65+ $6000 Deduction
I see reports claiming the extra $6000 deduction for people 65+ will reduce Social Security Trust Fund revenue, but I don’t think that is correct, so I asked AI and here’s what I got.
Can you confirm with your Social Security expert?
What the new $6,000 senior deduction actually affects:
The deduction reduces taxable income for people 65+, which reduces income‑tax revenue.
That loss is borne by the general fund, not the Social Security Trust Fund.
The Trust Fund’s credited amount (based on the formula for taxing benefits) does not change because of the deduction.
The deduction does not alter:
– how much of a Social Security benefit is considered taxable
– the formulas that determine the taxable portion
– the statutory requirement that Treasury credit the Trust Funds with an amount equal to taxes on benefits
So your understanding is correct:
The new deduction reduces general federal revenue, not Social Security revenue.
Social Security’s funding stream is unaffected.
Why the headlines get it wrong
Many articles treat “less income tax collected” as “less money for Social Security,” but that’s not how the law works. The Trust Funds receive their credit regardless, and the general fund absorbs the difference.
Terry Says
Well, it’s all semantics. You know the “general fund” is running a billion dollar deficit each year. And there is no shoebox in Baltimore holding the SS “trust fund.”
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