I 
108TH CONGRESS 
1ST SESSION 
H. R. 607
To amend the Internal Revenue Code of 1986 to provide more revenue 
for the Social Security system by imposing a tax on certain unearned 
income and to provide tax relief for more than 80,000,000 individuals 
and families who pay more in Social Security taxes than income taxes 
by reducing the rate of the old age, survivors, and disability insurance 
Social Security payroll tax. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 5, 2003
Mr. OWENS 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 provide 
more revenue for the Social Security system by imposing 
a tax on certain unearned income and to provide tax 
relief for more than 80,000,000 individuals and families 
who pay more in Social Security taxes than income taxes 
by reducing the rate of the old age, survivors, and dis-
ability insurance Social Security payroll tax.
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 Protec-
tion and Tax Relief Act of 2003’’. 
SEC. 2. FINDINGS. 
Congress finds the following: 
(1) Working people are subject to social secu-
rity taxes as well as income taxes, and for over 90 
percent of the population the combined tax on 
earned income is higher than the income tax rates 
of 15 percent and 28 percent that apply to unearned 
income. 
(2) There is no logical reason why social secu-
rity taxes should be imposed only on earnings and 
not on unearned income (such as dividends, interest, 
rent income, and capital gains). 
SEC. 3. SOCIAL SECURITY TAX ON CERTAIN UNEARNED IN-
COME. 
(a) IN GENERAL.—Subchapter A of chapter 1 of the 
Internal Revenue Code of 1986 (relating to determination 
of tax liability) is amended by adding at the end the fol-
lowing new part: 
‘‘PART VIII—SOCIAL SECURITY TAX ON CERTAIN 
UNEARNED INCOME
‘‘Sec. 59B. Social security tax on certain unearned income.
‘‘SEC. 59B. SOCIAL SECURITY TAX ON CERTAIN UNEARNED 
INCOME. 
‘‘(a) IMPOSITION OF TAX.—In the case of an indi-
vidual, there is hereby imposed (in addition to any other 
tax imposed by this subtitle) for each taxable year a tax 
equal to 12 percent of such individual’s social security tax-
able income for such taxable year. 
‘‘(b) DEFINITIONS.—For purposes of this section—
‘‘(1) SOCIAL SECURITY TAXABLE INCOME.—The 
term ‘social security taxable income’ means adjusted 
gross income reduced by the greater of—
‘‘(A) the sum of—
‘‘(i) the standard deduction applicable 
to the taxpayer (or which would be applica-
ble if the taxpayer did not elect to itemize 
deductions for the taxable year), and 
‘‘(ii) the deduction for personal ex-
emptions under section 151 (determined 
without regard to subsection (d)(3) there-
of), or 
‘‘(B) the aggregate exempt income of the 
taxpayer for the taxable year. 
‘‘(2) EXEMPT INCOME.—The term ‘exempt in-
come’ means the following amounts to the extent in-
cluded in gross income:
SEC. 4. CHANGE IN RATES OF SOCIAL SECURITY TAXES. 
(a) DECREASE IN RATE OF OASDI TAX ON EMPLOY-
EES.—The table in section 3101(a) of the Internal Rev-
enue Code of 1986 is amended by striking the last item 
and inserting the following:
‘‘1990 or any year before 2004 ............................................... 6.2 percent
‘‘2004 or thereafter ..................................................................4.95 percent.’’
(b) DECREASE IN RATE OF OASDI TAX ON EMPLOY-
ERS.—The table in section 3111(a) of such Code is 
amended by striking the last item and inserting the fol-
lowing:
‘‘1990 or any year before 2004 ............................................... 6.2 percent
‘‘2004 or thereafter ..................................................................4.95 percent.’’
(c) DECREASE IN RATE OF OASDI TAX ON SELF-
EMPLOYMENT INCOME.—The table in section 1401(a) of 
such Code is amended by striking the last item and insert-
ing the following: 
‘‘December 31, 1989 ..................
January 1, 2004 ........................
12.4
‘‘December 31, 2003 ..................
....................................................
9.9.’’
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