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 2012 Trustees Report

		Long-range actuarial balance	Annual balance in 75th year	Long-range actuarial balance	Annual balance in 75th year
		Change from present law		Results with this provision
	Present Law, Alternative II.			-2.67	-4.50
H1	Starting in 2013, tax Social Security benefits in a manner similar to private pension income. Phase out the lower-income thresholds during 2013-2022. graph \| table \| pdf-graph \| pdf-table \| memo (Social Security Advisory Board)	0.26	0.17	-2.40	-4.34
H2	Starting in 2013, tax Social Security benefits in a manner similar to private pension income. Phase out the lower-income thresholds during 2013-2032. graph \| table \| pdf-graph \| pdf-table \| memo (Warshawsky)	0.24	0.17	-2.43	-4.34
H3	Tax Reform for Individuals: Starting in 2014, 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)	-0.03	-0.06	-2.69	-4.56


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