Effects of Taxation of Social Security Benefits on Portfolio Revisions

The taxation of social security benefits is intertwined with the investment in tax exempt interest: the greater the tax exempt interest, the greater the chance that benefits will be taxed. In fact, some have argued that the tax is, in effect, a joint tax on social security benefits and tax exempt in...

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Bibliographic Details
Published in:The Journal of risk and insurance 1987-12, Vol.54 (4), p.737-751
Main Author: Lipka, Roland
Format: Article
Language:English
Subjects:
Bond markets
Deferred income
Financial portfolios
Income
Income taxes
Investment tax credits
OASDHI
Portfolio investments
Securities markets
Social security
Social Security benefits
Tax benefits
Tax exempt bonds
Tax exempt securities
Tax payments
Tax rates
Taxable income
Taxation
Taxpaying
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Summary:The taxation of social security benefits is intertwined with the investment in tax exempt interest: the greater the tax exempt interest, the greater the chance that benefits will be taxed. In fact, some have argued that the tax is, in effect, a joint tax on social security benefits and tax exempt interest. This paper demonstrates that, although the returns from tax exempt interest are reduced on an absolute basis, they have increased relative to taxable returns.
ISSN:0022-4367
1539-6975
DOI:10.2307/253120