I
103D CONGRESS
1ST SESSION
H. R. 2263
To amend the Internal Revenue Code of 1986 to reduce the burden of
social security taxes on lower and middle income individuals by allowing
a refundable credit for a portion of such taxes, and to repeal the limit
on the amount of wages subject to the employee OASDI taxes.
IN THE HOUSE OF REPRESENTATIVES
MAY 25, 1993
Mr. WHEAT 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 reduce
the burden of social security taxes on lower and middle
income individuals by allowing a refundable credit for
a portion of such taxes, and to repeal the limit on
the amount of wages subject to the employee OASDI
taxes.
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 ‘‘Social Security Tax
Fairness Act of 1993’’.
SEC. 2. CREDIT FOR PORTION OF EMPLOYEE OASDI TAXES.
(a) GENERAL RULE.—Subpart C of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to refundable credits) is amended by redes-
ignating section 35 as section 36 and by inserting after
section 34 the following new section:
‘‘SEC. 35. CREDIT FOR PORTION OF EMPLOYEE OASDI
TAXES.
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in-
dividual, there shall be allowed as a credit against the tax
imposed by this subtitle for the taxable year an amount
equal to the lesser of—
‘‘(1) such individual’s employee OASDI taxes
for the taxable year, or
‘‘(2) the tax credit limitation amount for the
calendar year in which such taxable year begins.
‘‘(b) TAX CREDIT LIMITATION AMOUNT.—For pur-
poses of subsection (a)—
‘‘(1) IN GENERAL.—Except as otherwise pro-
vided in this subsection, the tax credit limitation
amount for any calendar year is the amount which
the Secretary estimates will result in a reduction of
revenues to the Federal Old-Age and Survivors In-
surance Trust Fund for such calendar year equal to
the increase in revenues for such year attributable to
the application of—
‘‘(A) the tax imposed by section 3101(a) to
wages in excess of the contribution and benefit
base for such year, and
‘‘(B) the last sentence of section 1402(b).
‘‘(2) RAILROAD RETIREMENT.—In the case of
an individual all of whose employee OASDI taxes for
the taxable year are described in subparagraphs (B)
and (D) of subsection (c)(1), the tax credit limita-
tion amount for any calendar year is the amount
which the Railroad Retirement Board estimates will
result in a reduction of revenues to the Railroad Re-
tirement Account for such calendar year equal to the
increase in revenues for such year attributable to the
application of the taxes described in such subpara-
graphs to compensation in excess of the contribution
and benefit base for such year.
‘‘(3) ADJUSTMENTS.—The Secretary of the
Treasury and the Railroad Retirement Board, as the
case may be, shall make proper adjustments in the
determination of the tax credit limitation amounts to
the extent prior estimates were in excess of or less
than the correct amounts for the purpose of ensur-
ing that the balances of the Federal Old-Age and
Survivors Insurance Trust Fund and the Railroad
Retirement Account are not eroded by reason of the
credits allowed under this section, thereby maintain-
ing the long-term stability of such Trust Fund and
Account.
‘‘(c) EMPLOYEE OASDI TAXES.—For purposes of
this section—
‘‘(1) 
IN
GENERAL.—The 
term 
‘employee
OASDI taxes’ means, with respect to any taxpayer
for any taxable year—
‘‘(A) the amount of the taxes imposed by
section 3101(a) on amounts received by the tax-
payer during the calendar year in which the
taxable year begins,
‘‘(B) so much of the tax imposed by sec-
tion 3201(a) as is determined at a rate not
greater than the rate in effect under section
3101(a) on amounts received by the taxpayer
during the calendar year in which the taxable
year begins,
‘‘(C) 50 percent of the taxes imposed by
section 1401(a) on the self-employment income
of the taxpayer for the taxable year, and
‘‘(D) so much of the tax imposed by sec-
tion 3211(a)(1) as is determined at a rate not
greater than the rate in effect under section
3101(a) on amounts received by the taxpayer
during the calendar year in which the taxable
year begins.
‘‘(2) SPECIAL RULE.—Any amounts paid pursu-
ant to an agreement under section 3121(l) (relating
to agreements entered into by American employers
with respect to foreign affiliates) which are equiva-
lent to the taxes referred to in paragraph (1)(A)
shall be treated as taxes referred to in such para-
graph.
‘‘(3) CONTRIBUTION AND BENEFIT BASE.—The
term ‘contribution and benefit base’ means the con-
tribution and benefit base determined under section
230 of the Social Security Act.’’
(b) COST
OF CREDIT BORNE BY RETIREMENT
FUNDS.—
(1) OASDI TRUST
FUND.—The Secretary of
the Treasury shall pay, from time to time, from the
Federal Old-Age and Survivors Insurance Trust
Fund to the general fund of the Treasury amounts
equivalent to the credits allowed under section 35 of
the Internal Revenue Code of 1986 which are attrib-
utable to taxes described in subparagraphs (A) and
(C) of section 35(c)(1) of such Code.
(2) RAILROAD
RETIREMENT
ACCOUNT.—The
Railroad Retirement Board shall pay, from time to