I 

113TH CONGRESS 

2D SESSION H. R. 5852 

To amend the Internal Revenue Code of 1986 to eliminate the $117,000 

cap on income subject to Social Security payroll taxes. 

IN THE HOUSE OF REPRESENTATIVES 

DECEMBER 11, 2014 

Mr. GRAYSON 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 eliminate 

the $117,000 cap on income subject to Social Security 

payroll 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 ‘‘Scrap the Cap Act’’. 

5 SEC. 2. PAYROLL TAX ON REMUNERATION. 

6 (a) IN GENERAL.—Paragraph (1) of section 3121(a) 

7 of the Internal Revenue Code of 1986 is amended by in8 serting after ‘‘such calendar year.’’ the following: ‘‘The 

9 preceding sentence shall apply only to calendar years for 

10 which the contribution and benefit base (as so determined) 


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1 is less than $117,000, and, for such calendar years, only 

2 to so much of the remuneration paid to such employee 

3 by such employer with respect to employment as does not 

4 exceed $117,000.’’. 

5 (b) CONFORMING AMENDMENT.—Paragraph (1) of 

6 section 3121 of the Internal Revenue Code of 1986 is 

7 amended by striking ‘‘Act) to’’ and inserting ‘‘Act), or in 

8 excess of $117,000, to’’. 

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

10 this section shall apply to remuneration paid after Decem11 ber 31, 2014. 

12 SEC. 3. TAX ON NET EARNINGS FROM SELF-EMPLOYMENT. 

13 (a) IN GENERAL.—Paragraph (1) of section 1402(b) 

14 of the Internal Revenue Code of 1986 is amended to read 

15 as follows: 

16 ‘‘(1) in the case of the tax imposed by section 

17 1401(a), the excess of— 

18 ‘‘(A) that part of the net earnings from 

19 self-employment which is in excess of— 

20 ‘‘(i) an amount equal to the contribu21 tion and benefit base (as determined under 

22 section 230 of the Social Security Act) 

23 which is effective for the calendar year in 

24 which such taxable year begins, minus 


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1 ‘‘(ii) the amount of the wages paid to 

2 such individual during such taxable years; 

3 over 

4 ‘‘(B) that part of the net earnings from 

5 self-employment which is in excess of the sum 

6 of— 

7 ‘‘(i) the excess of— 

8 ‘‘(I) the net earning from self9 employment reduced by the excess (if 

10 any) of subparagraph (A)(i) over sub11 paragraph (A)(ii), over 

12 ‘‘(II) $117,000, reduced by such 

13 contribution and benefit base, plus 

14 ‘‘(ii) the amount of the wages paid to 

15 such individual during such taxable year in 

16 excess of such contribution and benefit 

17 base and not in excess of $117,000; or’’. 

18 (b) PHASEOUT.—Subsection (b) of section 1402 of 

19 the Internal Revenue Code of 1986 is amended by adding 

20 at the end the following: ‘‘Paragraph (1) shall apply only 

21 to taxable years beginning in calendar years for which the 

22 contribution and benefit base (as determined under section 

23 230 of the Social Security Act) is less than $117,000.’’. 

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

25 this section shall apply to net earnings from self-employVerDate Sep 11 2014 04:13 Dec 20, 2014 Jkt 049200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H5852.IH H5852

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1 ment derived, and remuneration paid, after December 31, 

2 2014. 

Æ 


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