Rep. Angie Craig (D-Minn.) has introduced a bill to eliminate federal taxes on Social Security income, beginning in 2025, Kiplinger Consumer News Service reported.

The bill would be paid for by raising the cap on the Social Security payroll tax, so higher-earning Americans would continue paying into Social Security, Craig said in a statement.

“This bill is a win-win—it's a tax cut for seniors and a way to ensure more Americans can depend on the Social Security benefits they’ve earned,” said Craig in the statement. “And on top of that, it’s fiscally responsible.”

Craig was referring to an analysis by the Social Security Administration’s Office of the Chief Actuary that said that her bill would allow all payments to be made on time and in full through 2054—20 years longer than the current projection of 2034.

That analysis also found that passing the proposed legislation would reduce federal debt over the next several decades by $8.9 trillion, as eliminating the tax on Social Security benefits would be paid for by increasing taxes on higher earners.

The proposed legislation calls for increasing the Social Security wage base from its current $168,600 to more than $250,000, meaning that high earners could pay the 6.2 percent payroll tax on nearly $100,000 more of their wages, according to Kiplinger.

The proposed legislation would apply only to federal income tax so, even if Craig’s bill becomes law, some retirees will still pay state income tax on Social Security income. Only nine states still tax Social Security as of 2024, including Craig’s home state of Minnesota.

Currently, up to 85 percent of Social Security benefits are taxable at the federal level.