Trump's Plan to Abolish Social Security Tax: Big Gains for Wealthy, Big Losses for Future Generations

In a bold move aimed at fulfilling a key campaign vow, US President Donald Trump is setting his sights on abolishing income taxes on Social Security benefits. This proposed shift stands to slash government revenues by an estimated $1.5 trillion across a decade. Moreover, forecasts suggest it could swell the federal debt by 7% come 2054. This initiative, while primarily advantageous to wealthier families, promises them potential gains nearing $100,000 throughout their lifetimes.

The repercussions of such a policy shift are not uniformly distributed. Specifically, younger individuals, especially those not yet born, are poised to bear the brunt of the negative impacts. The burgeoning federal debt coupled with diminished incentives for work and saving for retirement could spell significant financial disadvantages for this demographic. This contrasts starkly with the windfall high-income households might enjoy, underscoring the policy's skewed benefits distribution.

"Happens, may result in gains of up to $100,000 over the lifetimes of high-income households. In contrast, individuals under age 30 particularly people who have not yet been born may face the largest losses as the federal debt increases and incentives to work and save for retirement decline."

The anticipated changes underline a pivotal moment in US fiscal policy, with long-term implications for both government finances and the economic well-being of its citizens. As the nation grapples with these proposed adjustments, the debate over their fairness and fiscal sustainability is likely to intensify.