I
105TH CONGRESS
1ST SESSION
H. R. 2966
To amend the Internal Revenue Code of 1986 to allow a deduction for
employment taxes paid by employees and self-employed individuals, and
for other purposes.
IN THE HOUSE OF REPRESENTATIVES
NOVEMBER 8, 1997
Mr. SANDLIN 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 employment taxes paid by employees and
self-employed individuals, 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
Tax Relief Act’’.
SEC. 2. DEDUCTION FOR EMPLOYMENT TAXES OF EMPLOY-
EES 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
(17) the following new paragraph:
‘‘(18) EMPLOYEES’ EMPLOYMENT TAXES.—The
deduction 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’ EMPLOYMENT 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 for
the taxable year, and
‘‘(B) the taxes imposed by section 3201(a)
for the taxable year.
‘‘(2) SPECIAL
RULE
FOR
CERTAIN
AGREE-
MENTS.—For purposes of paragraph (1), taxes im-
posed by section 3101 shall include amounts equiva-
lent to such taxes imposed with respect to remunera-
tion covered by—
‘‘(A) an agreement under section 218 of
the Social Security Act, or
‘‘(B) an agreement under section 3121(l)
(relating to agreements entered into by Amer-
ican employers with respect to foreign affili-
ates).
‘‘(3) COORDINATION WITH SPECIAL REFUND OF
SOCIAL SECURITY TAXES.—Taxes shall not be taken
into account under paragraph (1) to the extent the
taxpayer is entitled to a special refund of such taxes
under section 6413(c).’’
(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 taxes imposed
by section 1401 for such taxable year.’’
(2) CONFORMING AMENDMENTS.—
(A) The heading for section 164(f) of such
Code is amended by striking ‘‘ONE-HALF OF’’.
(B) Section 1402(a)(12) of such Code is
amended—
(i) by striking ‘‘one-half of’’, and
(ii) by striking subparagraph (B) and
inserting:
‘‘(B) a percentage equal to the sum for
such year of the rates of tax under section
1401;’’.
(C) Clause (ii) of section 32(c)(2)(A) of
such Code is amended by inserting ‘‘one-half’’
before ‘‘deduction’’.
(D) Clause (vi) of section 401(c)(2) of
such Code is amended by inserting ‘‘only one-
half of’’ after ‘‘with regard to’’.
(E) Paragraph (3) of section 832(c) of
such Code is amended by inserting ‘‘(other than
subsection (g))’’ after ‘‘section 164’’.
(F) Paragraph (3) of section 834(c) of
such Code is amended by inserting ‘‘(other than
subsection (g))’’ after ‘‘section 164’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1997.
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