Summary of Provisions That Would Change the Social Security Program

Solvency Provisions	Description of Proposed Provisions: Provisions Affecting Taxation of Benefits

Estimates based on the intermediate assumptions of the 2010 Trustees Report

		Long-range actuarial balance	Annual balance in 75th year	Long-range actuarial balance	Annual balance in 75th year
		Change from present law		Results with this provision
	Present Law, Alternative II.			-1.92	-4.12
H1	Tax Social Security benefits in a manner similar to private pension income beginning in 2011. Phase out the lower-income thresholds during 2011-2020. graph \| table \| pdf-graph \| pdf-table \| memo	0.28	0.18	-1.64	-3.94
H2	Tax Social Security benefits in a manner similar to private pension income beginning in 2011. Phase out the lower-income thresholds during 2011-2030. graph \| table \| pdf-graph \| pdf-table \| memo	0.26	0.18	-1.66	-3.94
H3	Tax Reform for Individuals: For personal income tax, establish in 2012 a 2-bracket approach with marginal rates of 15 and 27 percent separated at $51,000 (CPI indexed) for 2012 and later, with a non-refundable credit for low-income tax filers age 65 and older. Capital gains would be treated as regular income. All Social Security benefits would be taxed starting 2012 at the applicable marginal rate (15 or 27) less a non-refundable credit of 7.5 percent. Revenue to OASDHI would be based on the net marginal rates of 7.5 and 19.5 percent, with 40 percent of revenue dedicated to HI. graph \| table \| pdf-graph \| pdf-table \| memo	-0.01	-0.06	-1.93	-4.17


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