Congress Should Stop Taxing Seniors Who Want to Work

Click for audio Congress Should Stop Taxing Seniors Who Want to Work

These days, it's hard to find a jobless worker in Michigan. State unemployment rates well below the national average have employers scrambling just to find enough talented people to fill the growing number of new jobs.

Fortunately for businesses in need of skilled employees, there are over one million underemployed but experienced workers in Michigan who could help. But unfortunately, Congress punishes any of them who try.

Who are these workers? They're senior citizens—retirees 65 years or older who receive Social Security benefits, but who also lose those benefits if they stay on the job.

According to a formula known as the "earnings test," working seniors earning over $15,000 per year lose one dollar of Social Security benefits for every three dollars they make. Seniors are in effect taxed extra for remaining active in the workforce.

The earnings test began during the Great Depression, when unemployment reached 25 percent and Congress wanted more seniors to retire in order to free up jobs for younger workers.

Today, employers cannot hire skilled workers fast enough, but experienced seniors are often forced to sit idle. Congress should repeal the earnings test and stop taxing seniors who want to continue working.

For the Mackinac Center, this is Joseph Lehman.

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