Trump wants to cut taxes on Social Security payments. But will that mean lower benefits?

WASHINGTON — Middle class Social Security recipients can pay income tax on huge chunks of their monthly benefit. Donald Trump wants to eliminate that tax.

But doing so could dramatically reduce how much recipients will get in benefits in a few years. Currently, 6.3 million Californians get benefits from Social Security programs.

Trump posted his proposal on his Truth Social website, this summer, saying “SENIORS SHOULD NOT PAY TAX ON SOCIAL SECURITY!” This month, independent analysts are warning the plan could starve Social Security of important dollars that will be needed to pay recipients.

The tax break, along with the impact of other Trump economic proposals “would dramatically worsen Social Security’s finances,” said a report this week from the nonpartisan Committee for a Responsible Federal Budget.

Trump’s campaign dismissed the idea that cutting the Social Security tax would starve the program of crucial dollars needed to pay benefits.

Thanks to a broad array of economic reforms, “President Trump will quickly rebuild the greatest economy in history and put Social Security on a stronger footing for generations to come, all the while eliminating taxes on Social Security for America’s well-deserving seniors,” said Karoline Leavitt, campaign national press secretary.

Trump’s Social Security tax proposal would provide no benefit to those with the lowest 20% of incomes, since they are already exempt from Social Security taxation.

“Higher earners would see a larger benefit,” said an analysis from the Tax Foundation. The top 20% of income earners, or those with incomes above $96,200, would save between $1,692 and $2.294 on their 2025 taxes.

A senior is exempt from having their Social Security taxed if their income is less than $25,000 if filing as an individual and $32,000 on a joint return. That figure includes their adjusted gross income from other sources and half of their Social Security benefits.

If their income is higher, they pay income tax on half those benefits. If income reaches $34,000 for an individual and $44,000 on a joint return, another 35 percentage points could be added to the tax rate on Social Security.

A recipient’s Social Security benefits go up each year with the cost of living. The amount will increase 2.3% next year.

But the taxation levels do not go up with inflation, which means more and more people are subject to the tax.

A loss of tax revenue could cause other problems, said the Committee for a Responsible Federal Budget.

It estimated that Social Security revenue could drop about $2.3 billion from 2026 to 2035. In addition to the tax cut, the program’s funds could also be affected by Trump’s plan to end taxation of overtime pay and tips, meaning less is deducted from pay and thus less would be available for the Social Security fund.

Also affecting the fund could be Trump’s crackdown on border security, which could mean fewer immigrants working and paying into Social Security, and his vow to increase tariffs, which could increase the cost of living. Benefits are adjusted each year to account for inflation.

Vice President Kamala Harris’ Social Security plans would “not have large effects” on the program’s solvency, the committee found.

In her economic plan, the Democratic presidential nominee said her administration “will shore up Social Security and Medicare so that these essential programs will stay solvent in the long run by making corporations and the wealthiest Americans pay their fair share in taxes.”

Social Security’s trust fund reserves are expected to run out of money sometime in fiscal 2034, which begins Oct. 1, 2033.

The committee estimated that under Trump’s plan, the program would become insolvent three years earlier.

Since benefits are paid by money coming into the program, estimates from the nonpartisan Congressional Budget Office predict that if Social Security finances stay on their current path, benefits would be cut by 23% in 2035.

Under the Trump plan, the committee said, benefits would be cut by 33% that year.

The Trump campaign dismissed the findings.

“The so-called experts at CRFB have been consistently wrong throughout the years. President Trump delivered on his promise to protect Social Security in his first term, and President Trump will continue to strongly protect Social Security in his second term,” said Leavitt, the campaign spokeswoman.