How Congress could make the tax code simpler and fairer with a handful of easy tweaks
Our 4,000-page (and growing) Internal Revenue Code is a horrible mess that needs to be cleaned up. Here are five changes I believe would be huge steps in the right direction — and the reasons why I doubt we will see them anytime soon.
Stop Double-Taxing Social Security Benefits
Did you know that you pay federal income tax on the Social Security tax that is taken out of your paychecks? Well, you do. Even worse: When you start receiving Social Security benefits, up to 85% of that money can be taxed again. This is double taxation folks. Retirees who are at very low income levels don’t have to pay this double tax, but those who are further up the retirement-age income scale get socked with it on anywhere from 50% to 85% of their benefits. Is it unfair? Of course! But your Congress likes this revenue stream and isn’t going to fix the problem until millions of seniors start demanding it.
CONTINUED at Smart Money.
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