To amend the Internal Revenue Code of 1986 to repeal the 1993 increase in income taxes on Social Security benefits.

Summary: Amends the Internal Revenue Code to repeal the tax increase on social security benefits enacted by the Revenue Reconciliation Act of 1993.Provides a credit for the amount of 2000 taxes attributable to such increase.

SECTION 1. 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, 2000.''
    (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, 2000.
    (d) Rebate of 2000 Taxes Attributable to 1993 Increase.--
            (1) In general.--Subchapter B of chapter 65 of such Code 
        (relating to abatements, credits, and refunds) is amended by 
        adding at the end the following new section:

``SEC. 6429. REBATE OF 2000 TAXES ATTRIBUTABLE TO 1993 INCREASE IN TAX 
              ON SOCIAL SECURITY BENEFITS.

    ``(a) In General.--In the case of an individual, there shall be 
allowed as a credit against the tax imposed by this subtitle for the 
taxpayer's first taxable year beginning in 2001 an amount equal to the 
amount by which the tax imposed by chapter 1 for the taxpayer's first 
taxable year beginning in 2000 would be reduced if paragraph (2) of 
section 86(a) had not applied for such taxable year.
    ``(b) Coordination With Advance Refunds of Credit.--
            ``(1) In general.--The amount of credit which would (but 
        for this paragraph) be allowable under this section shall be 
        reduced (but not below zero) by the aggregate refunds and 
        credits made or allowed to the taxpayer under subsection (d). 
        Any failure to so reduce the credit shall be treated as arising 
        out of a mathematical or clerical error and assessed according 
        to section 6213(b)(1).
            ``(2) Joint returns.--In the case of a refund or credit 
        made or allowed under subsection (d) with respect to a joint 
        return, such refund or credit shall be treated as having been 
        made or allowed to each individual filing such return in 
        proportion to their respective amounts of social security 
        benefits (as defined in section 86(d)) received during the 
        taxpayer's first taxable year beginning in 2000.
    ``(c) Coordination With Estimated Tax.--The credit under this 
section shall be treated for purposes of section 6654(f) in the same 
manner as a credit under subpart A of part IV of subchapter A of 
chapter 1.
    ``(d) Advance Refunds of Credit.--
            ``(1) In general.--Each individual shall be treated as 
        having made a payment against the tax imposed by chapter 1 for 
        such individual's first taxable year beginning in 2000 in an 
        amount equal to the advance refund amount for such taxable 
        year.
            ``(2) Advance refund amount.--For purposes of paragraph 
        (1), the advance refund amount is the amount that would have 
        been allowed as a credit under this section for such first 
        taxable year if this section (other than subsection (b) and 
        this subsection) had applied to such taxable year.
            ``(3) Timing of payments.--In the case of any overpayment 
        attributable to this subsection, the Secretary shall, subject 
        to the provisions of this title, refund or credit such 
        overpayment as rapidly as possible and, to the extent 
        practicable, before October 1, 2001. No refund or credit shall 
        be made or allowed under this subsection after December 31, 
        2001.
            ``(4) No interest.--No interest shall be allowed on any 
        overpayment attributable to this subsection.''.
            (2) Clerical amendment.--The table of sections for 
        subchapter B of chapter 65 is amended by adding at the end the 
        following new item:

                              ``Sec. 6429. Rebate of 2000 taxes 
                                        attributable to 1993 increase 
                                        in tax on social security 
                                        benefits.''.