Citizens for Tax Justice
1311 L Street, NW
Washington, DC
 Friday, July 21, 2000
Contact: Bob McIntyre, Michael Ettlinger,
202/626-3780
House-Passed Social Security Tax Cut Benefits Few Elderly Taxpayers

Click here to see this analysis in PDF format.

The Social Security tax cut passed by the House on July 27 in HR 4865 would provide tax relief to only a minority of Social Security recipients, according to a July 28 CTJ analysis. An analysis released by the group shows that only 23 percent of Social Security recipients would receive any benefit from the House-passed plan. Over 28 percent of the benefits would go to the wealthiest five percent of taxpayers. The average tax cut for Social Security recipients in the top 10 percent of the income distribution would be $1,873, compared to a $1 average tax cut for those in the bottom 60 percent.

"The fact that three-quarters of all Social Security recipients won't see a dime from this tax cut shows the real priorities of the GOP architects of this plan," said CTJ Tax Policy Director Michael Ettlinger.

Effects of the GOP Plan to Reduce Taxes on Social Security Benefits for Better-Off Retirees
(Annual effects at 1999 income levels)
Income Group (All Taxpayers) Income Range Average Income # with Social Security (000) # with tax cut under GOP Plan (000) % of Social Security recipients with tax cut Tax Cut (billions) Average tax cut for all Social Security recipients % of Total Tax Cut
Lowest 20% Less than $13,600 $ 8,600 6,111 — — $ — $ — —
Second 20% $13,600–24,400 18,800 6,040 — — — — —
Middle 20% $24,400–39,300 31,100 5,794 70 1.2% –0.0 –3 0.3%
Fourth 20% $39,300–64,900 50,700 4,756 2,258 47.5% –1.2 –242 16.2%
Next 15% $64,900–130,000 86,800 2,879 2,852 99.1% –3.9 –1,359 55.0%
Next 4% $130,000–319,000 183,000 775 755 97.4% –1.5 –1,956 21.3%
Top 1% $319,000 or more 915,000 186 185 99.5% –0.5 –2,736 7.2%
ALL   $ 50,800 26,598 6,121 23.0% $ –7.1 $ –268 100.0%
ADDENDUM
Bottom 60% Less than $39,300 $ 19,500 17,945 70 0.4% $ –0.0 $ –1 0.3%
Top 10% $92,500 or more 218,000 1,833 1,806 98.5% –3.4 –1,873 48.2%
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