Only nine senators voted against it. When Reagan signed the bill into law, he praised the bipartisan effort in his remarks and was joined by members of both parties. Today, about half of Social Security recipients pay no federal income tax on their benefits, according to a June 12 report from the Congressional Research Service. In this case, the change was part of a major tax bill that President Bill Clinton had laid out in his State of the Union address in February Among its provisions was an increase to the amount of Social Security benefits that could be taxed for some recipients.
This change to the Social Security program was structured similarly to the change. It added another bracket to the income thresholds and increased the portion of benefits eligible to be taxed if recipients exceeded the second-tier thresholds. The tax bill, which included several controversial changes, was highly partisan.
Not a single Republican voted in favor of it. Biden voted for the bill , along with the majority of his Democratic colleagues in the Senate. We addressed another claim related to this issue when Sen. The Romney campaign had failed to mention, as do the current social media posts, that the additional tax revenue would go into the Medicare hospital insurance trust fund — which was rapidly depleting. Rather, they refer to a proposal to equalize the tax incentive for contributions to such accounts, which would increase the tax break for lower-income individuals and decrease it for those with high incomes.
If, instead, everyone who put money into a retirement account received a flat-rate credit — untethered from their tax rate — it would shift more of the subsidies to low- and middle-income workers. In fact, a flat tax credit would result in a larger tax break for lower-income individuals who contribute to retirement accounts. Our previous stories can be found here.
As a result of this law, 1. After , the allocation of Social Security payroll contributions will revert to what it had been for the years through Browse by Topic. Disability payments were enacted in and initially were payable only to workers aged Payments to divorced wives began in , and to divorced husbands in How can we help you? Media Inquiries. Social Security benefits were "explicitly excluded" from federal income taxation before Reagan signed the amendments into law, according to the SSA.
The act was Democratic President Bill Clinton's first budget and marked the highest peace-time tax increases on high-income earners in U. Biden was a U. The agency also had an online copy of the commission's recommended changes , which included "taxation of benefits for higher-income persons. There's no evidence to support the claim that Biden wrote the bill.
In fact, it was introduced in the House by a Democratic representative from Illinois, Dan Rostenkowski. GovTrack, a government transparency website, recorded Biden's yea vote on the Act. But there's no indication of proposed taxes on k or IRA retirement accounts on Biden's official campaign website. The Democratic presidential nominee said he wants to equalize retirement plan tax benefits across the income scale, according to the Biden campaign.
The tax credit would be deposited into the retirement account as a matching contribution.
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