Former President Donald Trump said he would change Social Security taxes for millions during an interview on Fox & Friends on Wednesday morning.
Social Security taxes currently apply to those with a combined income above $25,000. For those earning between $25,000 and $34,000, up to 50 percent of benefits are taxable. For those making more than $34,000, up to 85 percent of benefits may be taxable. The income limit varies by filing status.
During the interview, the Republican presidential nominee said he would change the federal rules for seniors, who often struggle to make ends meet on their fixed incomes.
“We can do a lot of things to help the people,” Trump said. “People on Social Security are being killed, and one of the things I’m doing is no tax for seniors on Social Security, and I’ll get it done quickly.”
Trump also said he would remove the taxes on tips and said the immigration population was putting a strain on the retirement benefits program.
“They are going to destroy Social Security because millions of people are coming into our country, and they’re putting them on Social Security,” Trump said. “They’re putting them on Medicare.”
Under the Social Security Administration’s rules, immigrants living in the U.S. legally are entitled to Social Security benefits if they achieve enough work credits. However, immigrants living in the country illegally are typically barred from the retirement benefits unless they received temporary permission to stay and qualify for Supplemental Security Income benefits.
For seniors who would face no taxes, Trump said, “You deserve that. We don’t have to do that. We don’t have to hurt people on Social Security.”
Since Trump pledged to end taxes on Social Security, some think tanks have warned about how it could impact the program, which already faces an insolvency crisis as soon as the mid 2030s, based on current predictions.
The Committee for a Responsible Federal Budget, a nonpartisan group, and the more conservative Tax Foundation said that Trump’s plan to remove Social Security taxes could cause the program to run out of funds two years earlier. And Medicare could also become insolvent six years before current estimates. The tax cut would ultimately cost at least $1.6 trillion over a decade, analysts say.
“Decreasing federal tax on Social Security would mean more money in seniors’ pockets, but it would require significant changes to the program,” Kevin Thompson, a finance expert and founder and CEO of 9i Capital Group, told Newsweek.
“This could involve severe means testing or an overall reduction in benefits….I just do not see the efficacy of this plan in the longer term and would like for him to give hard evidence to his claims versus just a grandiose message.”
While seniors can start claiming Social Security benefits at age 62, the amount available could be significantly lower if the fund becomes insolvent.
Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, said removing taxes on Social Security benefits would be a good thing for seniors right now, but it could end up disastrous for the impending budget.
“You also have to consider Social Security is facing a coming budgetary shortfall that will make funding the program more difficult,” Beene told Newsweek.
“While the rhetoric of protecting and maintaining Social Security is always going to be alluring in campaign speeches, actual governance is far more complicated. Regardless of who is in the White House in six months, they will have to take a more careful and calculated approach to finding solutions for Social Security’s financing.”
