President Trump and the White House Claim the "Big, Beautiful Bill" Will Eliminate Social Security Taxes for 88% of Seniors Who Receive Benefits. Would You Qualify?

Many people, such as President Donald Trump and many members of Congress, are excited what they refer to as the "big, beautiful bill. " Others are not happy at all

Part of the blem is that while some parts of it can seem beautiful, they have meaningful drawbacks

Consider Social Security

The White House issued a statement on July 1 saying that "Under the One Big Beautiful Bill, the vast majority of senior citizens -- 88% of all seniors who receive Social Security -- will pay NO TAX on their Social Security benefits, according to a brand new analysis from the Council of Economic Advisers. " Image source: The White House

Here's a look at whether you might be among the 88% -- and whether you should be delighted it. (Spoiler: You may want to put away the confetti and noisemakers. ) Taking a closer look at the "one, big beautiful bill" on Social Security So, having 88% of Social Security recipients exempt from taxation on their benefits sure sounds great

Instead, it's creasing the number of those who won't face taxes on their Social Security benefits

That 88% figure is also short of the 100% implied by Trump in earlier mises, when he said things "There's also no tax on tips, no tax on Social Security, no tax on overtime. " To be, the bill does not eliminate taxes on Social Security

Instead, it creates a new deduction that will shrink the portion of benefits subject to federal taxation, in many cases shrinking it to zero

It's also worth noting that this is all related to federal taxation of Social Security benefits

Nine states tax Social Security to some degree

It's often done with a light hand, though, and many folks in those states will pay no tax at all

Who qualifies for the new tax-shrinking deduction

What's good and bad the new lower taxation

On the surface, this seems good news, even if it doesn't apply to everyone

For the many who will get the deduction, it's hard to argue with paying less in taxes

This unwelcome scenario doesn't have to happen, though because there are multiple ways to fix the blem

At the moment, though, there's been relatively little talk bolstering Social Security

And instead, it's ly to get weaker -- because if fewer seniors are paying taxes on their benefits, that will mean less money flowing into Social Security's coffers

Thus, while offering a tax break sounds nice, the big picture is very worrisome

As my colleague Adam Levy has asserted, what really seems to be happening is that Trump and Congress are failing to tect Social Security

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