Tax News Archive:

House approves Social Security Benefits Tax Relief Act of 2000

The House passed the Social Security Benefits Tax Relief Act with a vote of 265 to 159 on July 27th, 2000 with the president threatening a veto. This piece of legislation would repeal the 1993 measure that increased the percentage of social security benefits being taxed from 50% to 85%. The republicans feel that the measure was taken because of the deficit reduction act of 1993, and now that the deficit no longer exists, this measure should cease to exist. The democrats on the other hand feel that the repeal would threaten the funding of the Medicare trust fund, which draws revenues that exist because of this measure. President Clinton, who threatened the veto, added," "I am disappointed that the Republican Congress continues to strip away our fiscal discipline bill-by-bill by passing another in a series of costly tax cuts that, taken together, will spend our entire hard-earned surplus."

In lieu of the bill, Democrats had purposed another solution to the House. By increasing the income limit from $44,000 to $100,000 for married couples and $80,000 for single individuals who would be taxed under this measure but Republicans didn’t agree. This proposal had maintained the 85% tax limit on the proposal while the Republicans were adamant about rollback to the 50% tax limit on the social security benefits that existed before the deficit reduction act of 1993. The President at the end of his statement once again reiterated, ""This is the wrong approach. We can maintain our fiscal discipline while providing targeted tax relief to help families pay for college, long-term care, childcare, build and modernize schools, and save for retirement. In the interest of fiscal responsibility, I will veto this legislation that threatens our ability to pay down the debt, strengthen Medicare and Social Security, and invest in education."