[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 105 Introduced in House (IH)]







106th CONGRESS
  1st Session
                                H. R. 105

   To amend the Internal Revenue Code of 1986 to allow individuals a 
                  deduction for Social Security taxes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 6, 1999

 Mr. Knollenberg 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 individuals a 
                  deduction for Social Security taxes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Taxpayer Fairness Act''.

SEC. 2. DEDUCTION FOR SOCIAL SECURITY TAXES.

    (a) In General.--Subsection (f) of section 164 of the Internal 
Revenue Code of 1986 (relating to deduction of one-half of self-
employment taxes) is amended to read as follows:
    ``(f) Deduction for Employee Portion of Social Security Taxes.--
            ``(1) In general.--In the case of an individual, 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 social security taxes for such taxable year.
            ``(2) Social security taxes.--For purposes of paragraph 
        (1)--
                    ``(A) In general.--The term `social security taxes' 
                means, with respect to any taxpayer for any taxable 
                year--
                            ``(i) the amount of the taxes imposed by 
                        sections 3101 and 3201(a) on amounts received 
                        by the taxpayer during the calendar year in 
                        which the taxable year begins,
                            ``(ii) 50 percent of the taxes imposed by 
                        section 1401 on the self-employment income of 
                        the taxpayer for the taxable year, and
                            ``(iii) 50 percent of the taxes imposed by 
                        section 3211(a)(1) on amounts received by the 
                        taxpayer during the calendar year in which the 
                        taxable year begins.
                    ``(B) Coordination with special refund of social 
                security taxes.--The term `social security taxes' shall 
                not include any taxes to the extent the taxpayer is 
                entitled to a special refund of such taxes under 
                section 6413(c).
                    ``(C) Special rule.--Any amounts paid pursuant to 
                an agreement under section 3121(l) (relating to 
                agreements entered into by American employers with 
                respect to foreign affiliates) which are equivalent to 
                the taxes referred to in subparagraph (A)(i) shall be 
                treated as taxes referred to in such subparagraph.
            ``(3) Deduction treated as attributable to trade or 
        business.--For purposes of this chapter, the deduction allowed 
        by paragraph (1) shall be treated as attributable to a trade or 
        business carried on by the taxpayer which does not consist of 
        the performance of services by the taxpayer as an employee.''
    (b) Conforming Amendment.--Paragraph (1) of section 275(a) of such 
Code is amended by inserting ``Except as provided in section 164(f),'' 
before ``Federal income''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1998.
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