Strengthen Social Security by Taxing Dynastic Wealth Act

To amend the Internal Revenue Code of 1986 to return the estate, gift, and generation skipping transfer tax to 2009 levels, and for other purposes. 1. Short title This Act may be cited as the Strengthen Social Security by Taxing Dynastic Wealth Act 2. Estate and gift tax returned to 2009 levels (a) Estate tax (1) Rate schedule The table contained in section 2001(c) Over $1,000,000 but not over $1,250,000 $345,800, plus 41 percent of the excess of such amount over $1,000,000. Over $1,250,000 but not over $1,500,000 $448,300, plus 43 percent of the excess of such amount over $1,250,000. Over $1,500,000 $555,800, plus 45 percent of the excess of such amount over $1,500,000. (2) Reduction of basic exclusion amount Paragraph (3) of section 2010(c) (3) Basic exclusion amount For purposes of this subsection, the basic exclusion amount is $3,500,000. . (b) Gift tax (1) Limitation on basic exclusion amount for purposes of determining applicable credit amount Paragraph (1) of section 2505(a) (determined as if the basic exclusion amount were $1,000,000 and the deceased spousal unused exclusion amount was modified under subsection (d)) calendar year (2) Modification of deceased spousal unused exclusion amount Section 2505 of such Code is amended by adding at the end the following: (d) Modification of deceased spousal unused exclusion amount In the case of a surviving spouse who is the last spouse of the decedent with respect to whom an election is made under section 2010(c)(5), the deceased spousal unused exclusion amount with respect to such surviving spouse shall be determined as if such amount were the lesser of— (1) $1,000,000, and (2) applicable exclusion amount of the decedent reduced by the amount with respect to which the tentative tax is determined under section 2001(b)(1) on the estate of the decedent. . (c) Effective date The amendments made by this section shall apply to estates of decedents dying and gifts made after December 31, 2019. 3. Transfer of estate and gift tax revenue to combined Social Security Trust Fund (a) In general Section 201(a) of the Social Security Act ( 42 U.S.C. 401(a) (a) There is hereby created on the books of the Treasury of the United States a trust fund to be known as the Social Security Trust Fund (1) the taxes imposed by chapter 21 (other than sections 3101(b) and 3111(b)) of the Internal Revenue Code of 1986 with respect to wages (as defined in section 3121 of such Code) reported to the Secretary of the Treasury pursuant to subtitle F of the Internal Revenue Code of 1986, as determined by the Secretary of the Treasury by applying the applicable rates of tax under such chapter (other than sections 3101(b) and 3111(b)) to such wages, which wages shall be certified by the Commissioner of Social Security on the basis of the records of wages established and maintained by such Commissioner in accordance with such reports; (2) the taxes imposed by chapter 2 (other than section 1401(b)) (3) the taxes imposed by subtitle B of the Internal Revenue Code of 1986, as determined by the Secretary of the Treasury on the basis of tax returns under subpart C of part II of subchapter A of chapter 61 of subtitle F of such Code. The amounts appropriated by paragraphs (1), (2), and (3) shall be transferred from time to time from the general fund in the Treasury to the Social Security Trust Fund, such amounts to be determined on the basis of estimates by the Secretary of the Treasury of the taxes, specified in such paragraphs, paid to or deposited into the Treasury; and proper adjustments shall be made in amounts subsequently transferred to the extent prior estimates were in excess of or were less than the taxes specified in such paragraphs. All amounts transferred to the Social Security Trust Fund under the preceding sentence shall be invested by the Managing Trustee in the same manner and to the same extent as the other assets of the Trust Fund. Notwithstanding the preceding sentence, in any case in which the Secretary of the Treasury determines that the assets of the Trust Fund would otherwise be inadequate to meet the Trust Fund's obligations for any month, the Secretary of the Treasury shall transfer to the Trust Fund on the first day of such month the total amount which would have been transferred to the Trust Fund under this section as in effect on October 1, 1990; and the Trust Fund shall pay interest to the general fund on the amount so transferred on the first day of any month at a rate (calculated on a daily basis, and applied against the difference between the amount so transferred on such first day and the amount which would have been transferred to the Trust Fund up to that day under the procedures in effect on January 1, 1983) equal to the rate earned by the investments of the Trust Fund in the same month under subsection (d). . (b) Required actuarial analysis Section 201(c) of the Social Security Act is amended by striking the fourth sentence in the matter following paragraph (5) and inserting the following: Such report shall also include actuarial analysis of the benefit cost with respect to disabled beneficiaries and their auxiliaries, to retired beneficiaries and their auxiliaries, and to survivor beneficiaries. (c) Board of Trustees (1) Board of Trustees of Social Security Trust Fund Section 201(c) of the Social Security Act, as amended by subsection (b) of this section, is further amended in the matter preceding paragraph (1) by striking the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund (hereinafter in this title called the Trust Funds the Social Security Trust Fund (in this title referred to as the Trust Fund (2) Continuity of Board of Trustees The Board of Trustees of the Social Security Trust Fund created by the amendment made by subsection (a) shall be a continuous body with the Board of Trustees of the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund in operation prior to the effective date of such amendment. Individuals serving as members of the Board of Trustees of the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund as of the effective date of such amendment shall serve the remainder of their term as members of the Board of Trustees of the Social Security Trust Fund. (d) Conforming amendments related to Social Security Trust Fund (1) Amendment to section heading The section heading for section 201 of the Social Security Act is amended to read as follows: Social Security Trust Fund (2) Board of Trustees Section 201(c) of such Act, as amended by subsections (b) and (c)(1), is further amended— (A) in the matter preceding paragraph (1), by striking Board of Trustees of the Trust Funds Board of Trustees of the Trust Fund (B) in paragraph (1), by striking Trust Funds Trust Fund (C) in paragraph (2)— (i) by striking Trust Funds Trust Fund (ii) by striking their its (D) in paragraph (3), by striking either of the Trust Funds the Trust Fund (E) in paragraph (5)— (i) by striking managing the Trust Funds managing the Trust Fund (ii) by striking Trust Funds are Trust Fund is (F) in the matter following paragraph (5), by striking Trust Funds Trust Fund (G) in the second sentence in the matter following paragraph (5), by striking whether the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund, individually and collectively, are whether the Social Security Trust Fund is (3) Investments Section 201 of such Act is amended in subsections (d) and (e) by striking Trust Funds Trust Fund (4) Crediting of interest and proceeds to Trust Funds Section 201(f) of such Act is amended— (A) by striking the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund shall be credited to and form a part of the Federal Old-Age and Survivors Insurance Trust Fund and the Disability Insurance Trust Fund, respectively the Social Security Trust Fund shall be credited to and form a part of the Social Security Trust Fund (B) by striking either of the Trust Funds the Trust Fund (C) by striking such Trust Fund the Trust Fund (5) Administrative costs Section 201(g) of such Act is amended— (A) in paragraph (1)— (i) in subparagraph (A), by striking Of the amounts authorized to be made available out of the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund under the preceding sentence ( Public Law 103–296 (ii) in subparagraph (B)(i)— (I) by striking subclauses (II) and (III) and inserting the following: (II) the portion of such costs which should have been borne by the Social Security Trust Fund, ; and (II) by redesignating subclauses (IV) and (V) as subclauses (III) and (IV); (B) in paragraph (2)— (i) by striking Trust Funds Trust Fund (ii) by striking the last sentence; and (C) in paragraph (4), by striking Trust Funds Trust Fund (6) Benefit payments Section 201(h) of such Act is amended to read as follows: (h) All benefit payments required to be made under this title shall be made only from the Social Security Trust Fund. . (7) Gifts Section 201(i) of such Act is amended— (A) in paragraph (1), by striking the Federal Old-Age and Survivors Insurance Trust Fund, the Federal Disability Insurance Trust Fund the Social Security Trust Fund (B) in paragraph (2)(B), by striking the Federal Old-Age and Survivors Insurance Trust Fund the Social Security Trust Fund (8) Travel expenses Section 201(j) of such Act is amended by striking the Federal Old-Age and Survivors Insurance Trust Fund, or the Federal Disability Insurance Trust Fund (as determined appropriate by the Commissioner of Social Security) the Social Security Trust Fund (9) Demonstration projects Section 201(k) of such Act is amended by striking the Federal Disability Insurance Trust Fund and the Federal Old-Age and Survivors Insurance Trust Fund, as determined appropriate by the Commissioner of Social Security the Social Security Trust Fund (10) Benefit checks Section 201(m) of such Act is amended— (A) in paragraph (2), by striking each of the Trust Funds the Social Security Trust Fund (B) in paragraph (3), by striking one of the Trust Funds the Trust Fund (C) by striking such Trust Fund the Trust Fund (11) Conforming repeals (A) In general Section 201 of such Act is amended by striking subsections (b), (l), and (n). (B) Redesignations Section 201 of such Act is further amended— (i) by redesignating subsections (c) through (j) as subsections (b) through (i), respectively; (ii) by redesignating subsection (k) as subsection (j); and (iii) by redesignating subsection (m) as subsection (k). (C) References to redesignated sections (i) Section 201(a) of such Act, as amended by subsection (a) of this section, is further amended— (I) by striking subsection (i)(1) subsection (h)(1) (II) by striking subsection (d) subsection (c) (ii) Section 1131(b)(1) of such Act is amended by striking section 201(g)(1) section 201(f)(1) (e) Other conforming amendments to Social Security Act (1) Title II Title II of the Social Security Act ( 42 U.S.C. 401 (A) in section 202(x)(3)(B)(iii), by striking the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund, as appropriate, the Social Security Trust Fund (B) in section 206(d)(5), by striking the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund, as appropriate the Social Security Trust Fund (C) in section 206(e)(3)(B), by striking the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund the Social Security Trust Fund (D) in section 208(b)(5)(A), by striking the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund, as appropriate the Social Security Trust Fund (E) in section 215(i)(1)(F)— (i) in clause (i)— (I) by striking the combined balance in the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund the balance in the Social Security Trust Fund (II) by striking and reduced by the outstanding amount of any loan (including interest thereon) theretofore made to either such Fund from the Federal Hospital Insurance Trust Fund under section 201(l) (ii) in clause (ii)— (I) by striking the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund the Social Security Trust Fund (II) by striking (other than payments from that Account (F) in section 217(g)(2), by inserting after the first sentence the following: For purposes of any such revision of the amount determined under paragraph (1) that occurs in a year after 2015, any reference in such paragraph to the Federal Old-Age and Survivors Insurance Trust Fund or the Federal Disability Insurance Trust Fund shall be deemed to be a reference to the Social Security Trust Fund. (G) in section 221(e)— (i) by striking Trust Funds Trust Fund (ii) by striking the last sentence; (H) in section 221(f), by striking Trust Funds Trust Fund (I) in section 222(d)— (i) in the section heading, by striking Trust Funds Trust Fund (ii) in paragraph (1), by striking to the end that savings will accrue to the Trust Funds as a result of rehabilitating such individuals, there are authorized to be transferred from the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund to the end that savings will accrue to the Trust Fund as a result of rehabilitating such individuals, there are authorized to be transferred from the Social Security Trust Fund (iii) by amending paragraph (4) to read as follows: (4) The Commissioner of Social Security shall determine according to such methods and procedures as the Commissioner may deem appropriate the total amount to be reimbursed for the cost of services under this subsection. ; (J) in section 228(g)— (i) in the section heading, by striking Federal Old-Age and Survivors Insurance Trust Fund Social Security Trust Fund (ii) in the matter preceding paragraph (1), by striking Federal Old-Age and Survivors Insurance Trust Fund Social Security Trust Fund (K) in section 231(c), by striking Trust Funds Trust Fund (L) in section 234(a)(1), by striking Trust Funds Trust Fund (2) Title VII Title VII of the Social Security Act ( 42 U.S.C. 901 (A) in section 703(j), by striking Federal Disability Insurance Trust Fund, the Federal Old-Age and Survivors Insurance Trust Fund, Social Security Trust Fund (B) in section 708(c), by striking the OASDI trust fund ratio computing (C) in section 709— (i) in subsection (a), by striking Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund Social Security Trust Fund (ii) in subsection (b)— (I) in paragraph (1), by striking section 201(l) or (II) in paragraph (2), by striking Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund Social Security Trust Fund (D) in section 710— (i) in subsection (a), by striking Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund Social Security Trust Fund (ii) in subsection (b)— (I) by striking any Trust Fund specified in subsection (a) the Social Security Trust Fund (II) by striking payments from any such Trust Fund payments from the Social Security Trust Fund (3) Title XI Title XI of the Social Security Act ( 42 U.S.C. 1301 (A) in section 1106(b), by striking the Federal Old-Age and Survivors Insurance Trust Fund, the Federal Disability Insurance Trust Fund the Social Security Trust Fund (B) in section 1129(e)(2)(A), by striking the Federal Old-Age and Survivors Insurance Trust Fund or the Federal Disability Insurance Trust Fund, as determined appropriate by the Secretary the Social Security Trust Fund (C) in sections 1131(b)(2) and 1140(c)(2), by striking the Federal Old-Age and Survivors Insurance Trust Fund the Social Security Trust Fund (D) in section 1145(c)— (i) by striking paragraphs (1) and (2) and inserting the following: (1) the Social Security Trust Fund; ; and (ii) by redesignating paragraphs (3) and (4) as paragraphs (2) and (3), respectively; and (E) in section 1148(j)(1)(A)— (i) in the first sentence, by striking the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund the Social Security Trust Fund (ii) by striking the second sentence. (4) Title XVIII Title XVIII of the Social Security Act ( 42 U.S.C. 1395 (A) in section 1817(g), by striking Federal Old-Age and Survivors Insurance Trust Fund and from the Federal Disability Insurance Trust Fund Social Security Trust Fund (B) in section 1840(a)(2), by striking Federal Old-Age and Survivors Insurance Trust Fund or the Federal Disability Insurance Trust Fund Social Security Trust Fund (C) in section 1841(f), by striking Federal Old-Age and Survivors Insurance Trust Fund and from the Federal Disability Insurance Trust Fund Social Security Trust Fund (f) Conforming amendments outside of Social Security Act (1) Budget (A) Off-budget exemption Section 405(a) of the Congressional Budget Act of 1974 ( 2 U.S.C. 655(a) Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds Social Security Trust Fund (B) Sequestration exemption Section 255(g)(1)(A) of the Balanced Budget and Emergency Deficit Control Act of 1985 ( 2 U.S.C. 905(g)(1)(A) Payments to Social Security Trust Funds Payments to the Social Security Trust Fund (2) Tax (A) Taxable wages Section 3121(l)(4) Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund Social Security Trust Fund (B) Overpayments (i) Section 6402(d)(3)(C) Federal Old-Age and Survivors Insurance Trust Fund or the Federal Disability Insurance Trust Fund, whichever is certified to the Secretary as appropriate by the Commissioner of Social Security Social Security Trust Fund (ii) Subsection (f)(2)(B) of section 3720A of title 31, United States Code, is amended by striking Federal Old-Age and Survivors Insurance Trust Fund or the Federal Disability Insurance Trust Fund, whichever is certified to the Secretary of the Treasury as appropriate by the Commissioner of Social Security Social Security Trust Fund (3) False claims penalties Subsection (g)(2) of section 3806 of title 31, United States Code, is amended— (A) in subparagraph (B)— (i) by striking Secretary of Health and Human Services Commissioner of Social Security (ii) by striking Federal Old-Age and Survivors Insurance Trust Fund Social Security Trust Fund (B) in subparagraph (C)— (i) by striking Secretary of Health and Human Services Commissioner of Social Security (ii) by striking Federal Disability Insurance Trust Fund Social Security Trust Fund (4) Railroad Retirement Board Section 7 of the Railroad Retirement Act of 1974 ( 45 U.S.C. 231f (A) in subsection (b)(2), by striking Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund Social Security Trust Fund (B) in subsection (c)(2)— (i) by striking Secretary of Health, Education, and Welfare Commissioner of Social Security (ii) by striking Federal Old-Age and Survivors Insurance Trust Fund, the Federal Disability Insurance Trust Fund, Social Security Trust Fund (C) in subsection (c)(4), by striking Federal Old-Age and Survivors Insurance Trust Fund, the Federal Disability Insurance Trust Fund, Social Security Trust Fund (g) Rule of construction Effective beginning on January 1, 2020, any reference in law to the Federal Old-Age and Survivors Insurance Trust Fund Federal Disability Insurance Trust Fund (h) Effective date The amendments made by this section shall take effect on January 1, 2020.

Summary: Strengthen Social Security by Taxing Dynastic Wealth Act This bill returns the taxation of estates and gifts to levels that were in effect in 2009. This increases the maximum rate for estates and gifts to 45% and modifies exemptions. The bill also combines the existing Social Security trust funds into a single Social Security Trust Fund and provides for the deposit of increased estate and gift tax revenue into the consolidated trust fund.