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DOUBLE TAXATION OF SENIORS IS NEW CAUSE FOR AMAC

AMAC's Founder, Dan Weber

BOHEMIA, NY, Apr 29, 2011 – The Association of Mature American Citizens says it is focused on a new cause—the double taxation of senior citizens.  Dan Weber, AMAC’s president, says it is “appalling” that many seniors on social security must pay income tax on their benefits and is calling on Congress to address the issue promptly.

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“The government is taxing their taxes, and that is just plain unfair” Weber notes in a new campaign calling on all seniors to join AMAC in its “demand that tax reformers on the Hill take a closer look at this particular, peculiar inequity in the law that decidedly targets older Americans.”

He gives as an example a person with a combined income of $38,000, (assuming $24,000 in Social Security income) would have half of his or her Social Security taxed. That person would fall into the 15% tax bracket resulting in $1,800 in extra tax on their Social Security income. In fact, when total combined income exceeds $44,000, 85% of the individual’s Social Security gets taxed, typically resulting in an extra tax of $3,000 or more. [See Social Security publication 915 to figure your combined income].

“These folks accumulated Social Security benefits in the first place by paying taxes and now the taxes they paid are being taxed.

AMAC has designated its Web site, www.amac.us, as the rallying point for its new cause and is asking “seniors and their families to visit and express their opinions and tell their own stories on this and other issues affecting them.”

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Read more articles by Daniel C. Weber

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84 Comments on "DOUBLE TAXATION OF SENIORS IS NEW CAUSE FOR AMAC"

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slackker
1 year 5 months ago

Here is the bill to fix this below. It has been introduced.

https://www.govtrack.us/congress/bills/114/hr589

slackker
1 year 5 months ago
Tired of Being Screwed
1 year 6 months ago
My husband has been on SS “Disability” starting at age 51 for the last 10 years making an average of $900 per month. I work and make over $32,000.00. Because we are married FILING JOINTLY, my income counts as his income! Let’s flip this idea…..my income counts as his income in double taxing his SSD, why isn’t my SS paid in used to establish his monthly SSD income at a higher amount? MY EARNINGS are UNDER MY SS# and should not be calculated as relative to his benefits. This double taxing on SS benefits is STEALING!! MY income tax return, earned under MY SS# is not my husband’s earnings! They say “file Married Separately”, well let’s see….I would pay a higher tax percentage to start off and my husband would not even file because he only has SSD to claim so HIS Standard Deduction and Exemption Allowance is unavailable to… Read more »
Arn
2 years 3 months ago

When did congress change the law on double taxation. When was it past and who voted for it?

sedwin
2 years 2 months ago

This became law under the Reagan-Greenspan Tax Law of 1983. It was part of the “Supply Side” economic plan where the rich stopped paying their fair share and the poor picked up more of the slack. Of course even this amount didn’t make up the whole amount the rich no longer stopped paying which is why we have been a society of debt and deficit since Reagan (with the exception of the Clinton years when Clinton made the rich pay their fair share for those few years). Supply-side economics is nothing but a pyramid scheme for the wealthy. If we made the rich pay their share and we removed the ceiling of roughly $200,000 on social security taxable income, we could immediately remove these illegal double taxes.

Ted
2 years 9 months ago

Just wait until our fellow conservatives move us to the (un)FAIR Tax. It sounded great about 25 years ago, but my “59 1/2 Birthday” is less than two weeks away and I am scared to death that I’ll be paying tax AGAIN on the same money, this time when I spend it in retirement. Unless there is a phased-out refundable tax credit for retired persons (phased-out fully when those never subject to Federal income, Social Security and Medicare taxes reach retirement), it should not be endorsed by this organization. I hate to say it, but I may have to talk the Republican talk and vote the Democrat vote if that’s what it will take to spend, tax-free, my already-taxed Roth IRA and non-retirement savings!!!

Lou Wilson
4 years 3 months ago

My problem is that your income is taxed before Social Security is taken out. Then the Social Security is taxed as income when you get it back. This is dual taxation. Social Security itself is not a tax, but the income used to pay it should not be taxed at the front end, if we’re also paying tax on it in the back end.

Nancy
4 years 4 months ago
It is simple….my income was taxed when I was working and now because I worked my behind off for 32 years and get my retirement benefits I am having to pay taxes on 85% of my Social Security. I am not even working now, but get a monthly retirement benefit and because of this monthly retirement benefit I have to be taxed on my Social Security that I already paid taxes on when I was working. This burns me up. I was shocked to find out I would have to pay 1500 dollars this year in taxes. I am just furious. The government has money to send and spend in other countries, but they tax the senior citizens here in the USA. The government has money to bail out all these huge cooperations that didn’t handle their money correctly etc. but they tax the senior citizens. This will really drive… Read more »
Lawrence Coop
4 years 5 months ago

The IRS formula used to determine tax owed on Social Security income has not changed since it was first introduced and contains glaring examples of marriage penalties. In 1994 the amount subject to tax was increased from 50% to 85% and since that time Social Security COLAs have amounted to 44.3% with no indexing of the IRS formula. Maybe I should feel fortunate that our total income reguires us to pay Federal tax on 85% of SS income. The added 35% subject to tax resulted in an additionl tax liability of $1082.00 for tax year 2011.

Lauralie Campbell
4 years 11 months ago
In the latest edition of Amac Advantage, an article titled “Seniors Paying Double Tax on Social Security Income” suggests two specific proposals to remedy this wrong policy. While I applaud Amac for highlighting the unfairness of US tax policies against seniors, I am disappointed in Amac’s proposed alternatives. First, Amac encourages President Obama and Congress to remedy the situation through Tax Code changes to “take this tax burden off the middle class” and “go after the multi-millionaires and billionaires”. It is disappointing to hear Amac espouse what is essentially class warfare as a solution to any government created problem. Second, the Amac suggestion to create a ‘tax on the windfall profits received by the trial lawyers when they win a major lawsuit’ is doubly flawed. It ignores the fundamental need for tort reform in our flawed civil litigation system. Most importantly, it only fuels an already insatiable federal appetite for… Read more »
Frank K
4 years 11 months ago

The tax on 50% of Social Security benefits was initiated by R Regan. It was increased to 85% by Clinton.
The problem is the basis of $25,000 for Single and $32000 for Married has not been increased for inflation sicne 1983.

Richard & Dorothy
5 years 9 days ago

Yes, the Dems did pass this law.
Yes, it is unfair.
Yes, it should be repealed.
Why would the Dems repeal a sacred cow ? (Taxes that pay for their social programs)
The time to attempt repeal is when Obama is out of office and the Senate is controled by more conservatives.
Above all, we should never advocate raising the taxes on any person, rich, lawyer or whatever for our own benefit. Sounds like an Obama non solution.

TallGal in GA
5 years 14 days ago

I paid tax on my income and then Social Security was taken out. I pay taxes on my retirement income, which includes that same Social Security money. If Obama’s debt cure includes another tax on Soc Sec, wouldn’t that be TRIPLE taxation?

edna fox
5 years 1 month ago

my dad died in 1978 of cancer. five days before he died he received a letter from s.s. admin. stating that he was “able” to work. he died and my mom fought to get his s.s. benefits to no avail. how sad is this? makes you wonder who got it.

edna fox
5 years 1 month ago

i had to pay taxes on my s.s. for 7 years because my husband was working and this put us in a higher tax bracket. he retired last year and we were told that we would not have to pay these s.s. taxes any longer. this is so unfair, the govt. wants your money any way they can get it. they should be made to pay us back,

John W. Rosenberger
5 years 1 month ago

I know all about it. I have been paying into SS ever since it started back about 1936. It’s the damned democrats that want our money. We have got to get rid of the goddamned democrats!!

Marc Arquilla
5 years 1 month ago

Thank you

Marc Arquilla
5 years 1 month ago

Good to read that many others agree.

Marc Arquilla
5 years 1 month ago
I have not joined AARP because I learned that they work against my beliefs. I agree with most all of the postings above and am sickened to learn that seniors and all American citizens are being screwed by most of our representatives. They talk a good talk about helping people, but it is they (the politicians) who get helped by their actions. I have paid into the SS system since I was 14. I have been very sick for the last ten years and continued to go to work to support my family. The more I earned, the more I was penalized (taxed). Two years ago I had a kidney transplant. The transplant has kept me alive, but I can no longer work to support my family. I qualified for S.S. Disability and Medicare at the age of 60 (because of a law that entitles kidney dialysis or transplant patients).… Read more »
Donald
5 years 1 month ago
As a recent retiree I was exposed to the Federal Senior Citizen Tax, which is an extra tax on Social Security and/or Railroad Retirement benefits. It causes your taxable income to increase by taxing up to 85% of your Social Security and/or Railroad Retirement Benefits. Before 1984, Social Security benefits were tax exempt, then after a Greenspan Commission report pointed out that Social Security finances needed bolstering, congress changed the rules so a portion of Retirement Income became taxable. The limit was on 50% of the Social Security Benefits for (married filing jointly) returns that had more than $32,000 income. The algorithm increases the taxable income which in turn increases the Federal Income Tax burden on existing SS beneficiaries. The extra money was to be designated (Earmarked) to the Social Security Trust Fund. Then in 1993 the limits was raised to 85% and the base amount was raised to $44,000.… Read more »
Joan Apodaka
5 years 2 months ago

At what point do we say enough is enough? Now they starve our seniors and continue to give to illegal interloping squatters? We have worked our butts off from Day One and were made to pay into the system. We have been suckers for decades; taxing from citizens to give to illegal invaders. The majority of whom believe that 30% of U.S. territory should be “returned” to Mexico. If we are not angry enough at this point to “walk like Egyptians” I wonder how much agony at the hand of tyranny WILL it take?

Rick 05
2 years 8 months ago

Hate to say it but you are wrong my friend. Illegals are not entitled to SS.One must have a valid SS number and work for 10 yrs. and or have 40 credits to qualify. So please get your facts straight before you rant.

George Michaud
5 years 2 months ago
When I first joined AMAC quite some time ago, more than a year and 3 months I was looking for more from this organization and possibly I’m expecting too much too fast. However, while I certainly do not agree with the AARP agenda, I do expect more action from AMAC in Washington, DC . It seems like the only person representing us (AMAC)members in a big way is Jedediah Bila. I’ve seen her on FOX NEWS a few times and read her articles. The organization as a whole is just not doing enough to make a mark out there and let voters and Congress know that we exist. While I appreciate your good intentions and your efforts to date, with all the memberships and the fees you collect along with advertising dollars one would think you have the resources to to do more. Maybe a television ad promoting membership in… Read more »
DietSprite2011
5 years 2 months ago

Need to roll back the tax ruling that penalizes seniors who worked a full time second job AND PAYED FULL TAXES on income are penalized and only receive a small portion of their earned SS if receiving a pension.

John Higgins
5 years 2 months ago

Bill Lewis is a little off on the pay back, I’ve paid into SS over 45 years and as a self employed person I have put in over $100,000 in just the last 10 years. It will take more than 3 years before I get even. And what about the interest on what I paid in?

Maria - Florida
5 years 2 months ago
Finally someone is addressing this “double taxation”. There is $2.5 trillion in the trust fund in surplus that was collected between 1983 and 2009…..but it is not there. Congress has spent OUR money on roads to corporate welfare. The trust fund is filled with Treasury bonds that are not backed by any real assets. If the money was still there, invested, and earning interest/dividends, the fund would not be in the red. The Social Security system must return to its original purpose. Many American seniors are relying on Social Security as their main means of support. As of now, they are probably not taxed, but as we know, you give Congress an inch and they take a mile. COLA….we seniors were told there is no inflation???? Price of gas, food, utilities, I think they have risen dramatically. We might have been paying into SS since the 60’s, but we are… Read more »
Steve J
5 years 2 months ago

Unfair taxation, such as this, is the very reason we had the original ‘Boston Tea Party’. How long ’til we have another? Are the politicians and bureaucrats ignorant of our own history? You can bet they won’t pay taxes on their retirement benefits.

Matt
5 years 2 months ago

The Dirty Little Secret is that this is back-door Means Testing for Social Security Benefits. The better you did for yourself and your family during your working years the better off you will be during retirement. This can quite easily put you in a higher tax bracket making the Marginal Tax Rate on SS Benefits even higher.

Bill Lewis
5 years 2 months ago

Seems to me that once you have received SS payments that equal what you have paid into the system – which is usually 2 or 3 years after you begin receiving SS – you should be taxed on future payments.
I agree with Jim Gross on the exclusion of food and gas not being include in the CPI calculation.

Jim Gross
5 years 2 months ago

The double taxation is truly outrageous, but it is not the only outrage we put up with. How about cola? The deal was, we get a retirement that is adjusted for cost of living. Now they say, “well, yes but, we can’t count food or gas, they are too volatile”. OK, great, so long as we don’t eat or drive we should be just fine. This is the really big outrage we face now.

Larry O'Connor
5 years 2 months ago

Mandatory 70 1/2 pre-distros, let’s get that changed to 80 1/2. Email & call your state senators & congressman now. Tell them your a ‘community organizer’ for seniors!!!

George Michaud
5 years 2 months ago

Rick and Latetia in New York are right. Use that 1099 calculation on the reverse of that form or you can find in online easily. Regardless, we all need to fight like crazy to stop this President. He s bankrupting our nation. Watch very closely who you vote for next election. Do not be fooled by political rhetoric.

Rick
5 years 2 months ago

I gave up fighting this years ago, even though Clinton & Gore made FDR a liar. I’ve been paying into SS since the 1960s and will start drawing out next month. I will get taxed on 85% of the benefit, but in after tax dollars I will have received all of the dollars I paid to SS within 7 years.
I encourage everyone to do the same math, and AMAC to consider putting resources into issues likely to be more fruitful.

Laetitia in New York
5 years 2 months ago
People: please do the calculations on the back of your SSA-1099 to find out if you owe any taxes on your social security benefits plus other income. For example, if your SS is $24,000 and your other income is $14,000, the calculation would be as follows. One half the SS ($12,000) plus the other income ($14,000) equals $26,000. If you are married and filing jointly and your calculation is less than $32,000, you do not owe tax on your SS. The $14,000 in other income is than offset by your joint standard deduction of $11,600 for this tax year and your joint exemption amount of $7,300. In addition, your joint standard deduction is kicked up to $13,600 if you were born before 1/02/46. If you don’t have at least the standard deduction when itemizing, then why would you go through that hassle, when you can take either the $11,600 or… Read more »
Mel
5 years 2 months ago

Wasn’t it VP Al Gore that cast the deciding vote? Thanks a lot!!!

George Michaud
5 years 2 months ago
This is certainly NOT a very popular thing to do. More than likely it will not happen but if it does it truly is double taxation, no matter how one spins it. The Tea Party had better get on the ball and get on this one fast in a very big way. Just because Obama happened to be in The White House when Intelligence and The Military found UBL and killed him doesn’t make him a hero, a genius or anything like it. Anyone could have been in that office when this happened. Through all the administrations all leads had been followed up with but led no where. This one just happened to be the one which I understand came from KAL from the interrogations at Gitmo when Bush was President. The President needs to get some schooling on how to run a business, get the economy back on its… Read more »
tom in Maryland
5 years 2 months ago

Actually I believe you are only ststing half of the problem. In the years we earned income and paid into the Soc. Sec. system, our income tax was figured on all of our income. We did not receive an itemized deduction for the amount of social security paid into the system so it stood at the top of our income structure and was taxed at the maximum rate applicable in the years earned.
When Bill Clinton and Al Gore were in office, they decided to tax social security “income” subject to certain percentage reductions dependant on the amount of total income earned in any given year. This means that we are being taxed again on money distributed as social security but on which we have already paid income tax.

Barry L Hughes, DC
5 years 2 months ago

As long as we, the people, allow Congress to tax our income we will be subject to the abuses of government intrusion into our lives. This is why many of the founders felt so strongly about the evils of income taxation. We have seen that the left, progressives, if you will, repeatedly resorts to class warfare during election cycles to capitalize on the imagined rift between what they perceive as the war of the haves vs. the have nots (per Alinsky). Only a consumption tax (not a VAT) can solve this politicosocial dilema we face. Were EVERYONE in the country to pay a comsumption tax, those who spend more will necessarily pay more. The caveat is that EVERYONE will pay their FAIR share. No income tax = equality in taxation and economic freedom for businesses and individuals alike. No IRS and no double SS tax.

Neil Lynch
5 years 2 months ago

Give credit where credit is due.

Be sure to thank Al Gore as it was his deciding vote that allowed the tax on Social Security to pass.

Sandy Hodges
5 years 2 months ago

Greetings! My late father refused to work after 85% of his social security was taxable that first year. Perhaps he was cutting his nose to spite his face, but he was not going to let the government tax his SSI. Regardless. May he rest in peace.

Phyllis Bessette
5 years 2 months ago

SS was never intended to be total income for a person after retirement. If people think they can live on that paltry income, they are badly misguided. Do you remember when President Bush presented the idea that although withholding would still be mandatory, wage earners should be given the option to have their money go into SS or used to invest privately? The Democrats shot that idea down big time, and the AARP was apoplectic. We are apparently too stupid to manage our own money. Oh, and the SS payment you receive monthly does increase when taxes you pay on money you earn from your part time or full time job (still trying to make ends meet) is taken into consideration. Your payment increases approximately $1.00 per month.

Charles Moore
5 years 2 months ago

Actually the example is not correct. A husband and wife retired on Social Securitty with an income of $24,000 of Security and other income of $14,000 will not pay $1800 in taxes. They will have two standard exemptions of 3650 for 7300 and a Standard decuction of $11,800 for total a total of $19,100. Social Security is taxable on a joint return at $32,500 and in this case the formula would exempt the $24,000 in SS and tax only the $14,000 in other income and the $19,100 would offset it. resulting in no taxes.

Neil larson
5 years 2 months ago

What do you mean double taxed. Hell! We are already being doubled taxed. My wife is on Social Security/Medicare. She has to pay for Medicare benefits, plus She has to file taxes on her Social Security. I am getting close to retirement and it hits us big time. I thingk Congress should take a damned good look at the people who have been receiving welfare benefits, who have never worked, accept for raising more kids to collect more money, and the pork barrel spending. Thank you very much LBJ (1965) for getting rid of poverty. Yeah–Right!! All it has done is get rid of the middle class, increased burden on the middle class and the people who have built America!

julia fanning
5 years 2 months ago

Double taxes Social Security recipents is an unjustice to all that have worked all their life paid into the
fund to live on after no longer able to
work. Has our government grown so
cold and greedy not to care about its
own people. Stop getting government
raises and helping other countries and concentrate on rebuilding America and taking care of the elders
with giving them all they have worked
for. I liked the statement about God
only asking for 10% of our income, no
more or no less, but not taking more
than we have.

pat
5 years 2 months ago

I think this income tax on Social Security benefits is the fault of the biggest liberal of all time Ted Kennedy. We paid taxes on the money in the form of Social Security tax – now we pay tax again when we get it back… as my grandson would say, ” UNBELIEVABLE”…..

B. Roberts
5 years 3 months ago
It’s NOT just Social Security taxation, but the entire tax system that is part of the problem. If God can run the entire universe on 10% (the amount Christians are asked by Him to pay on their earnings) then the government needs to consider doing likewise. Tax should have NOTHING to do with: marital status age gender If a wealthy person is taxed 10% (or 15 or even 20%) and a poor person is taxed the same proportion on their income, THEN the tax is FAIR!! Each and every taxpayer is taxed an equal portion of his/her earnings whether it’s 10, 15 or 20 % (there SHOULD BE a maximum percentage ceiling). Providing for my ‘old age’ is NOT, NEVER has been, NEVER will be government’s job. That is MY job. If I fail to prepare for it, then I prepare to and deserve to fail. I just retired in… Read more »
GlynisS
5 years 3 months ago

2 Chronicles 7:14, “if My people who are called by My name will humble themselves, and pray and seek My face, and turn from their wicked ways, then I will hear from heaven, and will forgive their sin and heal their land.”

S. Mangus
5 years 3 months ago
I have personally seen SS in action… whenever you go to one of their offices all you see are immigrants (probably illegals) waiting their turn to get money…they didn’t put into the system in the first place. I also know someone who worked very hard all his life and now needs support from ss system because he is handicapped. Then there are the younger generation…I am embarrassed to say they want a free ride in life & produced a child to get free money from the system or to work under the table to get extra money… this is not right… I am now ready to consider retiring in the next few years…although I’m going to hold out as l-o-n-g as possible to get as much out of this system as possible… I hear that ss will be retaxing this money I’ve put into the system for lots of years…this… Read more »
LMH
5 years 3 months ago

You have omitted telling that if you have other income, your SS pay will be reduced significantly. Then it will also be taxed.

B. L. C.
5 years 3 months ago

Obama Care in action. Tax, tax, tax. I hope all retired people think about what this president is doing come election time in 2012.

Tricia
5 years 3 months ago
I had a micro- mini business before retirement. As self-employed, I paid FICA (SS) TWICE as employee AND employer. However, only the employee amount is figured for my SS payment. Since my SS check, (after it is INCOME TAXED AGAIN and after paying a hefty Medicare premium each month)—leaves very little to live on and with no COLA for 2 years (because prices haven’t gone up?!?) the next step would be to get a part-time job to supplement. But, who will hire a someone over 65 with so many younger folks unemployed? If I am fortunate enough to get a job, they WILL take FICA (or SS) out of my paycheck, demand income tax on the NET pay I receive, BUT MY SOCIAL SECURITY CHECK WILL NEVER INCREASE since it was set in stone when I started receiving it. Do the math—it doesn’t pay to get a part-time job. I… Read more »
Victoria DeLacy
5 years 3 months ago

It’s absolutely disgraceful. While Congressmen with six-figure incomes got raises last year, I have to make do with no cost of living increase on my Social Security check these past 3 years while food costs continue to skyrocket – HOW am I supposed to continue to make ends meet?

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