Under the Formula for Taxing Social Security Benefits, Low-Income Taxpayers

question 28

Essay

Under the formula for taxing Social Security benefits, low-income taxpayers are not required to include any of the Social Security benefits in gross income. But as income increases, 50% of the Social Security benefits may be included in gross income. Further increases in income will cause as much as 85% of the Social Security benefits being subject to tax. Does this mean that the taxation of Social Security benefits is more or less progressive than the taxation of other types of income?

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