I

106TH CONGRESS

1ST SESSION H. R. 107

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.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 6, 1999

Mr. KNOLLENBERG introduced the following bill; which was referred to the

Committee on Ways and Means

A BILL

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.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Senior Tax Relief Act

5 of 1999’’.
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1 SEC. 2. REPEAL OF 1993 INCREASE IN TAX ON SOCIAL SECU2 RITY BENEFITS.

3 (a) IN GENERAL.—Paragraph (2) of section 86(a) of

4 the Internal Revenue Code of 1986 (relating to social se5 curity and tier 1 railroad retirement benefits) is amended

6 by adding at the end the following new sentence:

7 ‘‘This paragraph shall not apply to any taxable year

8 beginning after December 31, 1998.’’

9 (b) CONFORMING AMENDMENTS.—

10 (1) Paragraph (3) of section 871(a) of such

11 Code is amended by striking ‘‘85 percent’’ in sub12 paragraph (A) and inserting ‘‘50 percent’’.

13 (2)(A) Subparagraph (A) of section 121(e)(1)

14 of the Social Security Amendments of 1983 (Public

15 Law 98–21) is amended—

16 (i) by striking ‘‘(A) There’’ and inserting

17 ‘‘There’’;

18 (ii) by striking ‘‘(i)’’ immediately following

19 ‘‘amounts equivalent to’’; and

20 (iii) by striking ‘‘, less (ii)’’ and all that

21 follows and inserting a period.

22 (B) Paragraph (1) of section 121(e) of such Act

23 is amended by striking subparagraph (B).

24 (C) Paragraph (3) of section 121(e) of such Act

25 is amended by striking subparagraph (B) and by re26 designating subparagraph (C) as subparagraph (B).
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1 (D) Paragraph (2) of section 121(e) of such

2 Act is amended in the first sentence by striking

3 ‘‘paragraph (1)(A)’’ and inserting ‘‘paragraph (1)’’.

4 (c) EFFECTIVE DATE.—The amendments made by

5 this section shall apply to taxable years beginning after

6 December 31, 1998.

7 SEC. 3. REMOVAL OF LIMITATION UPON THE AMOUNT OF

8 OUTSIDE INCOME WHICH A SOCIAL SECU9 RITY BENEFICIARY MAY EARN WHILE RE10 CEIVING BENEFITS.

11 (a) REPEAL OF PROVISIONS RELATING TO DEDUC12 TIONS ON ACCOUNT OF WORK.—

13 (1) IN GENERAL.—Subsections (b), (c)(1), (d),

14 (f), (h), (j), and (k) of section 203 of the Social Se15 curity Act (42 U.S.C. 403) are repealed.

16 (2) CONFORMING AMENDMENTS.—Section 203

17 of such Act (as amended by subsection (a)) is fur18 ther amended—

19 (A) in subsection (c), by redesignating

20 such subsection as subsection (b), and—

21 (i) by striking ‘‘Noncovered Work

22 Outside the United States or’’ in the head23 ing;
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1 (ii) by redesignating paragraphs (2),

2 (3), and (4) as paragraphs (1), (2), and

3 (3), respectively;

4 (iii) by striking ‘‘For purposes of

5 paragraphs (2), (3), and (4)’’ and inserting

6 ‘‘For purposes of paragraphs (1), (2), and

7 (3)’’; and

8 (iv) by striking the last sentence;

9 (B) in subsection (e), by redesignating

10 such subsection as subsection (c), and by strik11 ing ‘‘subsections (c) and (d)’’ and inserting

12 ‘‘subsection (b)’’;

13 (C) in subsection (g), by redesignating

14 such subsection as subsection (d), and by strik15 ing ‘‘subsection (c)’’ each place it appears and

16 inserting ‘‘subsection (b)’’; and

17 (D) in subsection (l), by redesignating such

18 subsection as subsection (e), and by striking

19 ‘‘subsection (g) or (h)(1)(A)’’ and inserting

20 ‘‘subsection (d)’’.

21 (b) ADDITIONAL CONFORMING AMENDMENTS.—

22 (1) PROVISIONS RELATING TO BENEFITS TER23 MINATED UPON DEPORTATION.—Section 202(n)(1)

24 of the Social Security Act (42 U.S.C. 402(n)(1)) is
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1 amended by striking ‘‘Section 203 (b), (c), and (d)’’

2 and inserting ‘‘Section 203(b)’’.

3 (2) PROVISIONS RELATING TO EXEMPTIONS

4 FROM REDUCTIONS BASED ON EARLY RETIRE5 MENT.—

6 (A) Section 202(q)(5)(B) of such Act (42

7 U.S.C. 402(q)(5)(B)) is amended by striking

8 ‘‘section 203(c)(2)’’ and inserting ‘‘section

9 203(b)(1)’’.

10 (B) Section 202(q)(7)(A) of such Act (42

11 U.S.C. 402(q)(7)(A)) is amended by striking

12 ‘‘deductions under section 203(b), 203(c)(1),

13 203(d)(1), or 222(b)’’ and inserting ‘‘deduc14 tions on account of work under section 203 or

15 deductions under section 222(b)’’.

16 (3) PROVISIONS RELATING TO EXEMPTIONS

17 FROM REDUCTIONS BASED ON DISREGARD OF CER18 TAIN ENTITLEMENTS TO CHILD’S INSURANCE BENE19 FITS.—

20 (A) Section 202(s)(1) of such Act (42

21 U.S.C. 402(s)(1)) is amended by striking

22 ‘‘paragraphs (2), (3), and (4) of section 203(c)’’

23 and inserting ‘‘paragraphs (1), (2), and (3) of

24 section 203(b)’’.
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1 (B) Section 202(s)(3) of such Act (42

2 U.S.C. 402(s)(3)) is amended by striking ‘‘The

3 last sentence of subsection (c) of section 203,

4 subsection (f)(1)(C) of section 203, and sub5 sections’’ and inserting ‘‘Subsections’’.

6 (4) PROVISIONS RELATING TO SUSPENSION OF

7 ALIENS’ BENEFITS.—Section 202(t)(7) of such Act

8 (42 U.S.C. 402(t)(7)) is amended by striking ‘‘Sub9 sections (b), (c), and (d)’’ and inserting ‘‘Subsection

10 (b)’’.

11 (5) PROVISIONS RELATING TO BENEFITS IN12 CREASED ON ACCOUNT OF DELAYED RETIRE13 MENT.—Section 202(w)(2)(B)(ii) of such Act (42

14 U.S.C. 402(w)(2)(B)(ii)) is amended by striking ‘‘or

15 203(c)’’.

16 (6) PROVISIONS RELATING TO REDUCTIONS IN

17 BENEFITS BASED ON MAXIMUM BENEFITS.—Section

18 203(a)(3)(B)(iii) of such Act (42 U.S.C.

19 403(a)(3)(B)(iii)) is amended by striking ‘‘and sub20 sections (b), (c), and (d)’’ and inserting ‘‘and sub21 section (b)’’.

22 (7) PROVISIONS RELATING TO PENALTIES FOR

23 MISREPRESENTATIONS CONCERNING EARNINGS FOR

24 PERIODS SUBJECT TO DEDUCTIONS ON ACCOUNT OF

25 WORK.—Section 208(a)(1)(C) of such Act (42
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1 U.S.C. 408(a)(1)(C)) is amended by striking ‘‘under

2 section 203(f) of this title for purposes of deductions

3 from benefits’’ and inserting ‘‘under section 203 for

4 purposes of deductions from benefits on account of

5 work’’.

6 (8) PROVISIONS TAKING INTO ACCOUNT EARN7 INGS IN DETERMINING BENEFIT COMPUTATION

8 YEARS.—Clause (I) in the next to last sentence of

9 section 215(b)(2)(A) of such Act (42 U.S.C.

10 415(b)(2)(A)) is amended by striking ‘‘no earnings

11 as described in section 203(f)(5) in such year’’ and

12 inserting ‘‘no wages, and no net earnings from self13 employment (in excess of net loss from self-employ14 ment), in such year’’.

15 (9) PROVISIONS RELATING TO ROUNDING OF

16 BENEFITS.—Section 215(g) of such Act (42 U.S.C.

17 415(g)) is amended by striking ‘‘and any deduction

18 under section 203(b)’’.

19 (10) PROVISIONS RELATING TO EARNINGS

20 TAKEN INTO ACCOUNT IN DETERMINING SUBSTAN21 TIAL GAINFUL ACTIVITY OF BLIND INDIVIDUALS.—

22 The second sentence of section 223(d)(4) of such

23 Act (42 U.S.C. 423(d)(4)) is amended by striking

24 ‘‘if section 102 of the Senior Citizens’ Right to

25 Work Act of 1996 had not been enacted’’ and insert-
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1 ing the following: ‘‘if the amendments to section 203

2 made by section 102 of the Senior Citizens’ Right to

3 Work Act of 1996 and by section 3 of the Senior

4 Tax Relief Act of 1999 had not been enacted’’.

5 (11) PROVISIONS DEFINING INCOME FOR PUR6 POSES OF SSI.—Section 1612(a) of such Act (42

7 U.S.C. 1382a(a)) is amended—

8 (A) by striking ‘‘as determined under sec9 tion 203(f)(5)(C)’’ in paragraph (1)(A) and in10 serting ‘‘as defined in the last two sentences of

11 this subsection’’; and

12 (B) by adding at the end (after and below

13 paragraph (2)(F)) the following new sentences:

14 ‘‘For purposes of paragraph (1)(A), the term ‘wages’

15 means wages as defined in section 209, but computed

16 without regard to the limitations as to amounts of remu17 neration specified in paragraphs (1), (6)(B), (6)(C),

18 (7)(B), and (8) of section 209(a). In making the computa19 tion under the preceding sentence, (A) services which do

20 not constitute employment as defined in section 210, per21 formed within the United States by an individual as an

22 employee or performed outside the United States in the

23 active military or naval services of the United States, shall

24 be deemed to be employment as so defined if the remu25 neration for such services is not includible in computing
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1 the individual’s net earnings or net loss from self-employ2 ment for purposes of title II, and (B) the term ‘wages’

3 shall be deemed not to include (i) the amount of any pay4 ment made to, or on behalf of, an employee or any of his

5 or her dependents (including any amount paid by an em6 ployer for insurance or annuities, or into a fund, to pro7 vide for any such payment) on account of retirement, or

8 (ii) any payment or series of payments by an employer

9 to an employee or any of his or her dependents upon or

10 after the termination of the employee’s employment rela11 tionship because of retirement after attaining an age spec12 ified in a plan referred to in section 209(m)(2) or in a

13 pension plan of the employer.’’.

14 (12) REPEAL OF DEDUCTIONS ON ACCOUNT OF

15 WORK UNDER THE RAILROAD RETIREMENT PRO16 GRAM.—Section 2 of the Railroad Retirement Act of

17 1974 (45 U.S.C. 231a) is amended by striking sub18 sections (f) and (g)(2).

19 (c) EFFECTIVE DATE.—The amendments and re20 peals made by this section shall apply with respect to tax21 able years ending on or after the date of the enactment

22 of this Act.
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1 SEC. 4. REPEAL OF ESTATE AND GIFT TAXES.

2 (a) IN GENERAL.—Subtitle B of the Internal Reve3 nue Code of 1986 (relating to estate, gift, and generation4 skipping taxes) is hereby repealed.

5 (b) EFFECTIVE DATE.—The repeal made by sub6 section (a) shall apply to estates of decedents dying, and

7 transfers made, after the date of the enactment of this

8 Act.

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