[Congressional Record Volume 141, Number 62 (Tuesday, April 4, 1995)]
[Extensions of Remarks]
[Page E778]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


       REGARDING UNFAIRNESS OF THE SOCIAL SECURITY EARNINGS TEST

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                       HON. CHRISTOPHER H. SMITH

                             of new jersey

                    in the house of representatives

                         Tuesday, April 4, 1995
  Mr. SMITH of New Jersey. Mr. Speaker, this week we will have the 
opportunity to reduce the Social Security earnings test and bring 
parity to America's work force.
  This obsolete tax punishes senior citizens simply because they take 
the initiative to work in their retirement years to supplement their 
Social Security income. Furthermore, the earnings test is detrimental 
to America's workplace. It deprives the work force of the talents of 
our most experienced laborers.
  The earnings test stands as a monument to the decline of the work 
ethic upon which this Nation was founded. At a time when we are asking 
Americans to take more responsibility for their personal welfare, we 
cannot allow this Depression-era tax to continue to exist.
  The mechanics of the earnings test are simple, but it is founded upon 
no sound principle. The Federal Government instructs men and women 
between 65 and 69 years of age that if they earn more than $11,280 in a 
year, they will face an additional 33-percent tax. When combined with 
the 7.65-percent FICA withholding tax and a 15-percent Federal income 
tax, hard-working, low-income seniors are burdened with an effective 
marginal tax rate of 55.65 percent. The earnings test is wrong, 
counterproductive, and should be abolished.
  A key element to H.R. 1215 is the incremental increase of the 
earnings test threshold to $30,000 per year over a 5-year period. While 
it does not eliminate the earnings test, H.R. 1215 is a positive step 
toward ending this substantiated bias against working seniors and I 
encourage my colleagues to support it.
  I would also encourage my colleagues to work toward a full repeal of 
the earnings test, such as that introduced by Representative Howard 
Coble in H.R. 201. Both the reduction of the earnings test and its full 
repeal are important elements in our covenant with America's seniors.


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