[Congressional Record Volume 146, Number 102 (Wednesday, September 6, 2000)]
[Extensions of Remarks]
[Pages E1413-E1414]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         PASSAGE OF THE SOCIAL SECURITY BENEFITS TAX RELIEF ACT

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                           HON. DOUG BEREUTER

                              of nebraska

                    in the house of representatives

                      Wednesday, September 6, 2000

  Mr. BEREUTER. Mr. Speaker, because the House passed H.R. 4865, the 
Social Security Benefits Tax Relief Act, by a vote of 265-159, this 
Member encourages his colleagues to read the following editorial, from 
the August 5, 2000, edition of the Norfolk Daily News. This editorial 
highlights why the House of Representatives passed H.R. 4865. In 
particular, this editorial correctly states that the taxation of Social 
Security benefits was not within the original intent of those who 
created this system.


[[Page E1414]]



                  [From the Daily News, Aug. 5, 2000]

                     ``Contract'' Not Now Mentioned


  Tax reduction for Social Security benefits would aid elderly payers

       A modest tax cut proposal that would benefit some 9 million 
     Social Security recipients is apparently going nowhere 
     because of a threatened presidential veto.
       Under the plan, which won a 265-159 vote in the House, with 
     52 Democrats joining the Republican majority, the amount of 
     benefits subject to taxation could drop from 85 percent to 50 
     percent. That change would restore a tax level in effect 
     until the 1993 increase urged by President Clinton and for 
     which Vice President Gore cast the deciding vote.
       Given current surplus levels, the change is easily 
     affordable from Uncle Sam's standpoint. More than that, 
     however, the change is in keeping with the original 
     philosophy of the program. That is, to provide an old-age 
     benefit to workers from earnings on which taxes had already 
     been paid. It was much later that these benefits became an 
     important new source of tax revenue for the U.S. Treasury.
       It is of special interest that the same partisans who now 
     protest a reduction in this tax, since it might help 
     individual elderly people now earning as much as $34,000 
     annually or married couples at a $44,000 level, are the ones 
     who have long berated opponents as ``breaking a contract'' on 
     Social Security with any proposed alteration of benefits. 
     They were silent when the benefits were effectively reduced 
     with higher taxation.
       Taxing those benefits was not the original intent of those 
     who devised the system. Whatever implied contract existed was 
     long ago violated by the decision to lump the benefits with 
     other income and make it subject to regular taxation.
       The system long discriminated against Social Security 
     beneficiaries who worked for income rather than acquiring 
     their extra money from interest payments or dividends. The 
     imposition of the greater tax load--argued as necessary in 
     1993 in order to overcome deficits--did nothing to restore 
     equity.
       Much can and must be done to simplify the tax system, 
     including that applicable to the Social Security 
     beneficiaries, but such action must not preclude a simple 
     reduction in rates to reflect the fact that excessive federal 
     surpluses amount to a government taking of private wealth.

     

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