3.5%. Benefit Rise Set Under Social Security: Inflation Indexing to ...
3.5	percent next year and Social Security taxes will also rise, the government said yesterday, but income taxes will fall slightly as the tax code for the first time is automatically indexed to offset the effects of inflation.</br></br>The Office of Management and Budget also said that under existing law, about 3.5 million federal civilian and military retirees will get a 3.5	percent cost-of-living increase in their pensions in January. A similar increase will go to recipients of veteransÛª pensions.</br></br>Both the Social Security and income tax changes are automatic under existing law, but their extent became known yesterday when in-</br></br>Under indexing, the standard deduction, personal exemption and cutoff figures for each tax bracket will be increased 4.08 percent for the taxable year 1985. This means that the $2,300 standard deduction for an individual will go up to $2,390; the figure for a couple will go up from $3,400 to $3,540. The $1,000 personal exemption for each member of a family will go up to $1,040.</br></br>For many taxpayers, however, the savings from indexing will be offset by higher Social Security taxes.