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Can We Tax Social Security Benefits More Efficiently?, No. 17-11

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Can We Tax Social Security Benefits More Efficiently?, No. 17-11

DATE: November 2017

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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.

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Fessenden, Helen , Jones, John Bailey and Federal Reserve Bank of Richmond. "Can We Tax Social Security Benefits More Efficiently?, No. 17-11," Economic Brief (November 2017). https://fraser.stlouisfed.org/title/6034/item/583966, accessed on June 6, 2023.

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