Scaling back the taxation of Social Security benefits, as some lawmakers in both parties have proposed, would be unwise. Social Security faces a long-run financial shortfall estimated at 2.78 percent of payroll subject to the Social Security payroll tax, or roughly 1 percent of gross domestic product. Unless changes are made, the program’s trust funds will be depleted in 2035, at which time revenues will cover only about three-quarters of scheduled benefits. Reducing the taxation of benefits would require raising Social Security payroll taxes or cutting Social Security benefits more than would otherwise be necessary to ensure adequate financing. These benefit cuts or tax increases would likely fall in part on low- and moderate-income beneficiaries. Moreover, making a smaller portion of benefits subject to tax would primarily help higher-income beneficiaries, making the Social Security program less progressive.