FAIR Social Security Act

To amend the Internal Revenue Code of 1986 and title II of the Social Security Act to repeal the cap on compensation subject to the payroll tax, to reallocate payroll tax revenue to the Social Security Trust Funds, to apply the CPI–E to Social Security cost-of-living increases, and for other purposes. 1. Short title This Act may be cited as the Fair Adjustment and Income Revenue for Social Security Act FAIR Social Security Act 2. Repeal of cap on compensation subject to Federal Insurance Contributions Act (a) Wages Section 3121(a) (b) Self-Employment income The first sentence of section 1402(b) include— include the net earnings from self-employment if such net earnings for the taxable year are less than $400. (c) Conforming amendments (1) Section 6413(c) (A) by striking paragraph (1), and (B) in paragraph (2)(A) by striking , not to exceed an amount equal to the contribution and benefit base (as determined under section 230 of the Social Security Act) for any calendar year with respect to which such contribution and benefit base is effective, (2) Section 3122 The person making such return may, for convenience of administration, make payments of the tax imposed under section 3111 with respect to such service without regard to the contribution and benefit base limitation in section 3121(a)(1), and he shall not be required to obtain a refund of the tax paid under section 3111 on that part of the remuneration not included in wages by reason of section 3121(a)(1). (3) Section 3125 without regard to the contribution and benefit base limitation in section 3121(a)(1) (4) Section 3231(e)(2)(C) (as in effect on the date of the enactment of the Fair Adjustment and Income Revenue for Social Security Act employers) (5) Section 3511(b) 3121(a)(1), 3231(e)(2)(C), 3231(e)(2)(C) (d) Effective date The amendments made by this section shall apply with respect to remuneration received, and taxable years beginning, after December 31, 2015. 3. Reallocation of payroll tax revenue (a) Allocation of 2016 payroll tax revenue With respect to that portion of wages (as defined in section 3121 section 1402 42 U.S.C. 401(b) 12.40 per centum 1.80 per centum (b) Wages Section 201(b)(1) of the Social Security Act ( 42 U.S.C. 401(b)(1) and (R) 1.80 per centum of the wages (as so defined) paid after December 31, 1999, and so reported (R) 1.80 per centum of the wages (as so defined) paid after December 31, 1999, and before January 1, 2033, and so reported, (S) 1.60 per centum of the wages (as so defined) paid after December 31, 2032, and before January 1, 2050, and so reported, and (T) 1.80 per centum of the wages (as so defined) paid after December 31, 2049, and so reported (c) Self-Employment income Section 201(b)(2) of such Act ( 42 U.S.C. 401(b)(2) and (R) 1.80 per centum of the amount of self-employment income (as so defined) so reported for any taxable year beginning after December 31, 1999 (R) 1.80 per centum of the amount of self-employment income (as so defined) so reported for any taxable year beginning after December 31, 1999, and before January 1, 2033, (S) 1.60 per centum of the amount of self-employment income (as so defined) so reported for any taxable year beginning after December 31, 2032, and before January 1, 2050, (T) 1.80 per centum of the amount of self-employment income (as so defined) so reported for any taxable year beginning after December 31, 2049 (d) Effective date The amendments made by this section shall apply with respect to wages paid after December 31, 2015, and self-employment income for taxable years beginning after such date. 4. Consumer Price Index for Elderly Consumers (a) Publication (1) In general The Bureau of Labor Statistics of the Department of Labor shall prepare and publish an index for each calendar month to be known as the Consumer Price Index for Elderly Consumers (2) Effective date Subsection (a) shall apply with respect to calendar months ending on or after July 31 of the calendar year following the calendar year in which this Act is enacted. (3) Authorization of appropriations There are authorized to be appropriated such sums as are necessary to carry out the provisions of this section. (b) Computation of cost-of-Living increases (1) Amendments to title II (A) In general Section 215(i)(1) of the Social Security Act ( 42 U.S.C. 415(i)(1) (H) the term Consumer Price Index . (B) Application to pre-1979 law (i) In general Section 215(i)(1) of the Social Security Act as in effect in December 1978, and as applied in certain cases under the provisions of such Act as in effect after December 1978, is amended by adding at the end the following new subparagraph: (D) the term Consumer Price Index . (ii) Conforming change Section 215(i)(4) of the Social Security Act ( 42 U.S.C. 415(i)(4) and by section 4 of the Fair Adjustment and Income Revenue for Social Security Act 1986 (C) Effective date The amendments made by subparagraphs (A) and (B) shall apply to determinations made with respect to cost-of-living computation quarters ending on or after September 30 of the second calendar year following the calendar year in which this Act is enacted. (2) Amendments to Title XVIII (A) In general Title XVIII of such Act ( 42 U.S.C. 1395 et seq. (i) in section 1814(i)(2)(B) ( 42 U.S.C. 1395f(i)(2)(B) (i) for accounting years ending before October 1 of the second calendar year following the calendar year in which the Fair Adjustment and Income Revenue for Social Security Act for a year is fifth month of the accounting year , and (ii) for accounting years ending after October 1 of such calendar year, the cap amount determined under clause (i) for the last accounting year referred to in such clause, increased or decreased by the same percentage as the percentage increase or decrease, respectively, in the medical care expenditure category (or corresponding category) of the Consumer Price Index for Elderly Consumers, published by the Bureau of Labor Statistics, from March of such calendar year to the fifth month of the accounting year (ii) in section 1821(c)(2)(C)(ii)(II) ( 42 U.S.C. 1395i–5(c)(2)(C)(ii)(II) consumer price index for all urban consumers (all items; United States city average) Consumer Price Index for Elderly Consumers (iii) in section 1833(h)(2)(A)(i) ( 42 U.S.C. 1395l(h)(2)(A)(i) Consumer Price Index for All Urban Consumers (United States city average) Consumer Price Index for Elderly Consumers (iv) in section 1833(i)(2)(C)(i) ( 42 U.S.C. 1395l(i)(2)(C)(i) Consumer Price Index for all urban consumers (U.S. city average) Consumer Price Index for Elderly Consumers (v) in section 1834(a)(14)(L) ( 42 U.S.C. 1395m(a)(14)(L) consumer price index for all urban consumers (U.S. urban average) applicable consumer price index (vi) in section 1834(h)(4)(A)(xi)(I) ( 42 U.S.C. 1395m(h)(4)(A)(xi)(I) consumer price index for all urban consumers (United States city average) Consumer Price Index for Elderly Consumers (vii) in section 1834(l)(3)(B) ( 42 U.S.C. 1395m(l)(3)(B) consumer price index for all urban consumers (U.S. city average) Consumer Price Index for Elderly Consumers (viii) in section 1839(i)(5)(A)(ii) ( 42 U.S.C. 1395r(i)(5)(A)(ii) Consumer Price Index (United States city average) Consumer Price Index for Elderly Consumers (ix) in section 1842(s)(1)(B)(ii)(I) ( 42 U.S.C. 1395u(s)(1)(B)(ii)(I) consumer price index for all urban consumers (United States city average) Consumer Price Index for Elderly Consumers (x) in each of subparagraphs (D)(ii) and (E)(i)(II) of section 1860D–14(a)(3) ( 42 U.S.C. 1395w–114(a)(3) 42 U.S.C. 1395w–114(a)(4)(A)(ii) consumer price index (all items; U.S. city average) Consumer Price Index for Elderly Consumers (xi) in section 1882(p)(11)(C)(ii) ( 42 U.S.C. 1395ss(p)(11)(C)(ii) Consumer Price Index for all urban consumers (all items; U.S. city average) Consumer Price Index for Elderly Consumers (xii) in each of clauses (iv) and (vi)(II) of section 1886(h)(2)(E) ( 42 U.S.C. 1395ww(h)(2)(E) for all urban consumers (xiii) in section 1886(h)(5)(B) ( 42 U.S.C. 1395ww(h)(5)(B) Consumer Price Index for All Urban Consumers (United States city average) Consumer Price Index for Elderly Consumers (B) Effective date The amendments made by subparagraph (A) shall apply with respect to determinations made for periods ending after December 31 of the second calendar year following the calendar year in which this Act was enacted.

Summary: Fair Adjustment and Income Revenue for Social Security Act or the FAIR Social Security Act This bill repeals the cap on the amount of income ($118,500 in 2015) that is subject to the employment or self-employment tax for funding social security benefits. The bill also reallocates employment and self-employment tax revenues to increase Social Security Trust Fund solvency. The Bureau of Labor Statistics of the Department of Labor must prepare and publish an index for each calendar month to be known as the Consumer Price Index for Elderly Consumers that indicates changes in expenditures for consumption that are typical for individuals who are 62 years of age or older. This Index will be used to adjust benefit amounts under the Old Age, Survivors, and Disability Insurance program and Medicare.