Donald Trump‘s plan to eliminate taxes on Social Security benefits has raised concerns among certain think tanks.
They warn that such a move could potentially shorten the lifespan of Social Security and Medicare programs, contradicting Trump’s campaign promise to shield these programs from cuts.
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What Happened: The nonpartisan Committee for a Responsible Federal Budget and the right-leaning Tax Foundation have both indicated that Trump’s plan could hasten the insolvency date of Medicare by six years and Social Security by almost two years.
According to a report by Semafor, this is primarily because the elimination of the tax on benefits would reduce federal revenue, thereby diminishing the government’s ability to spend on these programs.
Trump has dismissed these concerns, arguing that his plan could create an environment conducive to finding solutions to the funding gaps.
He assured that his administration would safeguard Social Security and not harm seniors. Critics, on the other hand, warn that the plan could lead to cuts in benefit checks for retirees and payments to hospitals treating Medicare-dependent patients.
"One of the things good about that is that's when people will make a deal," Trump told Fox News. "But we're going to take care of Social Security, we're not going to do anything to hurt our seniors. There is so much cutting, there is so much waste in our government."
Currently, seniors with annual incomes between $25,000 and $34,000 are required to pay income tax on 50% of their Social Security benefit, while those earning above $34,000 must pay tax on 85%.
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"President Trump is calling for the largest deportation program since President Eisenhower to end the financial drain on our healthcare system and ensure that our country can continue to care for American citizens who rely on Medicaid, Medicare, and Social Security – not illegal immigrants," Trump spokesperson Karoline Leavitt told the outlet.
“If Trump's plan is turned into law, a large share of the benefit will flow towards richer seniors. In the bottom half of seniors, less than half will get any tax cut," Marc Goldwein, senior vice president at CRFB, told Semafor.
Trump’s proposed tax cut plan, which is projected to cost at least $1.6 trillion over a decade, is being viewed as a financial burden.
Why It Matters: "It's a big fiscal idea comparable to TCJA 1.0," Brendan Duke, senior director of economic policy at the Center for American Progress Action Fund, told Semafor, referring to the 2017 GOP tax cuts.
Critics also argue that if the plan becomes law, a significant portion of the benefit will flow towards wealthier seniors, thereby exacerbating income inequality among the elderly population.
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This article Does Donald Trump's Proposed Tax Cut Threaten Social Security And Medicare? Here's What Think Tanks Warn originally appeared on Benzinga.com
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