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103D CONGRESS

1ST SESSION H. R. 1413

To amend title II of the Social Security Act to eliminate the penalty imposed

on wage income earned by individuals who have attained retirement age.

IN THE HOUSE OF REPRESENTATIVES

MARCH 18, 1993

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

Committee on Ways and Means

A BILL

To amend title II of the Social Security Act to eliminate

the penalty imposed on wage income earned by individuals who have attained retirement age.

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 ‘‘Fair Tax Relief for

5 Working Older Americans’’.

6 SEC. 2. FINDINGS.

7 The Congress finds that—

8 (1) no American should be unfairly discouraged

9 from working;
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1 (2) older Americans are currently severely pe2 nalized for attempting to continue to work past the

3 Federal retirement age;

4 (3) an older American that earns just $10,560

5 annually will face an effective Federal marginal tax

6 rate of 56 percent;

7 (4) continued American economic strength and

8 prosperity will require retaining our most experi9 enced and dependable workers;

10 (5) By eliminating the $200,000,000 adminis11 trative expense spent each year by the Social Secu12 rity Administration enforcing the earning penalties,

13 and encouraging more older Americans to continue

14 to work while productive, Federal revenues would be

15 increased by over $140,000,000, and a significant

16 increase in Social Security reserves would accrue as

17 well.

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

19 (a) Section 203 of the Social Security Act (42 U.S.C.

20 403) is amended—

21 (1) in paragraph (1) of subsection (c), para22 graphs (1)(A) and (2) of subsection (d), by striking

23 ‘‘the age of seventy’’ and inserting ‘‘retirement age

24 (as defined in section 216(l))’’;
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1 (2) in subsection (f)(1)(B), by striking ‘‘age

2 seventy’’ and inserting ‘‘retirement age (as defined

3 in section 216(l))’’;

4 (3) in subsection (f)(3)—

(A) by striking ‘‘331 5 ⁄3 percent’’ and all

6 that follows through ‘‘multiplied by the number

7 of months in such year’’ and inserting ‘‘50 per8 cent of his earnings for such year in excess of

9 the product derived by multiplying the applica10 ble exempt amount as determined under para11 graph (8) by the number of months in such

12 year’’, and

13 (B) by striking ‘‘age 70’’ and inserting

14 ‘‘retirement age (as defined in section 216(l))’’;

15 (4) in subsection (g)—

16 (A) by striking ‘‘attained age 70’’ and in17 serting ‘‘attained the age of retirement (as de18 fined in section 216(l))’’, and

19 (B) by striking ‘‘under age 70’’ and insert20 ing ‘‘under the age of retirement (as defined in

21 section 216(l))’’;

22 (5) in subsection (j)—

23 (A) by striking ‘‘age seventy’’ in the head24 ing and inserting ‘‘retirement age’’, and
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1 (B) by striking ‘‘seventy years of age’’ and

2 inserting ‘‘having attained retirement age (as

3 defined in section 216(l))’’.

4 SEC. 4. CONFORMING AND RELATED AMENDMENTS.

5 (a) Section 203 of the Social Security Act (42 U.S.C.

6 403(f)(8)(A)) is amended—

7 (1) in the last sentence of subsection (c), by

8 striking ‘‘nor shall any deduction’’ and all that fol9 lows and inserting ‘‘nor shall any deduction be made

10 under this subsection from any widow’s or widower’s

11 insurance benefit if the widow, surviving divorced

12 wife, widower, or surviving divorced husband in13 volved became entitled to such benefit prior to at14 taining age 60.’’;

15 (2) in subsection (f)(1) by striking clause (D)

16 and inserting the following ‘‘(D) for which such indi17 vidual is entitled to widow’s or widower’s insurance

18 benefits if such individual became so entitled prior

19 to attaining age 60, or’’;

20 (3) in subsection (f)(8)(A), by striking ‘‘the new

21 exempt amounts (separately stated for individuals

22 described in subparagraph (D) and for other individ23 uals which are to be applicable’’ and inserting ‘‘the

24 new exempt amount which is to be applicable’’;

25 (4) in subsection (f)(8)(B)—
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1 (A) by striking all that precedes clause (i)

2 and inserting the following:

3 ‘‘(B) The exempt amount which is applicable

4 for each month of a particular taxable year shall be

5 whichever of the following is the larger—’’,

6 (B) in clause (i), by striking ‘‘correspond7 ing’’, and

8 (C) in the last sentence, by striking ‘‘an

9 exempt amount’’ and inserting ‘‘the exempt

10 amount’’;

11 (b) Section 203(f)(8)(D) of such Act (42 U.S.C.

12 403(f)(8)(D)) is repealed.

13 (c) Section 202(w)(2)(B)(ii) of such Act is amend14 ed—

15 (1) by striking ‘‘either’’; and

16 (2) by striking ‘‘or suffered deductions under

17 section 203(b) or 203(c) in amounts equal to the

18 amount of such benefit’’.

19 SEC. 5. EFFECTIVE DATE.

20 The amendments and repeals made by this Act shall

21 be effective with respect to taxable years ending after De22 cember 31, 1993.

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