Fair Tax Relief for Working Older Americans

Summary: Fair Tax Relief for Working Older Americans - Amends title II (Old Age, Survivors and Disability Insurance) of the Social Security Act to revise excess earnings provisions in order to eliminate the tax and earnings penalties imposed on the wage income of individuals who have attained retirement age.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Fair Tax Relief for Working Older 
Americans''.

SEC. 2. FINDINGS.

    The Congress finds that--
            (1) no American should be unfairly discouraged from 
        working;
            (2) older Americans are currently severely penalized for 
        attempting to continue to work past the Federal retirement age;
            (3) an older American that earns just $10,560 annually will 
        face an effective Federal marginal tax rate of 56 percent;
            (4) continued American economic strength and prosperity 
        will require retaining our most experienced and dependable 
        workers;
            (5) By eliminating the $200,000,000 administrative expense 
        spent each year by the Social Security Administration enforcing 
        the earning penalties, and encouraging more older Americans to 
        continue to work while productive, Federal revenues would be 
        increased by over $140,000,000, and a significant increase in 
        Social Security reserves would accrue as well.

SEC. 3. REPEAL OF TAX PENALTY ON OLDER AMERICANS.

    (a) Section 203 of the Social Security Act (42 U.S.C. 403) is 
amended--
            (1) in paragraph (1) of subsection (c), paragraphs (1)(A) 
        and (2) of subsection (d), by striking ``the age of seventy'' 
        and inserting ``retirement age (as defined in section 
        216(l))'';
            (2) in subsection (f)(1)(B), by striking ``age seventy'' 
        and inserting ``retirement age (as defined in section 
        216(l))'';
            (3) in subsection (f)(3)--
                    (A) by striking ``33\1/3\ percent'' and all that 
                follows through ``multiplied by the number of months in 
                such year'' and inserting ``50 percent of his earnings 
                for such year in excess of the product derived by 
                multiplying the applicable exempt amount as determined 
                under paragraph (8) by the number of months in such 
                year'', and
                    (B) by striking ``age 70'' and inserting 
                ``retirement age (as defined in section 216(l))'';
            (4) in subsection (g)--
                    (A) by striking ``attained age 70'' and inserting 
                ``attained the age of retirement (as defined in section 
                216(l))'', and
                    (B) by striking ``under age 70'' and inserting 
                ``under the age of retirement (as defined in section 
                216(l))'';
            (5) in subsection (j)--
                    (A) by striking ``age seventy'' in the heading and 
                inserting ``retirement age'', and
                    (B) by striking ``seventy years of age'' and 
                inserting ``having attained retirement age (as defined 
                in section 216(l))''.

SEC. 4. CONFORMING AND RELATED AMENDMENTS.

    (a) Section 203 of the Social Security Act (42 U.S.C. 403(f)(8)(A)) 
is amended--
            (1) in the last sentence of subsection (c), by striking 
        ``nor shall any deduction'' and all that follows and inserting 
        ``nor shall any deduction be made under this subsection from 
        any widow's or widower's insurance benefit if the widow, 
        surviving divorced wife, widower, or surviving divorced husband 
        involved became entitled to such benefit prior to attaining age 
        60.'';
            (2) in subsection (f)(1) by striking clause (D) and 
        inserting the following ``(D) for which such individual is 
        entitled to widow's or widower's insurance benefits if such 
        individual became so entitled prior to attaining age 60, or'';
            (3) in subsection (f)(8)(A), by striking ``the new exempt 
        amounts (separately stated for individuals described in 
        subparagraph (D) and for other individuals which are to be 
        applicable'' and inserting ``the new exempt amount which is to 
        be applicable'';
            (4) in subsection (f)(8)(B)--
                    (A) by striking all that precedes clause (i) and 
                inserting the following:
            ``(B) The exempt amount which is applicable for each month 
        of a particular taxable year shall be whichever of the 
        following is the larger--'',
                    (B) in clause (i), by striking ``corresponding'', 
                and
                    (C) in the last sentence, by striking ``an exempt 
                amount'' and inserting ``the exempt amount'';
    (b) Section 203(f)(8)(D) of such Act (42 U.S.C. 403(f)(8)(D)) is 
repealed.
    (c) Section 202(w)(2)(B)(ii) of such Act is amended--
            (1) by striking ``either''; and
            (2) by striking ``or suffered deductions under section 
        203(b) or 203(c) in amounts equal to the amount of such 
        benefit''.

SEC. 5. EFFECTIVE DATE.

    The amendments and repeals made by this Act shall be effective with 
respect to taxable years ending after December 31, 1993.