Social Security tax elimination: Why Trump’s campaign promise didn’t make the cut

During last year’s presidential campaign, Trump made many promises to get the votes he needed to be re-elected. One such promise was that he would eliminate federal taxes on Social Security benefits.

Even after being re-elected, Trump repeatedly vowed in his 2025 State of the Union address: “I’m calling for no tax on tips, no tax on overtime, and no tax on Social Security benefits for our great seniors.”

But that doesn’t seem to be on the table now, especially since there’s no mention of it in his mega tax reform bill, which he dubbed the “One Big Beautiful Bill Act.”

According to a report on SILive.com’s sister site, Al.com, a Social Security tax cut failed to make it into the “big bill” for several reasons, including:

• Budget Rules — Senate budget reconciliation rules do not allow for big changes to Social Security programs within a tax bill. In fact, the “Byrd Rule,” named after former Sen. Harry Byrd of Virginia, prohibits certain provisions in reconciliation bills, according to the Al.com report by Kiplinger Consumer News Service and Tribune News Service. While Congress has the power to change spending and revenue measures, it has limited ability to alter benefits or funding related to Social Security.
• Fiscal Impact: A Penn Wharton Budget Model warns that axing taxes on Social Security benefits would decrease federal revenue by about $1.5 to $1.6 trillion over a decade. Some analysts say this could lead to the Social Security trust fund running out. As it is, the June 2025 Trustees Report predicts Social Security Trust Funds will run out by 2034.

If this happens, experts say incoming payroll taxes would only cover roughly 80% of scheduled benefits. That would likely lead to reduced payouts for retirees unless Congress steps in.

However, Rep. Nicole Malliotakis, a Republican representing Staten Island and parts of South Brooklyn and a member of the House Ways & Means Committee, said one way to address the reconciliation process is a bill she sponsored that made it into the package.

It provides a deduction that would eliminate social security tax liability for seniors with adjusted gross incomes of $75,000 or less or $150,000 if filing as a married couple. “And the $6,000 deduction per senior ($12,000 deduction if married) phases out as income increases,” she said.

“This is no tax on social security because it eliminates what seniors would otherwise pay on their benefits,” added the congresswoman.

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