Former President Donald Trump's proposed tax breaks, including eliminating federal income taxes on Social Security benefits, could potentially deplete Social Security trust funds earlier than projected. A new analysis from the Committee for a Responsible Federal Budget suggests that Trump's platform may lead to the trust funds running out of money by 2031, resulting in a significant cut in benefits unless Congress intervenes.
Social Security has been facing financial challenges due to the increasing number of beneficiaries and a shrinking workforce contributing to the system. The program's trust funds are currently projected to be depleted by 2034, leading to a 23% benefit cut. However, if Trump's proposals are implemented, benefits could be 33% smaller by 2035.
One of Trump's costliest proposals is eliminating federal income taxes on Social Security benefits, which could reduce program revenue by $950 billion over a decade. While this tax break may initially benefit higher-income recipients, lower-income individuals could bear the brunt of benefit reductions once the trust funds are exhausted.
In addition to tax breaks on Social Security benefits, Trump has also promised to eliminate federal taxes on tips and overtime pay. These measures could further impact Social Security revenue, potentially affecting the retirement benefits of workers who rely on the program.
Overall, Trump's tax proposals have raised concerns among experts and advocacy groups, with some criticizing the potential impact on Social Security's financial stability. While Trump's campaign defends the tax breaks as part of a broader economic strategy, critics warn that these measures could jeopardize the long-term sustainability of the Social Security system.
