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Summary of Provisions That Would Change the Social Security Program
Solvency Provisions

Description of Proposed Provisions:
Provisions Affecting Taxation of Benefits

Estimates based on the intermediate assumptions of the 2013 Trustees Report


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  Change from present law Results with this provision
Long-range
actuarial
balance		 Annual
balance in
75th year		 Long-range
actuarial
balance		 Annual
balance in
75th year
  Present Law, Alternative II.
     -2.72 -4.77
H1 Starting in 2014, tax Social Security benefits in a manner similar to private pension income. Phase out the lower-income thresholds during 2014-2023.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) 		0.21 0.14 -2.51 -4.62
H2 Starting in 2014, tax Social Security benefits in a manner similar to private pension income. Phase out the lower-income thresholds during 2014-2033.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) 		0.19 0.14 -2.53 -4.62
H3 Tax Reform for Individuals: Starting in 2015, modify personal income tax by: (a) establishing two-brackets with marginal rates of 15 and 27 percent separated at $51,000 (CPI indexed); (b) creating a non-refundable credit for low-income tax filers age 65 and older; and (c) treating capital gains as regular income. Tax all Social Security benefits at the applicable marginal rate (15 or 27 percent) less a non-refundable credit of 7.5 percent. Base revenue to OASDHI on the net marginal rates of 7.5 and 19.5 percent, with 40 percent of revenue dedicated to HI.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center) 		0.06 0.04 -2.66 -4.73
H4 Increase the threshold for taxation of OASDI benefits to $50,000 for single filers and $100,000 for joint filers starting in 2015. Taxation of benefits revenues transferred to the Hospital Insurance (HI) Trust Fund would be the same as if the current-law computation applied.
graph | table | pdf-graph | pdf-table | memo (Larson) 		-0.12 -0.01 -2.84 -4.78
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Last reviewed or modified September 13, 2013