Donald Trump, the Republican presidential nominee, has promised to cut taxes on Social Security

Before the rally, he took to Truth Social to share a message with his followers, declaring in all caps, "Seniors should not pay tax on Social Security!"

This promise comes at a time when senior poverty is on the rise. The National Council on Aging reports that over 17 million older adults—roughly one in three people aged 65 and older—were considered "economically insecure" as of February 2024. The NCOA also points out that millions of older workers are approaching retirement with no savings.

Currently, about 40% of Social Security recipients pay federal income taxes on their benefits. If an individual's combined income falls between $25,000 and $34,000, they pay income taxes on up to half of their benefits. For those with a combined income exceeding $34,000, up to 85% of their benefits may be taxable, depending on total income.

A Tax Foundation article published on August 2nd called the move "unsound and fiscally irresponsible." In 2024 alone, income tax on Social Security benefits is expected to generate around $95.3 billion in revenue for the trust funds, with this figure projected to rise to over $228 billion by 2033. Eliminating these taxes could accelerate Social Security's insolvency date to 2033 and Medicare's to 2030.

While Trump's proposal could increase after-tax incomes for Social Security recipients and slightly boost GDP and employment, the overall economic gains would be small compared to the significant revenue loss. Higher earners would benefit more from this tax exemption, while the bottom 20% of earners, who are already in the 0% tax bracket for benefits, would see no change.