Save Social Security Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 567 To amend title II of the Social Security Act and the Internal Revenue Code of 1986 to modify the portion of wages and self-employment income subject to payroll taxes, and for other purposes. IN THE HOUSE OF REPRESENTATIVES JANUARY 15, 2019 Mr. CRIST introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend title II of the Social Security Act and the Internal Revenue Code of 1986 to modify the portion of wages and self-employment income subject to payroll taxes, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Save Social Security 4 Act of 2019’’. 5 VerDate Sep 11 2014 03:25 Jan 29, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H567.IH H567 kjohnson on DSK79L0C42 with BILLS 2 •HR 567 IH SEC. 2. DETERMINATION OF WAGES AND SELF-EMPLOY- 1 MENT INCOME ABOVE CONTRIBUTION AND 2 BENEFIT BASE AFTER 2019. 3 (a) DETERMINATION OF WAGES ABOVE CONTRIBU- 4 TION AND BENEFIT BASE AFTER 2019.— 5 (1) AMENDMENTS TO THE INTERNAL REVENUE 6 CODE.— 7 (A) IN GENERAL.—Section 3121(a)(1) of 8 the Internal Revenue Code of 1986 is amended 9 by inserting after ‘‘such calendar year.’’ the fol- 10 lowing: ‘‘The preceding sentence shall apply 11 only to calendar years for which the contribu- 12 tion and benefit base (as so determined) is less 13 than $300,000, and, for such calendar years, 14 only to so much of the remuneration paid to 15 such employee by such employer with respect to 16 employment as does not exceed $300,000.’’. 17 (B) CONFORMING AMENDMENT.—Section 18 3121(a)(1) of such Code is amended by striking 19 ‘‘Act) to’’ and inserting ‘‘Act), or in excess of 20 $300,000, to’’. 21 (2) AMENDMENT TO THE SOCIAL SECURITY 22 ACT.—Section 209(a)(1)(I) of the Social Security 23 Act (42 U.S.C. 409(a)(1)(I)) is amended by insert- 24 ing before the semicolon at the end the following: 25 ‘‘except that this subparagraph shall apply only to 26 VerDate Sep 11 2014 03:25 Jan 29, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H567.IH H567 kjohnson on DSK79L0C42 with BILLS 3 •HR 567 IH calendar years for which the contribution and ben- 1 efit base (as so determined) is less than $300,000, 2 and, for such calendar years, only to the extent re- 3 muneration paid to such employee by such employer 4 with respect to employment does not exceed 5 $300,000’’. 6 (3) EFFECTIVE DATE.—The amendments made 7 by this subsection shall apply with respect to remu- 8 neration paid in calendar years after 2019. 9 (b) DETERMINATION OF SELF-EMPLOYMENT IN- 10 COME ABOVE CONTRIBUTION AND BENEFIT BASE AFTER 11 2019.— 12 (1) AMENDMENTS TO THE INTERNAL REVENUE 13 CODE.— 14 (A) IN GENERAL.—Section 1402(b)(1) of 15 the Internal Revenue Code of 1986 is amended 16 to read as follows: 17 ‘‘(1) in the case of the tax imposed by section 18 1401(a)— 19 ‘‘(A) in the case of a taxpayer with wages 20 (as determined under section 3121(a) without 21 regard to paragraph (1) of such section) less 22 than $300,000 and more than the contribution 23 and benefit base (as determined under section 24 230 of the Social Security Act) which is effec- 25 VerDate Sep 11 2014 03:25 Jan 29, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H567.IH H567 kjohnson on DSK79L0C42 with BILLS 4 •HR 567 IH tive for the calendar year in which such taxable 1 year begins, the lesser of— 2 ‘‘(i) the excess of $300,000 over the 3 wages (as so determined) paid to such in- 4 dividual during such taxable year, or 5 ‘‘(ii) the net earnings from self-em- 6 ployment for the taxable year, and 7 ‘‘(B) in the case of a taxpayer with wages 8 (as so determined) less than or equal to such 9 contribution and benefit base and for whom the 10 sum, for the taxable year, of net earnings from 11 self-employment and wages (as so determined) 12 paid to such individual is greater than such 13 contribution and benefit base, the lesser of— 14 ‘‘(i) the excess of such sum over such 15 contribution and benefit base, or 16 ‘‘(ii) the excess of $300,000 over such 17 contribution and benefit base.’’. 18 (B) PHASEOUT.—Section 1402(b) of such 19 Code is amended by adding at the end the fol- 20 lowing: ‘‘Paragraph (1) shall apply only to tax- 21 able years beginning in calendar years for which 22 the contribution and benefit base (as deter- 23 mined under section 230 of the Social Security 24 Act) is less than $300,000.’’. 25 VerDate Sep 11 2014 03:25 Jan 29, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H567.IH H567 kjohnson on DSK79L0C42 with BILLS 5 •HR 567 IH (2) AMENDMENTS TO THE SOCIAL SECURITY 1 ACT.— 2 (A) IN GENERAL.—Section 211(b)(1) of 3 the Social Security Act (42 U.S.C. 411(b)) is 4 amended— 5 (i) in subparagraph (I)— 6 (I) by inserting ‘‘and before 7 2020’’ after ‘‘1974’’; and 8 (II) by striking ‘‘or’’ at the end; 9 and 10 (ii) by adding at the end the fol- 11 lowing: 12 ‘‘(J) For any taxable year beginning in any 13 calendar year after 2019, an amount equal to— 14 ‘‘(i) in the case of an individual with 15 wages (as determined under section 209(a) 16 without regard to paragraph (1) of such 17 section) less than $300,000 and more than 18 the contribution and benefit base (as deter- 19 mined under section 230 of the Social Se- 20 curity Act) which is effective for the cal- 21 endar year in which such taxable year be- 22 gins, the lesser of— 23 ‘‘(I) the excess of $300,000 over 24 the wages (as so determined) paid to 25 VerDate Sep 11 2014 03:25 Jan 29, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H567.IH H567 kjohnson on DSK79L0C42 with BILLS 6 •HR 567 IH such individual during such taxable 1 year, or 2 ‘‘(II) the net earnings from self- 3 employment for the taxable year, and 4 ‘‘(ii) in the case of a taxpayer with 5 wages (as so determined) less than or 6 equal to such contribution and benefit base 7 and for whom the sum, for the taxable 8 year, of net earnings from self-employment 9 and wages (as so determined) paid to such 10 individual is greater than such contribution 11 and benefit base, the lesser of— 12 ‘‘(I) the excess of such sum over 13 such contribution and benefit base, or 14 ‘‘(II) the excess of $300,000 over 15 such contribution and benefit base.’’. 16 (B) PHASEOUT.—Section 211(b) of the 17 Social Security Act (42 U.S.C. 411(b)) is 18 amended by adding at the end the following: 19 ‘‘Paragraph (1) shall apply only to taxable 20 years beginning in calendar years for which the 21 contribution and benefit base (as determined 22 under section 230) is less than $300,000.’’. 23 (3) EFFECTIVE DATE.—The amendments made 24 by this subsection shall apply to net earnings from 25 VerDate Sep 11 2014 03:25 Jan 29, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H567.IH H567 kjohnson on DSK79L0C42 with BILLS 7 •HR 567 IH self-employment derived, and remuneration paid, in 1 calendar years after 2019. 2 SEC. 3. INCLUSION OF EARNINGS OVER $300,000 IN SOCIAL 3 SECURITY BENEFIT FORMULA. 4 (a) INCLUSION OF EARNINGS OVER $300,000 IN DE- 5 TERMINATION OF PRIMARY INSURANCE AMOUNTS.—Sec- 6 tion 215(a)(1)(A) of the Social Security Act (42 U.S.C. 7 415(a)(1)(A)) is amended— 8 (1) in clause (ii), by striking ‘‘and’’ at the end; 9 (2) in clause (iii), by inserting ‘‘and’’ at the 10 end; and 11 (3) by inserting after clause (iii) the following: 12 ‘‘(iv) 3 percent of the individual’s excess aver- 13 age indexed monthly earnings (as defined in sub- 14 section (b)(5)(A)).’’. 15 (b) DEFINITION OF EXCESS AVERAGE INDEXED 16 MONTHLY EARNINGS.—Section 215(b) of the Social Secu- 17 rity Act (42 U.S.C. 415(b)) is amended— 18 (1) by striking ‘‘wages’’ and ‘‘self-employment 19 income’’ each place such terms appear and inserting 20 ‘‘basic wages’’ and ‘‘basic self-employment income’’, 21 respectively; and 22 (2) by adding at the end the following: 23 ‘‘(5)(A) An individual’s excess average indexed 24 monthly earnings shall be equal to the amount of the indi- 25 VerDate Sep 11 2014 03:25 Jan 29, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H567.IH H567 kjohnson on DSK79L0C42 with BILLS 8 •HR 567 IH vidual’s average indexed monthly earnings that would be 1 determined under this subsection by substituting ‘excess 2 wages’ for ‘basic wages’ and ‘excess self-employment in- 3 come’ for ‘basic self-employment income’ each place such 4 terms appear in this subsection (except in this paragraph). 5 ‘‘(B) For purposes of this subsection— 6 ‘‘(i) the term ‘basic wages’ means that portion 7 of the wages of an individual paid in a year that 8 does not exceed the contribution and benefit base for 9 the year; 10 ‘‘(ii) the term ‘basic self-employment income’ 11 means that portion of the self-employment income of 12 an individual credited to a year that does not exceed 13 an amount equal to the contribution and benefit 14 base for the year minus the amount of the wages 15 paid to the individual in the year; 16 ‘‘(iii) the term ‘excess wages’ means that por- 17 tion of the wages of an individual paid in a year 18 after 2019 in excess of the higher of $300,000 or 19 the contribution and benefit base for the year; and 20 ‘‘(iv) the term ‘excess self-employment income’ 21 means that portion of the self-employment income of 22 an individual credited to a year after 2019 in excess 23 of the higher of $300,000 or such contribution and 24 benefit base.’’. 25 VerDate Sep 11 2014 03:25 Jan 29, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H567.IH H567 kjohnson on DSK79L0C42 with BILLS 9 •HR 567 IH (c) CONFORMING AMENDMENT.—Section 215(e)(1) 1 of the Social Security Act (42 U.S.C. 415(e)(1)) is amend- 2 ed by inserting ‘‘and before 2020’’ after ‘‘1974’’. 3 (d) EFFECTIVE DATE.—The amendments made by 4 this section shall apply with respect to individuals who ini- 5 tially become eligible (within the meaning of section 6 215(a)(3)(B) of the Social Security Act) for old-age or dis- 7 ability insurance benefits under title II of the Social Secu- 8 rity Act, or who die (before becoming eligible for such ben- 9 efits), in any calendar year after 2019. 10 SEC. 4. MODIFICATION OF AMOUNT OF SOCIAL SECURITY 11 BENEFITS INCLUDED IN GROSS INCOME. 12 (a) IN GENERAL.—Section 86 of the Internal Rev- 13 enue Code of 1986 is amended by striking subsections (a), 14 (b), and (c) and inserting the following: 15 ‘‘(a) IN GENERAL.—Gross income for the taxable 16 year of any taxpayer described in subsection (b) (notwith- 17 standing section 207 of the Social Security Act) includes 18 social security benefits in an amount equal to the lesser 19 of— 20 ‘‘(1) 85 percent of the social security benefits 21 received during the taxable year, or 22 ‘‘(2) 85 percent of the excess described in sub- 23 section (b). 24 VerDate Sep 11 2014 03:25 Jan 29, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H567.IH H567 kjohnson on DSK79L0C42 with BILLS 10 •HR 567 IH ‘‘(b) TAXPAYERS TO WHOM SUBSECTION (a) AP- 1 PLIES.—A taxpayer is described in this subsection if— 2 ‘‘(1) the sum of— 3 ‘‘(A) the modified adjusted gross income of 4 the taxpayer for the taxable year, plus 5 ‘‘(B) 85 percent of the social security bene- 6 fits received during the taxable year, exceeds 7 ‘‘(2) $100,000. 8 ‘‘(c) MODIFIED ADJUSTED GROSS INCOME.—For 9 purposes of this section, the term ‘modified adjusted gross 10 income’ means adjusted gross income— 11 ‘‘(1) determined without regard to this section 12 and sections 135, 137, 199, 221, 222, 911, 931, and 13 933, and 14 ‘‘(2) increased by the amount of interest re- 15 ceived or accrued by the taxpayer during the taxable 16 year which is exempt from tax.’’. 17 (b) SOCIAL SECURITY TRUST FUNDS HELD HARM- 18 LESS.—There are hereby appropriated (out of any money 19 in the Treasury not otherwise appropriated) for each fiscal 20 year to each fund under the Social Security Act or the 21 Railroad Retirement Act of 1974 an amount equal to the 22 reduction in the transfers to such fund for such fiscal year 23 by reason of the amendments made by subsection (a). 24 VerDate Sep 11 2014 03:25 Jan 29, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H567.IH H567 kjohnson on DSK79L0C42 with BILLS 11 •HR 567 IH (c) EFFECTIVE DATE.—The amendments made by 1 this section shall apply to taxable years ending after the 2 date of the enactment of this Act. 3 Æ VerDate Sep 11 2014 03:25 Jan 29, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6301 E:\BILLS\H567.IH H567 kjohnson on DSK79L0C42 with BILLS