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Truth about taxes.


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    In this week's newsletter, Paul Gosar mentioned that he had introduced a bill to eliminate tax on Social Security, but he does not mention WHY the benefits started being taxed in 1983.

    Ronald Reagan.

    Despite President Reagan's 1983 tax cuts, the total tax burden on Americans is still going up. Lower Federal income tax rates have been more than offset by higher Social Security taxes and by higher levies by states and localities.

    At the Federal level, the Reagan tax program has managed to reverse -though only slightly - a steady upward trend in the portion of Americans' earnings taken by income taxes and Social Security.

    In 1982, for the first time since 1975, that percentage fell. For a family earning the median income of $23,895, it dropped to 17.2 percent of total income from 17.7 percent the year before, according to figures compiled by the Tax Foundation, a tax research group. And the group estimates that it will fall further, to 16.7 percent this year, when the third and final of the tax cuts takes hold.

    The Reagan income tax cuts total 25 percent, including the 10 percent cut effective this coming July 1. But the net gain at the Federal level is much less, not only because of the rise in Social Security taxes, but also because many people have moved into higher tax brackets as a result of wage increases granted to keep pace with inflation. 'Not Much Left Over'

    https://www.nytimes.com/1983/04/15/business/despite-reagan-cuts-many-are-taxed-more.html

    During his 8 years in office, the Federal debt under Reagan nearly tripled.

    Tax cuts do not pay for themselves, but the Republicans still have not figured that out.

    For the majority of Americans, including me, there is little or no tax being paid for Social Security. Who would Gosar's plan benefit?

    Rich people, who stop paying into Social Security when their income hits $142,800.

    https://pocketsense.com/yearly-stop-paying-social-security-8660171.html

    For the 2019 and 2020 tax years, single filers with a combined income of $25,000 to $34,000 must pay income taxes on up to 50% of their Social Security benefits. If your combined income was more than $34,000, you will pay taxes on up to 85% of your Social Security benefits.

    For married couples filing jointly, you will pay taxes on up to 50% of your Social Security income if you have a combined income of $32,000 to $44,000. If you have a combined income of more than $44,000, you can expect to pay taxes on up to 85% of your Social Security benefits.

    That does not mean that you will lose 85% of your Social Security income to taxes. It means that 85% of your Social Security income is taxable.

    Our combined family income is roughly $50,000, and most of that is Social Security income (the balance comes from my sub teaching jobs). We usually pay very little tax on our Social Security.

    https://smartasset.com/retirement/is-social-security-income-taxable