Tax Relief Bill Doesn't Do Enough For Seniors (Press Release)

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Tax Relief Bill Doesn't Do Enough For Seniors (Press Release)

Alexandria, VA (July 2, 2001) Few seniors will benefit from The Tax Relief Act recently signed into law by President Bush, not even from a highly publicized $300 tax rebate. The legislation does not repeal a 1993 law that can subject up to 85% of Social Security benefits to tax, and the tax legislation's passage has put a Medicare prescription drug benefit in doubt.

Although the new law reduces tax rates and creates a new 10% tax bracket, "Many middle to lower-income seniors will not receive the $300 rebate because their Social Security benefits are not counted as taxable income," says Virginia Torsch, Director of Legislative Affairs for TREA Senior Citizens League (TSCL). "For high income beneficiaries a portion of their Social Security benefits does count as taxable income, but they receive little tax relief because the law that subjects up to 85% of their Social Security benefits to tax was not repealed," Torsch notes.

"Unless a senior couple has $12,000 or more in taxable income or an individual has $6,000 or more, they might only receive a reduced tax rebate, or none at all if they do not currently pay taxes," Torsch says. "A senior couple might have as much as $37,250 in gross income including Social Security and still not receive a full rebate." On the other hand, for seniors with incomes that exceed $44,000 for couples and $34,000 single filers, up to 85% of their benefits may be taxable. This adds thousands in extra taxable income. It may also bump taxpayers into higher tax brackets making their tax rate higher. Although tax rates are slated for reduction, they will be not be fully phased in for another five years, in 2006.

The Tax Relief Act also makes adding a prescription drug benefit to Medicare more difficult. New figures from the Congressional Budget Office indicate that Congress faces budget constraints considerably tighter than expected. The new figures will test lawmakers' willingness to stand by a pledge not to use the Medicare Trust Fund surplus for any other spending. "The fiscal 2001 budget set aside $300 billion to add a prescription drug benefit to Medicare. Seniors should contact their Members of Congress now to insist that they deliver on their promise of more affordable prescription drugs," Torsch urges.

TSCL is a national group of politically active seniors concerned about the protection of their earned Social Security, Medicare, military, and other retirement benefits. TSCL members participate in a number of grassroots lobbying and public education campaigns to ensure governmental bodies, including the Social Security and Health Care Financing Administrations, live up to their commitments.

For more information, send $1.00 for shipping and handling to: TREA Senior Citizens League, Dept. W10603, 909 N. Washington St., Suite 300, Alexandria, VA 22314, or visit our website at:www.tscl.org.