,,ii #aaith ,,congress #ast ,session ,s4 #bgaf ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,september #d1 #bjbe ,mr4 ,gallego introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to repeal the inclusion in gross income of social security benefits1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,you ,earned ,it1 ,you ,keep ,it ,act4 #b4 ,repeal of inclusion in gross income of ,social ,security benefits 7a7 ,in general ,section #hf of the ,internal ,revenue ,code of #aihf 7relating to social security benefits7 is amended by adding at the end the following new subsection3 7g7 ,termination ,this section shall not apply to any taxable year beginning after the date of the enactment of this subsection4 4 7b7 ,social ,security trust funds held harmless ,there are hereby appropriated 7out of any money in the ,treasury not otherwise appropriated7 for each fiscal year to each fund under the ,social ,security ,act 7including the ,federal ,hospital ,insurance ,trust ,fund7 or the ,railroad ,retirement ,act of #aigd an amount equal to the reduction in the transfers to such fund for such fiscal year by reason of section #hf7;g7 of the ,internal ,revenue ,code of #aihf4 #c4 ,determining wages and self-employment income above contribution and benefit base after #bjbe 7a7 ,determination of wages above contribution and benefit base after #bjbe 7#a7 ,amendments to the ,internal ,revenue ,code of #aihf 7,a7 ,repeal of present law limitation ,section #caba7;a7 of the ,internal ,revenue ,code of #aihf is amended by striking paragraph 7#a74 7,b7 ,limitation on amount of wages ,section #caba of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following3 7aa7 ,limitation on amount of wages 7#a7 ,in general ,in the case of any calendar year in which the contribution and benefit base 7as determined under section #bcj of the ,social ,security ,act7 is less than #bej1jjj1 for purposes of the taxes imposed by sections #caja7;a7 and #caaa7;a71 the term wages does not include that part of the remuneration which1 after remuneration equal to such contribution and benefit base with respect to employment has been paid to an individual by an employer during the calendar year with respect to which such contribution and benefit base is effective1 is paid to such individual by such employer during the calendar year4 ,the preceding sentence shall not apply to that part of the remuneration paid to an individual after remuneration of #bej1jjj with respect to employment has been paid to such individual by an employer 7or any person related to1 or acting on behalf of1 such employer1 as determined by the ,secretary7 during the calendar year4 7#b7 ,successor employer ,if an employer 7hereinafter referred to as successor employer7 during any calendar year1 acquires substantially all the property used in a trade or business of another employer 7hereinafter referred to as a predecessor71 or used in a separate unit of a trade or business of a predecessor1 and immediately after the acquisition employs in his trade or business an individual who immediately prior to the acquisition was employed in the trade or business of such predecessor1 then1 for the purpose of determining whether the successor employer has paid remuneration with respect to employment equal to the contribution and benefit base 7as determined under section #bcj of the ,social ,security ,act7 to such individual during such calendar year1 any remuneration with respect to employment paid 7or considered under this paragraph as having been paid7 to such individual by such predecessor during such calendar year and prior to such acquisition shall be considered as having been paid by such successor employer4 7#c7 ,remuneration ,for purposes of this subsection1 the term remuneration does not include remuneration referred to in any paragraph of subsection 7a74 4 7,c7 ,application to railroad retirement 7i7 ,in general ,section #cbca7;e77#b77;,a7 of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new clause3 7iv7 ,limitation on exclusion ,for purposes of so much of the taxes imposed by sections #cbja7;a71 #cbaa7;a71 and #cbba7;a7 as are determined by reference to the rate in effect under section #caja7;a7 or #caaa7;a7-- 7,i7 in the case of any calendar year in which the contribution and benefit base 7as determined under section #bcj of the ,social ,security ,act7 is less than #bej1jjj1 clause 7i7 shall not apply to that part of the remuneration paid to an individual after remuneration of #bej1jjj for services rendered as an employee has been paid to such individual by an employer 7or any person related to1 or acting on behalf of1 such employer1 as determined by the ,secretary7 during the calendar year1 and 7,,ii7 in the case of any calendar year in which such contribution and benefit base equals or exceeds #bej1jjj1 clause 7i7 shall not apply4 4 7ii7 ,exclusion of remuneration which is not treated as compensation ,section #cbca7;e77#b77;,a77ii7 of the ,internal ,revenue ,code of #aihf is amended by inserting or 7iv7 after under clause 7i74 7,d7 ,conforming amendment ,section #cbca7;e77#b77;,c7 of the ,internal ,revenue ,code of #aihf is amended by striking the second sentence of section #caba7;a77#a7 and inserting section #caba7;aa77#b74 7#b7 ,amendment to the ,social ,security ,act ,section #bji7;a77#a77;,i7 of the ,social ,security ,act 7#db ,u4,s4,c4 #dji7;a77#a77;,i77 is amended by inserting before the semicolon at the end the following3 except that this subparagraph shall apply only to calendar years for which the contribution and benefit base 7as so determined7 is less than #bej1jjj1 and1 for such calendar years1 only to the extent that remuneration with respect to employment paid to such employee does not exceed #bej1jjj4 7b7 ,determination of self-,employment income above contribution and benefit base after #bjbe 7#a7 ,amendments to ,internal ,revenue ,code of #aihf 7,a7 ,in general ,section #adjb7;b7 of the ,internal ,revenue ,code of #aihf is amended to read as follows3 7b7 ,self-,employment income 7#a7 ,in general ,the term self-employment income means the net earnings from self-employment derived by an individual1 except that such term shall not include net earnings from self-employment if such net earnings for the taxable year are less than #djj4 7#b7 ,limitation on ,,oasdi tax ,for purposes of section #adja7;a71 the term self employment income shall not exceed the sum of-- 7,a7 the total compensation not in excess of the contribution and benefit base 7as determined under section #bcj of the ,social ,security ,act7 which is effective for the calendar year in which such taxable year begins1 reduced by the amount of wages not in excess of such base paid to such individual during the taxable year1 plus 7,b7 the total compensation in excess of the greater of-- 7i7 #bej1jjj1 or 7ii7 the amount of wages paid to such individual during the taxable year4 7#c7 ,definition and special rules 7,a7 ,total compensation ,for purposes of paragraph 7#b71 the term total compensation means the sum of the net earnings from self-employment and the amount of wages paid to such individual during the taxable year4 7,b7 ,wages ,for purposes of this subsection1 the term wages-- 7i7 includes such remuneration paid to an employee for services included under an agreement entered into pursuant to the provisions of section #caba7l7 7relating to coverage of citizens of the ,united ,states who are employees of foreign affiliates of ,american employers7 as would be wages under section #caba7;a7 if such services constituted employment under section #caba7;b71 and 7ii7 includes compensation which is subject to the tax imposed by section #cbja or #cbaa 7or would be so subject but for paragraph 7#b7 of section #cbca7;e774 7,c7 ,nonresident aliens ,a nonresident alien individual shall not be treated as an individual for purposes of paragraph 7#a71 except as provided by an agreement under section #bcc of the ,social ,security ,act4 ,an individual who is not a citizen of the ,united ,states but who is a resident of the ,commonwealth of ,puerto ,rico1 the ,virgin ,islands1 ,guam1 or ,american ,samoa shall not1 for purposes of this chapter1 be considered to be a nonresident alien individual4 7,d7 ,church employee ,in the case of church employee income1 the special rules of subsection 7j77#b7 shall apply for purposes of paragraph 7#a74 4 7,b7 ,conforming amendments 7i7 ,section #adjb7;j77#b77;,a7 of the ,internal ,revenue ,code of #aihf is amended by striking all that precedes shall be applied and inserting3 7,a7 ,separate application of de minimis rule ,subsection 7b77#a7 4 7ii7 ,section #adjb7;j77#b77;,b7 of such ,code is amended by striking paragraph 7#b7 of subsection 7b7 and inserting subsection 7b77#a74 7#b7 ,amendments to the ,social ,security ,act 7,a7 ,in general ,section #baa7;b77#a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #daa7;b77 is amended-- 7i7 in subparagraph 7,i7-- 7,i7 by inserting and before #bjbf after #aigd2 and 7,,ii7 by striking or at the end2 and 7ii7 by adding at the end the following3 7,j7 ,for any taxable year beginning in any calendar year after #bjbe1 an amount equal to-- 7i7 #bej1jjj1 reduced 7but not below zero7 by 7ii7 the sum of-- 7,i7 the part of the net earnings from self-employment 7if any7 which is not in excess of-- 7aa7 the amount equal to the contribution and benefit base 7as determined under section #bcj7 which is effective for the calendar year in which such taxable year begins1 minus 7bb7 the amount of the wages paid to such individual during such taxable year1 plus 7,,ii7 the amount of the wages paid to such individual during such taxable year which is in excess of the amount in subclause 7,i77aa72 or 4 7,b7 ,phaseout ,section #baa7;b7 of the ,social ,security ,act 7#db ,u4,s4,c4 #daa7;b77 is amended by adding at the end the following3 ,paragraph 7#a7 shall apply only to taxable years beginning in calendar years for which the contribution and benefit base 7as determined under section #bcj7 is less than #bej1jjj44 7c7 ,special rule for wages from multiple employers which total in excess of #bej1jjj 7#a7 ,in general ,subchapter ,a of chapter #ba of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new section3 #cajc4 ,special rules for remuneration from multiple employers 7a7 ,in general ,in the case of an employee receiving wages from more than one employer during a calendar year1 there is hereby imposed a tax on such employee 7for the last taxable year beginning in the calendar year the wages are received7 equal to the excess 7if any7 of-- 7#a7 the tax that would have been imposed by section #caja7;a7 if such wages had been received from one employer1 over 7#b7 the aggregate tax imposed by such section with respect to such wages4 7b7 ,coordination with special refund provision ,no credit shall be determined under section #ca7;b7 with respect to any employee for any taxable year unless the amount described in subsection 7a77#a7 with respect to wages received during the calendar year in which such taxable year begins exceeds the amount described in subsection 7a77#b7 with respect to such wages1 and the amount of such credit so determined shall not exceed such excess4 7c7 ,wages ,for purposes of this section1 the term wages shall have the same meaning as when used in section #adjb7;b74 7d7 ,application to tier ,i railroad retirement tax ,in the case of compensation 7as defined in section #cbca7;e771 for purposes of applying subsections 7a7 and 7b71 the reference to the tax that would have been imposed by section #caja7;a7 shall be treated as including a reference to so much of the tax that would have been imposed on such compensation under section #cbja7;a7 or #cbaa7;a7 7or would have been so imposed but for paragraph 7#b7 of section #cbca7;e77 as is determined by reference to the rate of tax in effect under section #caja7;a74 4 7#b7 ,failure by individual to pay estimated income tax ,subsection 7m7 of section #ffed of the ,internal ,revenue ,code of #aihf is amended to read as follows3 7m7 ,special rule for certain employment taxes ,for purposes of this section1 the tax imposed by sections #caja7;b77#b7 7to the extent not withheld7 and the tax imposed by section #cajc shall be treated as taxes imposed by chapter #b4 4 7#c7 ,clerical amendment ,the table of sections for subchapter ,a of chapter #ba of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new item3 ,sec4 #cajc4 ,special rules for remuneration from multiple employers4 4 7d7 ,conforming change to national average wage index ,section #bji7k7 of the ,social ,security ,act 7#db ,u4,s4,c4 #dji7k77 is amended-- 7#a7 in paragraph 7#a71 by inserting and to paragraph 7#d7 after paragraph 7#b72 and 7#b7 by adding at the end the following3 7#d7 ,for each calendar year after #bjbe1 the national average wage index as defined in this section for such calendar year shall be deemed to be the national average wage index determined under the preceding paragraphs of this section increased by the following percentage3 7,a7 ,for calendar years #bjbf through #bjcj1 #j4g percent4 7,b7 ,for calendar years #bjcb through #bjcf1 #j4h percent4 7,c7 ,for calendar years after #bjch1 #j4i percent4 4 7e7 ,effective dates 7#a7 ,in general ,the amendments made by subsections 7a7 and 7c7 shall apply to remuneration paid in calendar years after #bjbe4 7#b7 ,self-employment income ,the amendments made by subsection 7b7 shall apply to taxable years beginning after ,december #ca1 #bjbe4 #d4 ,including earnings over #bej1jjj in ,social ,security benefit formula 7a7 ,inclusion of earnings over #bej1jjj in determination of primary insurance amounts ,section #bae7;a77#a77;,a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #dae7;a77#a77;,a77 is amended-- 7#a7 in clause 7ii71 by striking and at the end2 7#b7 in clause 7iii71 by inserting and at the end2 and 7#c7 by inserting after clause 7iii7 the following3 7iv7 #b percent of the individual's excess average indexed monthly earnings 7as defined in subsection 7b77#e77;,a774 4 7b7 ,definition of excess average indexed monthly earnings ,section #bae7;b7 of the ,social ,security ,act 7#db ,u4,s4,c4 #dae7;b77 is amended-- 7#a7 by striking wages and self-employment income each place such terms appear and inserting basic wages and basic self-employment income1 respectively2 and 7#b7 by adding at the end the following3 7#e7 7,a7 ,an individual's excess average indexed monthly earnings shall be equal to the amount of the individual's average indexed monthly earnings that would be determined under this subsection by substituting excess wages for basic wages and excess self-employment income for basic self-employment income each place such terms appear in this subsection 7except in this paragraph74 7,b7 ,for purposes of this subsection-- 7i7 the term basic wages means that portion of the wages of an individual paid in a year that does not exceed the contribution and benefit base for the year2 7ii7 the term basic self-employment income means that portion of the self-employment income of an individual credited to a year that does not exceed an amount equal to the contribution and benefit base for the year minus the amount of the wages paid to the individual in the year2 7iii7 the term excess wages means that portion of the wages of an individual paid in a year after #bjbe in excess of the higher of #bej1jjj or the contribution and benefit base for the year2 and 7iv7 the term excess self-employment income means that portion of the self-employment income of an individual credited to a year after #bjbe in excess of the higher of #bej1jjj or such contribution and benefit base for the year4 4 7c7 ,conforming amendments ,title ,,ii of the ,social ,security ,act is amended-- 7#a7 in section #bjc7;a77#f77;,a7 7#db ,u4,s4,c4 #djc7;a77#f77;,a771 by striking #he percent of such individual's average indexed monthly earnings and inserting the sum of #he percent of such individual's average indexed monthly earnings and #a percent of such individual's excess average indexed monthly earnings 7as defined in section #bae7;b77#e77;,a772 7#b7 in section #bab 7#db ,u4,s4,c4 #dab71 by inserting excess average indexed monthly earnings1 after average indexed monthly earnings1 each place it appears2 and 7#c7 in section #bae7;e77#a7 7#db ,u4,s4,c4 #dae7;e77#a771 by inserting and before #bjbf after after #aigd4 7d7 ,effective date ,the amendments made by this section shall apply with respect to individuals who initially become eligible 7within the meaning of section #bae7;a77#c77;,b7 of the ,social ,security ,act7 for old-age or disability insurance benefits under title ,,ii of the ,social ,security ,act1 or who die 7before becoming eligible for such benefits71 in any calendar year after #bjbe4 7e7 ,holding ,,ssi1 medicaid1 and ,,chip beneficiaries harmless ,for purposes of determining the income of an individual to establish eligibility for1 and the amount of1 benefits payable under title ,,xvi of the ,social ,security ,act1 eligibility for medical assistance under the ,state plan under title ,,xix 7or a waiver of such plan71 or eligibility for child health assistance under the ,state child health plan under title ,,xxi 7or a waiver of the plan71 the amount of any benefit to which the individual is entitled under title ,,ii of such ,act shall be deemed not to exceed the amount of the benefit that would be determined for such individual under such title as in effect on the day before the date of the enactment of this ,act4