Millions of Americans received a special greeting in their email on July 3, 2025. It wasn't an awkward "Happy Fourth of July" message, something I don't expect any federal agency or department to spend money composing and sending. Instead, it was arguably one of the largest – but likely not the last – federally funded gaslighting efforts ever undertaken. Here is the full content of the message.
The message was thus an attempt by an agency within the Administrative Branch to praise its leader by spending federal resources to mislead American taxpayers and Social Security recipients about the tax bill being signed into law on July 4, 2025.
The message states the new tax bill will ensure "nearly 90%" of Social Security beneficiaries will not longer pay federal income taxes on their benefits. That sounds like a sweeping change creating a significant net improvement in the financial condition of millions of Americans. Those who believe this propaganda are either highly uninformed about the actual tax code related to Social Security benefits, are uninformed about the income demographics of most Social Security recipients or are completely innumerate.
Here's the quickest way to dissect this financial and political gaslighting effort.
First, as of May 2025, the average yearly Social Security income paid to retired workers is $24,028 per year. Under the prior tax code, the portion of Social Security income subject to federal income taxes was governed by a set of brackets based on filing status and absolute amounts that for 2024 boiled down to this:
It takes some staring and possibly some Excel spreadsheet experimentation to comprehend all of the quirks of this particular set of rules but a few simple scenarios illustrate the most crucial points:
- Without any other income, a single filing status retiree collecting the average $24,028 in Social Security Income already pays zero federal income tax on that income.
- Without any other income, a single filing status retiree earning $34,000 in Social Security only pays federal income taxes on $9000 of that Social Security ("the smaller of 50% of paid SS or the portion of modified adjusted gross income exceeding $25,000")
And that final taxable amount of income is then still subject to standard or itemized deductions which is $15,000 for 2025 so there would STILL be zero taxable income.
For a retiree to be receiving significantly more than the average of $24,028 in yearly SS income, their earning history likely had significantly higher wages and salary so it is likely these retirees have additional sources of income, likely 401k / IRA distributions or (less likely today) pension payments. If a single filer retiree has $36,000 in Social Security income and $36,000 in other income, the rules above result in a modified adjusted gross income of $72,000, so their taxable SS is the lesser of 85% of SS ($30,600) or 85% of ($72k - $34k) or $32,300. Their net taxable income before deductions is thus $30,600 + 36,000 or $66,600. Assuming a standard deduction of $15,000, their taxable income is $51,600 with a tax bill of $6,266.00.
So what does the new tax law actually SAY?
It doesn't say that Social Security income is no longer taxed. It provides an additional DEDUCTION, which is only available for filers OLDER than age 63, which is PHASED OUT as total earnings exceed $75,000 (single) or $150,000 (joint) and is zeroed out after earnings reach $175,000 (single) or $250,000 (joint).
Given those rules, this change means NOTHING to those already paying no federal taxes on Social Security income (estimated at 62 percent of all recipients by the White House itself). For those earning enough to actually pay any income tax on Social Security income, the net reduction in taxes can be loosely swagged at $6000 times the marginal tax rate. The delta may be larger for incomes that are right at a boundary point between marginal tax rates. In the example above of a single filer retiree with $36,000 in SS and $36,000 in other income, their taxable income would drop from $51,600 to $45,600, lowering their tax bill by $1,032.50 from $6266 to $5233.50.
There might be IRS statistics somewhere that might lend themselves to sorting payers into overall taxable income buckets then further sorting into divisions base upon SSI versus non-SSI income that could be used to more precisely calculate the nothingburger-ness of this change in the tax code. However, it's not difficult heuristically to point out the zen level of financial misdirection intended by this new "benefit." While Social Security retirement payments are based not just on income TAXED for FICA but ALL income earned through wages and salary, it still takes significant yearly earnings in one's history to earn, say, $36,000 per year in Social Security unless payments are deferred until age 70. If the recipient can wait until age 70 to begin payments, it seems obvious they have other income to draw that makes the tax burden on Social Security income immaterial to them.
This change in the tax code wasn't included to provide meaning financial relief to low-income seniors forced to make hard decisions between utility payments and eating something for dinner. Any taxpayer facing those choices is ALREADY paying no taxes on what little Social Security income they are getting. This provision was included in the bill to provide a talking point the majority of the media and public would never decode and allow Republicans to reduce time spent analyzing the REAL intent of the bill and its REAL consequences. The INTENT of this bill is to redistribute trillions of dollars from programs benefiting the entire population into the pockets of the wealthiest one percent of the country. The CONSEQUENCES of this bill are far-reaching and already happening. Roughly seventeen million people will lose Medicaid benefits, leading to more medical care being provided via vastly more expensive emergency channels rather than preventative channels. Not paying for required healthcare doesn't save ANY money. It only pushes problems into emergency rooms, which bankrupts hospitals with unpaid bills that result in entire communities suffering a loss of medical services.
This isn't theoretical. It's already happening in anticipation of this new bill. Here's a press release from July 2, 2025 from a hospital in Curtis, Nebraska.
https://chmccook.org/community-hospital-announces-closure-curtis-medical-centerHere's a quote from the CEO of the hospital:
Unfortunately, the current financial environment, driven by anticipated federal budget cuts to Medicaid, has made it impossible for us to continue operating all of our services, many of which have faced significant financial challenges for years. We remain committed to supporting our patients through this transition and ensuring continuity of care.
Ah, but that's just one anecdote, right? Wrong. Here is a more comprehensive analysis published by Becker's Hospital Review that concludes 760 rural hospitals are at risk of closure and forty percent of them at risk of IMMEDIATE closure:
https://www.beckershospitalreview.com/finance/760-hospitals-at-risk-of-closure-state-by-state/The risks are chilling. Here's the takeaway from the top of the story.
The count is drawn from the Center for Healthcare Quality and Payment Reform’s most recent analysis, based on hospitals’ latest cost reports submitted to CMS and verified as current through June 2025. The analysis identifies two distinct tiers of rural hospital vulnerability: those at risk of closure and those facing an immediate risk of closure.
In the first category, nearly every state has hospitals at risk of closure, measured by financial reserves that can cover losses on patient services for only six to seven years. In over half the states, 25% or more of rural hospitals face this risk, with 11 states having a majority of their rural hospitals in jeopardy.
The report also analyzes hospitals facing immediate threat of closure, meaning financial reserves could offset losses on patient services for two to three years at most. Currently, 314 rural hospitals are at immediate risk of shutting down due to severe financial difficulties.
All of this makes the tone of this email sent by the Social Security Administration far more ominous. Until 2025, the closest America came to the type of stupefying, brain-dead, bureaucratic servitude seen in authoritarian regimes like North Korea was the practice of hanging creepy photos of the current President on walls in Post Office lobbies and other federal offices. Maybe those were put there just to remind the workers what the boss looked like. Maybe those photos were hung to remind citizens that much of the bureaucracy they were about to experience was dictated by politics, not productivity and that ultimately a politician is in charge at the top who is replaceable.
Until 2025, government departments were not prone to proactively communicating with MILLIONS of citizens in REAL TIME about legal or administrative changes taking place, even if those affected that department's daily mission. Until 2025, no government department sending such a communique to such a large base would use such blatantly political language to convey a message, much less such a misleading message. It isn't the Social Security Administration's job nor that of its Administrator to term a bill a "landmark piece of legislation" or characterize a change as "meaningful." It's the department's job to clearly explain the law and accurately comply with it without spin or faux gushing excitement.
If the Trump Regime wanted to accelerate the sense of creepy chaos and the destruction of any confidence in government operations to trigger even more apathy and passivity, this email from the Social Security Administration is a textbook example of a winning technique from the Hitchhiker's Guide to Authoritarianism.
WTH
