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Elon Musk and Donald Trump feud revived in ‘Big Beautiful Bill’ vote<\/p>\n
Elon Musk took to X to threaten any lawmakers who vote for President Donald Trump’s sweeping spending bill.<\/p>\n
Many people, such as President Donald Trump<\/a> and many members of Congress, are excited about what they refer to as the “Big Beautiful Bill.” Others are not happy at all. Part of the problem is that while some parts of it can seem beautiful, they have meaningful drawbacks.<\/p>\n Consider Social Security<\/a>. The White House issued a statement on July 1 saying that “Under the One Big Beautiful Bill, the vast majority of senior citizens \u2014 88% of all seniors who receive Social Security \u2014 will pay NO TAX on their Social Security benefits, according to a brand new analysis from the Council of Economic Advisers.”<\/p>\n Here’s a look at whether you might be among the 88% \u2014 and whether you should be delighted about it. (Spoiler: You may want to put away the confetti and noisemakers.)<\/p>\n Taking a closer look at the ‘One Big Beautiful Bill’ on Social Security<\/p>\n So, having 88% of Social Security recipients exempt from taxation on their benefits sure sounds great. But here are some things to know:<\/p>\n It’s also worth noting that this is all related to federal taxation of Social Security benefits. Nine states\u00a0tax Social Security<\/a> to some degree. It’s often done with a light hand, though, and many folks in those states will pay no tax at all.<\/p>\n Who qualifies for the new tax-shrinking deduction?<\/p>\n According to the version of the bill that was approved by the Senate on July 1, the $6,000 tax deduction would apply to those aged 65 and older who have individual modified adjusted gross income (MAGI)<\/a> of up to $75,000 \u2014 or married couples filing jointly with combined MAGI up to $150,000.<\/p>\n The deduction will shrink for those with incomes above those thresholds, and will be $0 once incomes reach $175,000 for individuals or $250,000 for married couples filing jointly.<\/p>\n What’s good and bad about the new lower taxation?<\/p>\n On the surface, this seems like good news, even if it doesn’t apply to everyone. For the many who will get the deduction, it’s hard to argue with paying less in taxes.<\/p>\n Here’s the rub, though: Social Security’s surplus is turning into a deficit<\/a>, and it’s been estimated that come 2034, there will only be enough money coming into the program (largely via taxes on workers) to pay beneficiaries 81% of what they’re owed<\/a>. This unwelcome scenario doesn’t have to happen, though because there are multiple ways to fix the problem<\/a>.<\/p>\n At the moment, though, there’s been relatively little talk about bolstering Social Security. And instead, it’s likely to get weaker \u2014 because if fewer seniors are paying taxes on their benefits, that will mean less money flowing into Social Security’s coffers. That could move the deficit’s appearance up to sooner than 2034, and it could result in seniors receiving even less than 81% of their benefits.<\/p>\n Thus, while offering a tax break sounds nice, the big picture is very worrisome. As my colleague Adam Levy has asserted, what really seems to be happening is that Trump and Congress are failing to protect Social Security<\/a>.<\/p>\n The Motley Fool has a disclosure policy<\/a>.<\/p>\n The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY.<\/p>\n Where to invest $1,000 right now<\/p>\n Offer from the Motley Fool: <\/b>When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor\u2019s total average return is 1,060%* \u2014 a market-crushing outperformance compared to 180% for the S&P 500.<\/p>\n They just revealed what they believe are the 10 best stocks<\/a> for investors to buy right now,\u00a0available when you joinStock Advisor.<\/p>\n\n