HR 107 IH

To amend the Internal Revenue Code of 1986 to repeal the 1993 increase in income tax on Social Security benefits, to repeal the earnings limitation on Social Security recipients, and to repeal the estate and gift taxes.

January 6, 1999

Mr. KNOLLENBERG introduced the following bill; which was referred to the Committee on Ways and Means

To amend the Internal Revenue Code of 1986 to repeal the 1993 increase in income tax on Social Security benefits, to repeal the earnings limitation on Social Security recipients, and to repeal the estate and gift taxes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Senior Tax Relief Act of 1999'.

SEC. 2. REPEAL OF 1993 INCREASE IN TAX ON SOCIAL SECURITY BENEFITS.

(a) IN GENERAL- Paragraph (2) of section 86(a) of the Internal Revenue Code of 1986 (relating to social security and tier 1 railroad retirement benefits) is amended by adding at the end the following new sentence:

`This paragraph shall not apply to any taxable year beginning after December 31, 1998.'

(b) CONFORMING AMENDMENTS-

(1) Paragraph (3) of section 871(a) of such Code is amended by striking `85 percent' in subparagraph (A) and inserting `50 percent'.

(2)(A) Subparagraph (A) of section 121(e)(1) of the Social Security Amendments of 1983 (Public Law 98-21) is amended--

(i) by striking `(A) There' and inserting `There';

(ii) by striking `(i)' immediately following `amounts equivalent to'; and

(iii) by striking `, less (ii)' and all that follows and inserting a period.

(B) Paragraph (1) of section 121(e) of such Act is amended by striking subparagraph (B).

(C) Paragraph (3) of section 121(e) of such Act is amended by striking subparagraph (B) and by redesignating subparagraph (C) as subparagraph (B).

(D) Paragraph (2) of section 121(e) of such Act is amended in the first sentence by striking `paragraph (1)(A)' and inserting `paragraph (1)'.

(c) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after December 31, 1998.

SEC. 3. REMOVAL OF LIMITATION UPON THE AMOUNT OF OUTSIDE INCOME WHICH A SOCIAL SECURITY BENEFICIARY MAY EARN WHILE RECEIVING BENEFITS.

(a) REPEAL OF PROVISIONS RELATING TO DEDUCTIONS ON ACCOUNT OF WORK-

(1) IN GENERAL- Subsections (b), (c)(1), (d), (f), (h), (j), and (k) of section 203 of the Social Security Act (42 U.S.C. 403) are repealed.

(2) CONFORMING AMENDMENTS- Section 203 of such Act (as amended by subsection (a)) is further amended--

(A) in subsection (c), by redesignating such subsection as subsection (b), and--

(i) by striking `Noncovered Work Outside the United States or' in the heading;

(ii) by redesignating paragraphs (2), (3), and (4) as paragraphs (1), (2), and (3), respectively;

(iii) by striking `For purposes of paragraphs (2), (3), and (4)' and inserting `For purposes of paragraphs (1), (2), and (3)'; and

(iv) by striking the last sentence;

(B) in subsection (e), by redesignating such subsection as subsection (c), and by striking `subsections (c) and (d)' and inserting `subsection (b)';

(C) in subsection (g), by redesignating such subsection as subsection (d), and by striking `subsection (c)' each place it appears and inserting `subsection (b)'; and

(D) in subsection (l), by redesignating such subsection as subsection (e), and by striking `subsection (g) or (h)(1)(A)' and inserting `subsection (d)'.

(b) ADDITIONAL CONFORMING AMENDMENTS-

(1) PROVISIONS RELATING TO BENEFITS TERMINATED UPON DEPORTATION- Section 202(n)(1) of the Social Security Act (42 U.S.C. 402(n)(1)) is amended by striking `Section 203 (b), (c), and (d)' and inserting `Section 203(b)'.

(2) Provisions relating to exemptions from reductions based on early retirement-

(A) Section 202(q)(5)(B) of such Act (42 U.S.C. 402(q)(5)(B)) is amended by striking `section 203(c)(2)' and inserting `section 203(b)(1)'.

(B) Section 202(q)(7)(A) of such Act (42 U.S.C. 402(q)(7)(A)) is amended by striking `deductions under section 203(b), 203(c)(1), 203(d)(1), or 222(b)' and inserting `deductions on account of work under section 203 or deductions under section 222(b)'.

(3) Provisions relating to exemptions from reductions based on disregard of certain entitlements to child's insurance benefits-

(A) Section 202(s)(1) of such Act (42 U.S.C. 402(s)(1)) is amended by striking `paragraphs (2), (3), and (4) of section 203(c)' and inserting `paragraphs (1), (2), and (3) of section 203(b)'.

(B) Section 202(s)(3) of such Act (42 U.S.C. 402(s)(3)) is amended by striking `The last sentence of subsection (c) of section 203, subsection (f)(1)(C) of section 203, and subsections' and inserting `Subsections'.

(4) PROVISIONS RELATING TO SUSPENSION OF ALIENS' BENEFITS- Section 202(t)(7) of such Act (42 U.S.C. 402(t)(7)) is amended by striking `Subsections (b), (c), and (d)' and inserting `Subsection (b)'.

(5) PROVISIONS RELATING TO BENEFITS INCREASED ON ACCOUNT OF DELAYED RETIREMENT- Section 202(w)(2)(B)(ii) of such Act (42 U.S.C. 402(w)(2)(B)(ii)) is amended by striking `or 203(c)'.

(6) PROVISIONS RELATING TO REDUCTIONS IN BENEFITS BASED ON MAXIMUM BENEFITS- Section 203(a)(3)(B)(iii) of such Act (42 U.S.C. 403(a)(3)(B)(iii)) is amended by striking `and subsections (b), (c), and (d)' and inserting `and subsection (b)'.

(7) PROVISIONS RELATING TO PENALTIES FOR MISREPRESENTATIONS CONCERNING EARNINGS FOR PERIODS SUBJECT TO DEDUCTIONS ON ACCOUNT OF WORK- Section 208(a)(1)(C) of such Act (42 U.S.C. 408(a)(1)(C)) is amended by striking `under section 203(f) of this title for purposes of deductions from benefits' and inserting `under section 203 for purposes of deductions from benefits on account of work'.

(8) PROVISIONS TAKING INTO ACCOUNT EARNINGS IN DETERMINING BENEFIT COMPUTATION YEARS- Clause (I) in the next to last sentence of section 215(b)(2)(A) of such Act (42 U.S.C. 415(b)(2)(A)) is amended by striking `no earnings as described in section 203(f)(5) in such year' and inserting `no wages, and no net earnings from self-employment (in excess of net loss from self-employment), in such year'.

(9) PROVISIONS RELATING TO ROUNDING OF BENEFITS- Section 215(g) of such Act (42 U.S.C. 415(g)) is amended by striking `and any deduction under section 203(b)'.

(10) PROVISIONS RELATING TO EARNINGS TAKEN INTO ACCOUNT IN DETERMINING SUBSTANTIAL GAINFUL ACTIVITY OF BLIND INDIVIDUALS- The second sentence of section 223(d)(4) of such Act (42 U.S.C. 423(d)(4)) is amended by striking `if section 102 of the Senior Citizens' Right to Work Act of 1996 had not been enacted' and inserting the following: `if the amendments to section 203 made by section 102 of the Senior Citizens' Right to Work Act of 1996 and by section 3 of the Senior Tax Relief Act of 1999 had not been enacted'.

(11) PROVISIONS DEFINING INCOME FOR PURPOSES OF SSI- Section 1612(a) of such Act (42 U.S.C. 1382a(a)) is amended--

(A) by striking `as determined under section 203(f)(5)(C)' in paragraph (1)(A) and inserting `as defined in the last two sentences of this subsection'; and

(B) by adding at the end (after and below paragraph (2)(F)) the following new sentences:

`For purposes of paragraph (1)(A), the term `wages' means wages as defined in section 209, but computed without regard to the limitations as to amounts of remuneration specified in paragraphs (1), (6)(B), (6)(C), (7)(B), and (8) of section 209(a). In making the computation under the preceding sentence, (A) services which do not constitute employment as defined in section 210, performed within the United States by an individual as an employee or performed outside the United States in the active military or naval services of the United States, shall be deemed to be employment as so defined if the remuneration for such services is not includible in computing the individual's net earnings or net loss from self-employment for purposes of title II, and (B) the term `wages' shall be deemed not to include (i) the amount of any payment made to, or on behalf of, an employee or any of his or her dependents (including any amount paid by an employer for insurance or annuities, or into a fund, to provide for any such payment) on account of retirement, or (ii) any payment or series of payments by an employer to an employee or any of his or her dependents upon or after the termination of the employee's employment relationship because of retirement after attaining an age specified in a plan referred to in section 209(m)(2) or in a pension plan of the employer.'.

(12) REPEAL OF DEDUCTIONS ON ACCOUNT OF WORK UNDER THE RAILROAD RETIREMENT PROGRAM- Section 2 of the Railroad Retirement Act of 1974 (45 U.S.C. 231a) is amended by striking subsections (f) and (g)(2).

(c) EFFECTIVE DATE- The amendments and repeals made by this section shall apply with respect to taxable years ending on or after the date of the enactment of this Act.

SEC. 4. REPEAL OF ESTATE AND GIFT TAXES.

(a) IN GENERAL- Subtitle B of the Internal Revenue Code of 1986 (relating to estate, gift, and generation-skipping taxes) is hereby repealed.

(b) EFFECTIVE DATE- The repeal made by subsection (a) shall apply to estates of decedents dying, and transfers made, after the date of the enactment of this Act.

END