I
104TH CONGRESS
2D SESSION
H. R. 3427
To amend the Internal Revenue Code of 1986 to allow a deduction for
the old-age, survivors, and disability insurance taxes paid by employees
and self-employed individuals, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MAY 9, 1996
Mr. NETHERCUTT
(for himself, Mr. HOSTETTLER, Mr. CRANE, Mr.
MCINTOSH, and Ms. DUNN of Washington) 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 allow a
deduction for the old-age, survivors, and disability insur-
ance taxes paid by employees and self-employed individ-
uals, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Working Americans
Wage Restoration Act’’.
SEC. 2. DEDUCTION FOR OLD-AGE, SURVIVORS, AND DIS-
ABILITY INSURANCE TAXES OF EMPLOYEES
AND SELF-EMPLOYED INDIVIDUALS.
(a) TAXES OF EMPLOYEES.—
(1) DEDUCTION ALLOWED IN ARRIVING AT AD-
JUSTED GROSS INCOME.—Section 62(a) of the Inter-
nal Revenue Code of 1986 (defining adjusted gross
income) is amended by inserting after paragraph
(15) the following new paragraph:
‘‘(16) EMPLOYEES’ OASDI TAXES.—The deduc-
tion allowed by section 164(g).’’
(2) DETERMINATION OF DEDUCTION.—Section
164 of such Code (relating to deduction for taxes)
is amended by redesignating subsection (g) as sub-
section (h) and by inserting after subsection (f) the
following new subsection:
‘‘(g) EMPLOYEES’ OASDI TAXES.—
‘‘(1) IN GENERAL.—In the case of an individ-
ual, in addition to the taxes described in subsection
(a), there shall be allowed as a deduction for the
taxable year an amount equal to the sum of—
‘‘(A) the taxes imposed by section 3101(a)
for the taxable year, and
‘‘(B) the taxes imposed by section 3201(a)
for the taxable year but only to the extent at-
tributable to the percentage in effect under sec-
tion 3101(a).
‘‘(2) SPECIAL
RULE
FOR
CERTAIN
AGREE-
MENTS.—For purposes of paragraph (1), taxes im-
posed by section 3101(a) shall include amounts
equivalent to such taxes imposed with respect to re-
muneration covered by an agreement under section
218 of the Social Security Act.
‘‘(3) COORDINATION
WITH
EARNED
INCOME
CREDIT.—No deduction shall be allowed under para-
graph (1) for any taxable year if the individual
elects to claim the earned income credit under sec-
tion 32 for the taxable year.’’
(3) CONFORMING
AMENDMENT.—The next to
last sentence of section 275(a) of such Code is
amended by inserting ‘‘or 164(g)’’ after ‘‘164(f)’’.
(b) DEDUCTION
FOR
SELF-EMPLOYED
INDIVID-
UALS.—
(1) IN
GENERAL.—Paragraph (1) of section
164(f) of the Internal Revenue Code of 1986 (relat-
ing to deduction for one-half of self-employment
taxes) is amended to read as follows:
‘‘(1) IN GENERAL.—In the case of an individ-
ual, in addition to the taxes described in subsection
(a), there shall be allowed as a deduction for the
taxable year an amount equal to the sum of—
‘‘(A) the taxes imposed by section 1401(a)
for such taxable year, plus
‘‘(B) 50 percent of the taxes imposed by
section 1401(b) for such taxable year.
In the case of an individual who elects to claim the
earned income credit under section 32 for the tax-
able year, only 50 percent of the taxes described in
subparagraph (A) shall be taken into account.’’
(2) CONFORMING AMENDMENTS.—
(A) Section 32(a)(1) of such Code is
amended by inserting ‘‘who elects the applica-
tion of this section’’ after ‘‘eligible individual’’.
(B) The heading for section 164(f) of such
Code is amended by striking ‘‘ONE-HALF’’ and
inserting ‘‘PORTION’’.
(C) Section 1402(a)(12) of such Code is
amended—
(i) by striking ‘‘one-half’’ the first
place it appears and inserting ‘‘portion’’,
and
(ii) by striking subparagraph (B) and
inserting:
‘‘(B) a percentage equal to the sum for
such year of the rate of tax under section
1401(a) and one-half of the rate of tax under
section 1401(b);’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1996.
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