Utah Rep. James Hansen is to be commended for trying to do right by older Americans who would like to keep working after they reach retirement age.
Incredibly, it's a reform that Congress keeps resisting even though the proposal would eventually produce higher revenues as well as striking a blow for fairness and the work ethic.Hansen has joined with 30 other House members in introducing the Older Americans Freedom to Work Act, which would repeal the Social Security Earnings Test - a restriction that made sense during the Great Depression but was outmoded long ago.
Under that restriction, retirees between 65 and 69 who make more than $9,720 a year must forfeit $1 in Social Security benefits for every $3 they earn over the limit. After age 69, there is no benefit reduction when a Social Security recipient has a job.
The objective of the restriction was to keep older Americans from taking jobs away from young people who needed the work more during the depression. Fair enough. But the upshot currently is to force a senior citizen making $10,000 a year to pay a tax rate of nearly 56 percent, almost twice that of millionaires. Nothing's fair about that.
At present, about 750,000 retired workers between 65 and 69 report some outside earnings. But they lose a total of $4.8 billion a year because of the Social Security Earnings Test.
Repealing the earnings test would increase the gross national product as it increased personal incomes along with the taxes paid by working senior citizens and their employers. The upshot would be to increase the government revenue by an estimated $4.9 billion, more than offsetting the losses from the repeal being pushed by Rep. Hansen and his colleagues.
Any way one looks at it, the present penalty is just plain wrong. Congress has been aware of this for many years and should not be allowed to get away with continued stalling on the proposed repeal. Let's welcome senior citizens into the work force and stop driving them out.