Briefing

Can We Tax Social Security Benefits More Efficiently?

Abstract: Many seniors pay taxes on their Social Security benefits due to a provision in the program's 1983 reform, under which the portion of benefits that's taxable rises with total income. This tax structure can impose high marginal rates on seniors even if their other income sources are modest. These high marginal rates, in turn, can determine whether beneficiaries decide to keep working or retire. Research suggests that several policy alternatives are more likely to keep seniors in the workforce and to generate more revenue for the Social Security Trust Fund.

Keywords: Social Security;

Bibliographic Information

Provider: Federal Reserve Bank of Richmond

Part of Series: Richmond Fed Economic Brief

Publication Date: 2017

Issue: November