>Under the current law, Social Security benefits are not taxable for single taxpayers if annual income plus 50% of Social Security benefits equals $25,000 or less for singles or $32,000 or less for married couples. Once income and benefits reaches the threshold, singles with income between $25,001 and $34,000 and married couples earning between $32,001 and $44,000 are taxed on the lesser of half the value of benefits or half the value of income above those thresholds, according to Washington-based legal publisher BNA.
>Then, a “second-tier” tax kicks in, taxing up to 85% of benefits for singles earning more than $34,000 and married couples earning more than $44,000, a tax that was added by the Revenue Reconciliation Act of 1993. Weldon’s bill seeks to repeal the “second-tier” tax.
>Several other House members have introduced bills this session that would repeal the 1993 increase. Additionally, Senators Evan Bayh (D-Indiana) and Gordon Smith (R-Oregon) sponsored a similar measure (S 767) in the Senate.
>The second half of the bill proposes to push the age for required minimum distributions from pension plans, IRAs, and Roth IRAs, from the current 70 1/2 to 80. While similar bills have been seen before, Weldon’s is the first to propose that it be pushed back to age 80.
Last session, the House Ways and Means Committee passed a bill that would phase-in such a postponement to reach age 75 in 2007. Further, Representatives Rob Portman (R-Ohio) and Ben Cardin (D-Maryland) are cosponsoring a similar a bill that includes a similar phase-in making 75 the age at which distributions must commence by 2010.
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