Increase to Social Security benefits with a new bill that was just introduced. I have all the details for you on this topic.
And realistically, over the last couple of weeks, many of you reaching out wondering when will the Social Security 2100 and when will the SSI Restoration Act go into effect? Now, this one that I’m going to be talking about in this video right here is not actually within those two provisions. However, to quickly answer those questions, since it’s within the same topic line here, I do want to talk about it for just a minute here. So when it comes to the Social Security 2100 and the SSI Restoration Act, unfortunately, those have been put on pause for a little bit of time here simply because it’s all coming down to the stimulus package, otherwise known as the build back better agenda or the revised stimulus package or what they’re calling it now is the skinny bill. So all of those are in reference to essentially the same thing.
But we don’t really have a new name for it simply because for the reasons I’ve told you in previous videos, the original bill, the $2.2 trillion build back better, is not happening. So as a result of that, they are working on a revised version or a skinny bill of that. The whole point I’m bringing that up is because the Social Security 2100 and the SSI Restoration Act are unfortunately being put on pause right now because of that major bill, the stimulus package actually being held up as well. So the whole plan was for them to get this done before the end of last year. They didn’t get it done.
And now here we are already what, a month and a half into the year and they haven’t gotten it done yet. So when they get this whole thing done, hopefully relatively soon, maybe then they will actually bring Social Security 2100 and the SSI Restoration Act to the floor, open them up for debate, and hopefully, they will actually get some kind of action out of them. Maybe they’ll get the whole thing passed, maybe certain portions of it. Who knows at this point, that’s kind of where we stand up in the air. So for those of you that have been asking, I hope that lays it out a little bit more clearly and lets you know where we stand with the Social Security $2,100 and the SSI Restoration Act, which let’s just say this much those would be pretty life-changing for a lot of people receiving these monthly benefits, especially the SSI Restoration Act.
That one has a lot of good stuff in there for about the 8 million people drawing on SSI benefits. But we can always revisit that in a separate video. Now let’s talk about this new bill. I apologize there, but I wanted to explain that since we’re talking about essentially the same topic here, I just wanted to lay that out for you because I’ve seen so many comments down below. All right.
So let’s talk about this new bill. Now. This one is being introduced by Daniel Webster. He is a congressman, and he is introducing this new bill called the Senior Citizens Tax Elimination Act. So here’s what’s going on here.
This Congressman Daniel Webster is coming out saying that for all of these years, decades and decades, many years, Social Security beneficiaries have been paying in taxes. Right. Throughout your working career, all the time that you’ve been spending, working, you’ve been paying in taxes, taxes, taxes. Every single time that you get a paycheck, your taxes are already taken out. Right.
They take the money before you even get to see it. You’re paying in on all of this. Well, here’s the problem. Daniel Webster and the co-sponsors on this bill are looking at this and saying there’s a problem here. All of these beneficiaries or a portion of these beneficiaries are receiving benefits now and once again, getting hammered with taxes.
We need to remove these taxes because that is double taxation and this is not allowed. This is not okay. These people should not be needing to pay taxes on their Social Security benefits because they’ve already paid into the system. They’ve already paid money to receive these benefits. And now that they’re receiving the benefits, they’re paying taxes again, in other words, double taxation.
So these congressmen are coming out saying this is not okay. And then now they’re introducing this new bill, the Senior Citizens Tax Elimination Act, which would ultimately lift benefits for beneficiaries. Because here’s the deal. If you’re not paying taxes, if it is tax-free income, think of how much money that would actually be in your pocket. I mean, even in the lowest tax bracket, 10%, 12%.
You know what I mean? If you continue to move up from there, that’s an extra 10% more percent that you could be keeping in your pocket versus going out the door in taxes that you’re not even seeing anyway. Right? So that essentially just results in an extra boost right there to your benefits. So here’s what actually happened.
Prior to 1984, there were no federal taxes on Social Security benefits. However, as we’ve always talked about previously, once taxes are implemented, it’s kind of hard to repeal those taxes simply because the appetite for that money remains and it only gets stronger and stronger. Right. Just like when we sit down and we want to eat a little piece of cake or a doughnut or something really good, right? We eat one and then we’re like, that was pretty good.
Maybe I should go in for another, right? Well, the appetite just continues to grow and grow. The same thing goes with tax revenues, right? As soon as the tax is implemented, it’s hard to repeal that because they rely on that money just like what we’ve talked about so many times here for monthly benefits. When people get an extra benefit right now, we start to rely on that benefit.
If they were to take that benefit away or reduce it because of other expenses or taxes or reducing other benefits, ultimately we’ve come to rely on those benefits. And therefore, if they’re taken away, all of a sudden it’s like, Whoa, wait, what just happened here? They’ve taken something away that I’ve become reliant on. But essentially what happened is prior to 1984, there were no federal taxes on Social Security benefits. However, 1984 and after they’ve started to implement federal taxes on Social Security benefits, and these congressmen that are implementing or introducing this new bill here are simply saying we can’t be taxing on the federal level.
We can’t be taxing Social Security benefits. These beneficiaries have already paid in through decades and decades of service, through all the years that they’ve been paying in and earning this benefit. And now that they’re receiving the benefit, they’re getting taxed again and they’re happy to repeal this. So again, whether this actually goes through and actually passes, who knows? But at the end of the day, are they really getting a ton of tax revenue out of Social Security beneficiaries?
I mean, let’s just be real here for all the people that are struggling. In fact, that was also one of their statements as well, talking about all the beneficiaries and how much they’re struggling and then at the same time being required to pay taxes on their benefit. So let’s just be real here, though. For all the tax revenues that are collected in this country throughout the course of the year, are they really getting a ton of tax revenue out of Social Security benefits? Let’s just be honest here.
It’s probably not that much, right? To be honest. They could probably tax corporations another 1%. They could tax the high-income earners another 1%. They could do other strategies to get that tax revenue.
And realistically, it probably doesn’t shake out to a whole lot. However, at the end of the day when it comes down to monthly benefits for beneficiaries, even simply paying $20 in taxes per month, again, or you know what I mean, per pay period, whatever. $20 is $20, especially right now when inflation is raging through the country. Inflation is out of hand. Prices are going up on everything.
The purchasing power of our dollars is depleting. So yeah, $20 even if it was 20. But let’s be real. It’s not $20. It’s more than that.
Right. But the point is, even paying a little bit of tax on these benefits, whether it’s $20 or $200, it doesn’t really matter. It’s still the money that counts. And all of these beneficiaries are reliant on that money. So it would be essentially a nice little boost to benefits if this bill actually went through and they actually did repeal the federal tax on Social Security benefits.
Now, some States may still tax Social Security benefits, but again, in general, tax rates on the state level are far less than what they are on the federal level. But it depends on the state. It’s all across the board. States have their own income tax brackets, like New York, New Jersey, California. They’re very high tax, whereas some States don’t have any taxes at all.
Arizona, Nevada, Florida, Alaska, Wyoming, States like this, they have no tax state tax at all. So you can see and then, of course, there are many other States across the board there that have varying state taxes, a few percentage points, whatever it happens to be. But either way, it all comes down to the same thing. The bottom line, what are you getting in your bank account? What are you getting as a monthly benefit each and every month.
Right. So if it’s tax-free income, ultimately that just means it’s more money in your pocket to pay for your living expenses, your necessities, food on the table, gas in your car, insurance for your home, whatever it happens to be, whatever, honestly, it doesn’t really matter. It’s your money. You do what you want with it. But another great bill out there to hopefully help Social Security beneficiaries.