Fact check: Biden voted to tax Social Security, wants to reform retirement benefits

Chelsey Cox and Anna Staver, USA TODAY
·6 min read

The claim: Biden voted in favor of taxing Social Security

Democratic presidential candidate Joe Biden's tax plan remains a sticking point for some voters. A ​​​​​​meme posted to Facebook on Sept.​ 15 says Biden is no friend of working folks because of his voting history on taxes, such as his vote for a 1983 bill authorizing a 50% tax on Social Security.

The former senator from Delaware was also the deciding vote in raising the Social Security tax rate to up to 85% in 1993, according to the meme.

"His voting record on Social Security records over the years is one slap in the face to retirees after another," says the claim. "Now he wants to tax our 401k's and IRA's ... and he also wants to introduce a 3% annual tax on our homes."

USA TODAY reached out to the user for comment.

Another Facebook post calls into question Biden played in drafting the 1983 changes. The post's author, who did not respond to a request for comment, claimed Biden was behind the tax increase, writing: "Social Security wasn’t Taxable until Joe Biden wrote a bill and passed it to Tax Social Security Choose Wisely Nov. 3rd"

More: Fact check: Biden tax plan would raise rates for those who make more than $400K, corporations

Reagan-era changes to Social Security

The Social Security Amendments of 1983, which led to its taxation, is such a contentious topic on the internet that the Social Security Administration added it to its list of myths and misinformation.

The tax was one of several significant changes to Social Security that Congress passed in "an overwhelmingly bipartisan vote," according to the Social Security Administration's website. The law postponed cost-of-living increases, put federal workers into the system, raised the retirement age and taxed up to 50% of a person's Social Security income if he or she met certain income thresholds.

The ideas to "save Social Security" came from a bipartisan commission Republican President Ronald Reagan created two years earlier after learning the fund was in danger of running out of money, according to a Brookings Institute article.

Reagan called it "a monument to the spirit of compassion and commitment that unites us as a people," and the deal has been hailed as one of the great political compromises of the 20th century.

In fact, President Barack Obama referred to it during the 2012 presidential debates, saying Social Security needed a new bipartisan deal.

Social Security benefits were "explicitly excluded" from federal income taxation before Reagan signed the amendments into law, according to the SSA. Up to 50% of benefits could be added to taxable income based on certain income thresholds from 1984, onward.

A provision of the 1993 Omnibus Budget Reconciliation Act raised the Social Security tax rate from 50% to 85% for households in a higher income bracket. The act was Democratic President Bill Clinton's first budget and marked the highest peace-time tax increases on high-income earners in U.S. history up to that time, according to the University of California, Berkeley.

What was Biden's role?

Biden was a U.S. senator from Delaware, but he wasn't one of the senators on the commission, according to a list of members from the Social Security Administration. The agency also had an online copy of the commission's recommended changes, which included "taxation of benefits for higher-income persons."

There's no evidence to support the claim that Biden wrote the bill. In fact, it was introduced in the House by a Democratic representative from Illinois, Dan Rostenkowski.

Biden voted for the bill when it came to the Senate, and it passed 88-9.

GovTrack, a government transparency website, recorded Biden's yea vote on the 1993 Act.

Individuals who report a combined income between $25,000 and $34,000 may be liable for income taxes for up to 50% of Social Security benefits. For joint filers, the bracket is $32,000 to $44,000. Those whose earnings match or exceed the upper tier of each bracket could pay tax on up to 85% of benefits, according to the SSA.

Did Biden propose taxing 401(k)s and IRA's?

The claim alleges the Biden campaign proposes taxing retirees' 401(k)s and IRAs in addition to a 3% federal tax on property.

"It's on page 78 of the Dems' platform," says the meme.

But there's no indication of proposed taxes on 401(k) or IRA retirement accounts on Biden's official campaign website. The Democratic presidential nominee said he wants to equalize retirement plan tax benefits across the income scale, according to the Biden campaign.

Biden would accomplish this by eliminating the current deduction for contributions while providing a 26% refundable tax credit for each dollar contributed to a traditional retirement account, according to The Tax Foundation. The tax credit would be deposited into the retirement account as a matching contribution.

Aside from raising taxes on families in the top tax bracket, other proposed tax policies include raising the corporate tax rate from 21% to 28%, a 15% minimum tax on book income "so that no corporation gets away with paying no taxes," asking families earning over $1 million to pay wage and investment income taxes at the same rate and instituting a true minimum tax on U.S. companies' foreign earnings while penalizing corporations that outsource jobs overseas.

More: Fact check: National property tax isn't part of Joe Biden's plan

The part of the claim stating Biden would propose a 3% federal property tax has already been debunked by USA TODAY. Property taxes are collected at the state and local level, according to the article.

Our rating: Partly false

We rate this claim PARTLY FALSE, based on our research. As a senator, Biden voted in favor of two laws that authorized taxation of Social Security benefits. But Democratic presidential nominee Biden has not proposed taxing retirement accounts or a federal property tax.

Our fact-check sources:

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This article originally appeared on USA TODAY: Fact check: Joe Biden OK'd Social Security taxes, wants savings reform

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