Donald Trump has said he’s going to eliminate the tax on Social Security
Former President Donald Trump has proposed a bold new idea for Social Security: eliminating taxes on benefit income.
“Seniors should not pay tax on Social Security,” Trump declared on July 31 in all capital letters on the social media platform Truth Social and reiterated during an Aug. 7 Fox & Friends interview.
While this change would allow beneficiaries to retain more of their monthly payments, Trump’s proposal has a “fatal flaw” according to Rep. John Larson, D-Conn., who spoke exclusively to CNBC.com.
“He’s proposing a tax break without addressing how to compensate for the lost revenue,” said Larson, the ranking member of the House Ways and Means subcommittee on Social Security. “In effect, his proposal could deplete the Social Security trust fund.”
Wednesday marked the 89th anniversary of Social Security since President Franklin D. Roosevelt signed it into law.
The program’s future is uncertain, with its combined trust funds expected to be depleted by 2035. If Congress doesn’t act before then, beneficiaries could face an across-the-board 17% reduction in benefits.
The trust fund that pays retirement benefits is projected to run out even sooner, in 2033, potentially leading to a 21% cut to those benefits.
Social Security’s future is a major concern for voters as they consider candidates for the November presidential election, according to a new CNBC poll.
“I believe, from my conversations with many on both sides of the aisle on Capitol Hill, that there is a strong desire to address this issue and extend the program for many years to come,” Social Security Commissioner Martin O’Malley told CNBC’s “Squawk Box” on Wednesday.