we're farther from the verge of collapse than "Make America Great Again" would suggest.

Am interested in reading here objective refutations to your concluding paragraph.

Read up on the Chicago school system and the students’ capabilities. One small example of something in America that could be better. I expect there are hundreds, if not thousands, of small examples like this at the local level. That’s why the slogan MAGA resonated with so many people, probably all thinking about something in their lives that could be better. My two cents.

How about all the things that were worse in those same undefined time periods?

It again comes down to a skewed, unrealistic worldview.

Finally, it's not "could be better" but as good as they once were.

For me it represents the worldview of someone who all they know is what they see on the news, leading them to think the news represents reality / norms. Instead, in reality, the news represents the out of the ordinary and far from the norm.

[ochotona]

Washington, D.C.- Representative Thomas Massie (R-KY) announces reintroduction of the Senior Citizens Tax Elimination Act, H.R. 1040. This bill assists middle-class seniors by eliminating the unjust double tax on Social Security benefits.

As the Congressional Research Service reports, "Before 1984, Social Security benefits were exempt from the federal income tax. Congress then enacted legislation to tax a portion of those benefits, with the share gradually increasing as a person's income rose above a specified income threshold."

"Although seniors have already paid tax on their Social Security contributions via the payroll tax, they are still required to list these benefits as taxable income on their tax returns," said Rep. Massie. "This is simply a way for Congress to obtain more revenue for the federal government at the expense of seniors who have already paid into Social Security. My bill would exempt Social Security retirement benefits from taxation and boost the retirement income of millions of older Americans."

Representative Daniel Webster (R-FL), a co-sponsor of the legislation, said, "For decades, seniors have paid into Social Security with their tax dollars. Now, when many seniors are on a fixed income and struggling financially, they are being double-taxed because of income taxes on their Social Security benefits. This is wrong and I’m pleased to once again co-sponsor this legislation to repeal this tax."

Andy Mangione, Senior Vice President of the Association of Mature American Citizens Action, released the following statement in support of Massie's legislation:

"Every year, millions of seniors become eligible for either Social Security or tier I railroad retirement benefits. After working for decades, paying taxes on their hard-earned income to fund these federal programs, some seniors are forced to pay income tax on the benefits they receive from the federal government. Taxing benefits which were created from already taxed funds is nonsensical and curtails retirement benefits seniors have been promised. Seniors deserve to reap the full benefits of their hard work from career-long contributions to Social Security and the Railroad Retirement Plan.

The Senior Citizens Tax Elimination Act will amend the Internal Revenue Code of 1986 to terminate the inclusion of tier I railroad retirement benefits and Social Security benefits in an individual’s gross income. As this legislation takes effect, seniors will notice their tax liability is significantly reduced and will no longer deal with the 'double tax' on their federally earned benefits."

The Senior Citizens Tax Elimination Act was originally introduced in 2003 by Representative Ron Paul (R-TX). Rep. Massie has introduced this bill each Congress since taking office in 2012.

Original cosponsors include Rep. Andy Biggs (R-AZ), Rep. Lauren Boebert (R-CO), Rep. Tim Burchett (R-TN), Rep. Eric Burlison (R-MO), Rep. Ben Cline (R-VA), Rep. Michael Cloud (R-TX), Rep. Monica De La Cruz (R-TX), Rep. Brad Finstad (R-MN), Rep. Lance Gooden (R-TX), Rep. Paul Gosar (R-AZ), Rep. Mark Green (R-TN), Rep. Marjorie Taylor Greene (R-GA), Rep. Harriet Hageman (R-WY), Rep. Andy Harris (R-MD), Rep. Diana Harshbarger (R-TN), Rep. Anna Paulina Luna (R-FL), Rep. Cory Mills (R-FL), Rep. Barry Moore (R-AL), Rep. Ralph Norman (R-SC), Rep. Andy Ogles (R-TN), Rep. Scott Perry (R-PA), Rep. Chip Roy (R-TX), Rep. Martin Stutzman (R-IN), Rep. Tom Tiffany (R-WI), Rep. Jeff Van Drew (R-NJ), Rep. Derrick Van Orden (R-WI), Rep. Randy Weber (R-TX), Rep. Daniel Webster (R-FL), and Rep. Tony Wied (R-WI).

The text of H.R. 1040 is available at this embedded link.