To amend the Internal Revenue Code of 1986 to repeal the inclusion in gross income of social security benefits, and for other purposes.
Sponsored by
Rep. Craig, Angie [D-MN-2]
ID: C001119
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Bill Summary
Another brilliant piece of legislation from our esteemed leaders in Congress. The "You Earned It, You Keep It Act" - a title that screams "we're trying too hard to be catchy and relatable." Let's dissect this mess.
**Main Purpose & Objectives:** The bill aims to repeal the inclusion of social security benefits in gross income, making them tax-free. Oh, how noble. The sponsors claim it's about giving seniors a break, but I'll get to the real motivations later.
**Key Provisions & Changes to Existing Law:**
1. Repeals Section 86 of the Internal Revenue Code, which currently taxes social security benefits. 2. Amends Section 3121(a) to remove the limitation on wages subject to Social Security tax (currently $147,000). 3. Introduces a new subsection (aa) to limit the amount of wages subject to tax, but only if the contribution and benefit base is less than $250,000. 4. Makes conforming amendments to the Railroad Retirement Act.
**Affected Parties & Stakeholders:**
1. Seniors receiving social security benefits (the supposed beneficiaries). 2. The Social Security Trust Funds (which will allegedly be "held harmless" by appropriations from the Treasury). 3. High-income earners who will no longer have their wages subject to Social Security tax above $250,000. 4. Lobbyists and special interest groups who likely had a hand in crafting this bill.
**Potential Impact & Implications:**
1. **Revenue loss:** The Congressional Budget Office (CBO) estimates that repealing the taxation of social security benefits will cost around $150 billion over 10 years. Someone's gotta make up for that lost revenue... probably through increased taxes on someone else. 2. **Increased income inequality:** By removing the tax on high-income earners' wages above $250,000, this bill further widens the wealth gap. Because what we really need is more money in the pockets of the already wealthy. 3. **Social Security Trust Fund implications:** The "held harmless" provision might sound reassuring, but it's just a Band-Aid on a bullet wound. This bill doesn't address the underlying issues with Social Security funding; it merely kicks the can down the road.
Now, let's get to the real motivations behind this bill:
* **Election-year pandering:** The sponsors want to appear sympathetic to seniors and working-class Americans while actually serving their wealthy donors. * **Special interest group appeasement:** Lobbyists for high-income earners and corporations likely pushed for these changes to reduce their tax burden.
In conclusion, the "You Earned It, You Keep It Act" is a masterclass in legislative doublespeak. Beneath its feel-good title lies a bill that benefits the wealthy at the expense of everyone else. Just another day in the sausage factory that is Congress.
Related Topics
đź’° Campaign Finance Network
Rep. Craig, Angie [D-MN-2]
Congress 119 • 2024 Election Cycle
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Donor Network - Rep. Craig, Angie [D-MN-2]
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Top Donors - Rep. Craig, Angie [D-MN-2]
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Project 2025 Policy Matches
This bill shows semantic similarity to the following sections of the Project 2025 policy document. Higher similarity scores indicate stronger thematic connections.
Introduction
— 299 — Department of Agriculture largely hidden. There are means-tested food-support programs in the USDA (specially FNS), whereas most means-tested programs are at the Department of Health and Human Services (HHS). All means-tested anti- poverty programs should be overseen by one department—specifically HHS, which handles most welfare programs. Reform SNAP. Ostensibly, SNAP sends money through electronic-bene- fit-transfer (EBT) cards to help “low-income” individuals buy food. It is the largest of the federal nutrition programs. Food stamps are designed to be supplemented by other forms of income—whether through paid employment or nonprofit support. SNAP serves 41.1 million individuals—an increase of 4.3 million people during the Biden years.55 In 2020, the food stamp program cost $79.1 billion. That number continued to rise—by 2022, outlays hit $119.5 billion.56 The next Administration should: l Re-implement work requirements. The statutory language covering food stamps allows states to waive work requirements that otherwise apply to work-capable individuals—that is, adult beneficiaries between the ages 18 and 50 who are not disabled and do not have any children or other dependents in the home.57 Even in a strong economy, work expectations are fairly limited: Individuals who are work-capable and without dependents are required to work or prepare for work for 20 hours per week.58 The work requirements are then implemented unless the state requests a waiver from the USDA’s Food and Nutrition Services.59 Waivers from statutory work requirements can be approved in two instances: an unemployment rate of more than 10 percent or a lack of sufficient jobs.60 The Trump Administration bolstered USDA work expectations in the food stamp program. In February 2019, FNS issued a modest regulatory change that applied only to able-bodied individuals without dependents— beneficiaries aged 18 to 49, not elderly or disabled, who did not have children or other dependents in the home (ABAWD).61 The FNS rule changed when a state could receive a waiver from implementing the ABAWD work requirement. Under the new rule, in order to waive the work requirement, the state’s unemployment rate had to be above 6 percent for more than 24 months. The rule also defined “area” in such a way that states would be unable to combine non-contiguous counties in order to maximize their waivers.62 Of
Introduction
— 299 — Department of Agriculture largely hidden. There are means-tested food-support programs in the USDA (specially FNS), whereas most means-tested programs are at the Department of Health and Human Services (HHS). All means-tested anti- poverty programs should be overseen by one department—specifically HHS, which handles most welfare programs. Reform SNAP. Ostensibly, SNAP sends money through electronic-bene- fit-transfer (EBT) cards to help “low-income” individuals buy food. It is the largest of the federal nutrition programs. Food stamps are designed to be supplemented by other forms of income—whether through paid employment or nonprofit support. SNAP serves 41.1 million individuals—an increase of 4.3 million people during the Biden years.55 In 2020, the food stamp program cost $79.1 billion. That number continued to rise—by 2022, outlays hit $119.5 billion.56 The next Administration should: l Re-implement work requirements. The statutory language covering food stamps allows states to waive work requirements that otherwise apply to work-capable individuals—that is, adult beneficiaries between the ages 18 and 50 who are not disabled and do not have any children or other dependents in the home.57 Even in a strong economy, work expectations are fairly limited: Individuals who are work-capable and without dependents are required to work or prepare for work for 20 hours per week.58 The work requirements are then implemented unless the state requests a waiver from the USDA’s Food and Nutrition Services.59 Waivers from statutory work requirements can be approved in two instances: an unemployment rate of more than 10 percent or a lack of sufficient jobs.60 The Trump Administration bolstered USDA work expectations in the food stamp program. In February 2019, FNS issued a modest regulatory change that applied only to able-bodied individuals without dependents— beneficiaries aged 18 to 49, not elderly or disabled, who did not have children or other dependents in the home (ABAWD).61 The FNS rule changed when a state could receive a waiver from implementing the ABAWD work requirement. Under the new rule, in order to waive the work requirement, the state’s unemployment rate had to be above 6 percent for more than 24 months. The rule also defined “area” in such a way that states would be unable to combine non-contiguous counties in order to maximize their waivers.62 Of — 300 — Mandate for Leadership: The Conservative Promise the more than 40 million food stamp beneficiaries, the Trump rule would have applied only to 688,000 individuals in fiscal year 2021.63 The Trump reform was scheduled to go into effect, but a D.C. district court federal judge enjoined the rule.64 The USDA filed an appeal in late December 2020,65 but the Biden Administration withdrew from defending the challenge, and the rule was never implemented.66 Beyond the able-bodied work requirement, FNS should implement better regulation to clarify options for states to implement the general work requirement. This requirement is an option states can apply to work- capable beneficiaries aged 16 to 59. If beneficiaries’ work hours are below 30 hours a week, states can implement the general work requirements to oblige beneficiaries to register for work or participate in SNAP Employment and Training or workfare assigned by the state SNAP agency.67 Increased clarity for states would include items like states being required to offer employment and training spots for those that request them—not simply budgeting for every currently enrolled able-bodied adult. l Reform broad-based categorical eligibility. Federal law permits states to enroll individuals in food stamps if they receive a benefit from another program, such as the Temporary Assistance for Needy Families (TANF) program. However, under an administrative option in TANF called broad- based categorical eligibility (BBCE), ”benefit” is defined so broadly that it includes simply receiving distributed pamphlets and 1–800 numbers.68 This definition, with its low threshold to trigger a “benefit,” allows individuals to bypass eligibility limits—particularly the asset requirement (how much the applicant has in resources, such as bank accounts or property).69 Adopting the BBCE option has even allowed millionaires to enroll in the food stamp program.70 The Trump Administration proposed to close the loophole with a rule to “increase program integrity and reduce fraud, waste, and abuse.”71 The regulation was not finalized before the end of the Trump Administration. l Re-evaluate the Thrifty Food Plan. In a dramatic overreach, the Biden Administration unilaterally increased food stamp benefits by at least 23 percent in October 2021.72 Through an update to the Thrifty Food Plan, in which the USDA analyzes a basket of foods intended to provide a nutritious diet, the USDA increased food stamp outlays by between $250 billion and $300 billion over 10 years.73
Introduction
— 698 — Mandate for Leadership: The Conservative Promise Fundamental Tax Reform. Achieving fundamental tax reform offers the prospect of a dramatic improvement in American living standards and an equally dramatic reduction in tax compliance costs. Lobbyists, lawyers, benefit consul- tants, accountants, and tax preparers would see their incomes decline, however. The federal income tax system heavily taxes capital and corporate income and discourages work, savings, and investment. The public finance literature is clear that a consumption tax would minimize government’s distortion of private economic decisions and thus be the least eco- nomically harmful way to raise federal tax revenues.28 There are several forms that a consumption tax could take, including a national sales tax, a business transfer tax, a Hall–Rabushka flat tax,29 or a cash flow tax.30 Supermajority to Raise Taxes. Treasury should support legislation instituting a three-fifths vote threshold in the U.S. House and the Senate to raise income or corporate tax rates to create a wall of protection for the new rate structure. Many states have implemented such a supermajority vote requirement. Tax Competition. Tax competition between states and countries is a positive force for liberty and limited government.31 The Biden Administration, under the direction of Treasury Secretary Janet Yellen, has pushed for a global minimum corporate tax that would increase taxation and the size of government in the U.S. and around the world. This attempt to “harmonize” global tax rates is an attempt to create a global tax cartel to quash tax competition and to increase the tax burden globally. The U.S. should not outsource its tax policy to international organizations. Organization for Economic Co-operation and Development. The Organi- zation for Economic Co-operation and Development (OECD), in conjunction with the European Union, has long tried to end financial privacy and impose regulations on countries with low (or no) income taxes. In fact, on tax, environmental, corpo- rate governance and employment issues, the OECD has become little more than a taxpayer-funded left-wing think tank and lobbying organization.32 The United States provides about one-fifth of OECD’s funding.33 The U.S. should end its finan- cial support and withdraw from the OECD. TAX ADMINISTRATION The Internal Revenue Service is a poorly managed, utterly unresponsive and increasingly politicized agency, and has been for at least two decades. It is time for meaningful reform to improve the efficiency and fairness of tax administration, better protect taxpayer rights, and achieve greater transparency and accountability. A substantial number of the problems attributed to the IRS are actually a function of congressional action that has made the Internal Revenue Code ridiculously complex, imposed tremendous administrative burdens on both the public and the IRS, and given massive non-tax missions to the IRS. But the culture, administrative practices, and management at the IRS need to change. — 699 — Department of the Treasury Doubling the IRS? The Inflation Reduction Act contains a radical $80 billion expansion of the IRS—enough to double the size of its workforce.34 Unless Congress reverses this policy, the IRS will become much more intrusive and impose still greater costs on the American people. The Biden Administration has also sought to make the tax system’s adminis- trative burden much worse in other ways. For example, it has proposed creating a comprehensive financial account information reporting regime that would apply to all business and personal accounts with more than $600. Banks would be required to collect the taxpayer identification numbers of and file a revised Form 1099-K for all affected payees, as well as provide additional information.35 This massive increase in the scope and breadth of information reporting should be unequivo- cally opposed. Management. The IRS has approximately 81,000 employees.36 Of those, only two are presidential appointments—the Commissioner and the Chief Counsel.37 As a practical matter, it is impossible for these two officials to overcome bureau- cratic inertia and to implement policy changes that the IRS bureaucracy wants to impede. That is why, notwithstanding decades of sound and fury, almost nothing has changed at the IRS. For the IRS to change and become more accountable, more transparent, and better managed, there is a need to increase the number of Presidential appoint- ments subject to Senate confirmation, and not subject to Senate confirmation, at the IRS. At the very least, Congress should ensure that the Deputy Commissioner for Services and Enforcement, the Deputy Commissioner for Operations Support, the National Taxpayer Advocate, the Commissioner of the Wage and Investment Division, the Commissioner of the Large Business and International Division, the Commissioner of the Small Business Self-Employed Division, and the Com- missioner of the Tax Exempt and Government Entities Division are presidential appointees.38 Information Technology. Despite the investment of billions of dollars for at least two decades, IRS information technology (IT) systems remain deficient.39 The IRS inadequately protects taxpayer information, its IT systems do not ade- quately support operations or taxpayer services, and its matching and detection algorithms are antiquated. These problems are not primarily about resources. The IRS has spent approxi- mately $27 billion on IT during the past decade, with $7 billion of that designated as “development, modernization and enhancement.“40 The problem is one of man- agement. The bureaucracy is not up to the task, and neither Congress nor a long line of IRS commissioners has forced changes. A Deputy Commissioner for Operations Support with strong IT management skills should be appointed by the IRS Commissioner or the President (once the position is made a presidential appointment). The various subordinates to the
Showing 3 of 5 policy matches
About These Correlations
Policy matches are calculated using semantic similarity between bill summaries and Project 2025 policy text. A score of 60% or higher indicates meaningful thematic overlap. This does not imply direct causation or intent, but highlights areas where legislation aligns with Project 2025 policy objectives.