II
118THCONGRESS
1
STSESSION S. 1174
To amend the Internal Revenue Code of 1986 to increase funding for Social
Security and Medicare.
IN THE SENATE OF THE UNITED STATES
APRIL18, 2023
Mr. W
HITEHOUSEintroduced the following bill; which was read twice and
referred to the Committee on Finance
A BILL
To amend the Internal Revenue Code of 1986 to increase
funding for Social Security and Medicare.
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 ‘‘Medicare and Social 4
Security Fair Share Act’’. 5
SEC. 2. MODIFICATION OF PAYROLL TAXES. 6
(a) W
AGEBASE FORTAXESFUNDINGSOCIALSECU-7
RITY.— 8
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(1) IN GENERAL.—Paragraph (1) of section 1
3121(a) of the Internal Revenue Code of 1986 is 2
amended to read as follows: 3
‘‘(1) in the case of taxes imposed by sections 4
3101(a) and 3111(a), for any calendar year in which 5
the contribution and benefit base (as determined 6
under section 230 of the Social Security Act) is less 7
than $400,000, so much of the remuneration (other 8
than remuneration referred to in the succeeding 9
paragraphs of this subsection) with respect to em-10
ployment that has been paid to an individual by an 11
employer during the calendar year as exceeds such 12
contribution and benefit base but does not exceed 13
$400,000;’’. 14
(2) C
ONFORMING AMENDMENTS .— 15
(A) S
UCCESSOR EMPLOYERS .—Section 16
3121 of the Internal Revenue Code of 1986 is 17
amended by adding at the end the following 18
new subsection: 19
‘‘(aa) S
PECIALRULES FORSUCCESSOREMPLOY-20
ERS.—For purposes of subsection (a)(1), if an employer 21
(hereinafter referred to as successor employer) during any 22
calendar year acquires substantially all the property used 23
in a trade or business of another employer (hereinafter 24
referred to as a predecessor), or used in a separate unit 25
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•S 1174 IS
of a trade or business of a predecessor, and immediately 1
after the acquisition employs in his trade or business an 2
individual who immediately prior to the acquisition was 3
employed in the trade or business of such predecessor, 4
then, for the purpose of determining the amount of remu-5
neration paid by the successor employer under such sub-6
section, any remuneration (other than remuneration re-7
ferred to in the paragraphs succeeding paragraph (1) of 8
subsection (a)) with respect to employment paid (or con-9
sidered under this subsection as having been paid) to such 10
individual by such predecessor during such calendar year 11
and prior to such acquisition shall be considered as having 12
been paid by such successor employer.’’. 13
(B) A
PPLICATION TO RAILROAD RETIRE -14
MENT TAXES .—Clause (i) of section 15
3231(e)(2)(A) of such Code is amended to read 16
as follows: 17
‘‘(i) I
N GENERAL.—For any calendar 18
year in which the applicable base is less 19
than $400,000, the term ‘compensation’ 20
does not include so much of the remunera-21
tion paid during any calendar year to an 22
individual by an employer for services ren-23
dered as an employee to such employer as 24
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exceeds the applicable base but does not 1
exceed $400,000.’’. 2
(b) F
URTHERADDITIONALHOSPITALINSURANCE 3
T
AX ONVERYHIGHINCOMETAXPAYERS.— 4
(1) I
N GENERAL.—Section 3101(b) of the In-5
ternal Revenue Code of 1986 is amended by adding 6
at the end the following new paragraph: 7
‘‘(3) F
URTHER ADDITIONAL TAX .—In addition 8
to the tax imposed by paragraphs (1) and (2) and 9
the preceding subsection, there is hereby imposed on 10
every taxpayer (other than a corporation, estate, or 11
trust) a tax equal to 1.2 percent of wages which are 12
received with respect to employment (as defined in 13
section 3121(b)) during the taxable year which are 14
in excess of— 15
‘‘(A) in the case of a joint return, 16
$500,000, 17
‘‘(B) in the case of a married taxpayer (as 18
defined in section 7703) filing a separate re-19
turn,
1
∕2of the dollar amount determined under 20
subparagraph (A), and 21
‘‘(C) in any other case, $400,000.’’. 22
(2) C
OLLECTION OF TAX .—Section 3102 of 23
such Code is amended by adding at the end the fol-24
lowing new subsection: 25
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‘‘(g) SPECIALRULES FORFURTHERADDITIONAL 1
T
AX.— 2
‘‘(1) I
N GENERAL.—In the case of any tax im-3
posed by section 3101(b)(3), subsection (a) shall 4
only apply to the extent to which the taxpayer re-5
ceives wages from the employer in excess of 6
$400,000, and the employer may disregard the 7
amount of wages received by such taxpayer’s spouse. 8
‘‘(2) C
OLLECTION OF AMOUNTS NOT WITH -9
HELD.—To the extent that the amount of any tax 10
imposed by section 3101(b)(3) is not collected by the 11
employer, such tax shall be paid by the employee. 12
‘‘(3) T
AX PAID BY RECIPIENT.—If an employer, 13
in violation of this chapter, fails to deduct and with-14
hold the tax imposed by section 3101(b)(3) and 15
thereafter the tax is paid by the employee, the tax 16
so required to be deducted and withheld shall not be 17
collected from the employer, but this paragraph shall 18
in no case relieve the employer from liability for any 19
penalties or additions to tax otherwise applicable in 20
respect of such failure to deduct and withhold.’’. 21
(c) E
FFECTIVEDATE.—The amendments made by 22
this section shall apply to remuneration paid, and taxable 23
years beginning, on or after January 1 of the first cal-24
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endar year that begins after the date of enactment of this 1
Act. 2
SEC. 3. MODIFICATION OF TAXES ON SELF-EMPLOYMENT 3
INCOME. 4
(a) T
AX ONNETEARNINGSFROMSELF-EMPLOY-5
MENT UP TO CONTRIBUTION AND BENEFITBASE AND 6
M
ORETHAN$400,000.—Paragraph (1) of section 7
1402(b) of the Internal Revenue Code of 1986 is amended 8
to read as follows: 9
‘‘(1) in the case of the tax imposed by section 10
1401(a) for any taxable year beginning in a calendar 11
year in which the contribution and benefit base (as 12
determined under section 230 of the Social Security 13
Act) is less than $400,000, the excess (if any) of— 14
‘‘(A) so much of the net earnings from 15
self-employment which is in excess of— 16
‘‘(i) an amount equal to the contribu-17
tion and benefit base (as determined under 18
section 230 of the Social Security Act) 19
which is effective for the calendar year in 20
which such taxable year begins, reduced 21
(but not below zero) by 22
‘‘(ii) the amount of the wages paid to 23
such individual during such taxable year, 24
over 25
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•S 1174 IS
‘‘(B) the sum of— 1
‘‘(i) the excess (if any) of— 2
‘‘(I) the net earnings from self- 3
employment reduced by the excess (if 4
any) of subparagraph (A)(i) over sub-5
paragraph (A)(ii), over 6
‘‘(II) $400,000, reduced by such 7
contribution and benefit base, plus 8
‘‘(ii) the amount of the wages paid to 9
such individual during such taxable year in 10
excess of such contribution and benefit 11
base and not in excess of $400,000; or’’. 12
(b) F
URTHERADDITIONALHOSPITALINSURANCE 13
T
AX ONVERYHIGHINCOMETAXPAYERS.— 14
(1) I
N GENERAL.—Section 1401(b) of the In-15
ternal Revenue Code of 1986 is amended by adding 16
at the end the following new paragraph: 17
‘‘(3) F
URTHER ADDITIONAL TAX .— 18
‘‘(A) I
N GENERAL.—In addition to the tax 19
imposed by paragraphs (1) and (2) and the pre-20
ceding subsection, there is hereby imposed on 21
every taxpayer (other than a corporation, es-22
tate, or trust) for each taxable year a tax equal 23
to 1.2 percent of the self-employment income 24
for such taxable year which is in excess of— 25
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‘‘(i) in the case of a joint return, 1
$500,000, 2
‘‘(ii) in the case of a married taxpayer 3
(as defined in section 7703) filing a sepa-4
rate return,
1
∕2of the dollar amount deter-5
mined under subparagraph (A), and 6
‘‘(iii) in any other case, $400,000. 7
‘‘(B) C
OORDINATION WITH FICA .—The 8
amounts under clause (i), (ii), or (iii) (which-9
ever is applicable) of subparagraph (A) shall be 10
reduced (but not below zero) by the amount of 11
wages taken into account in determining the 12
tax imposed under section 3101(b)(3) with re-13
spect to the taxpayer.’’. 14
(2) N
O DEDUCTION FOR FURTHER ADDITIONAL 15
TAX.— 16
(A) I
N GENERAL.—Section 164(f) of such 17
Code is amended by striking ‘‘section 18
1401(b)(2)’’ and inserting ‘‘paragraphs (2) and 19
(3) of section 1401(b)’’. 20
(B) D
EDUCTION FOR NET EARNINGS FROM 21
SELF-EMPLOYMENT.—Section 1402(a)(12)(B) 22
of such Code is amended by striking ‘‘the rate 23
imposed under paragraph (2) of section 24
1401(b)’’ and inserting ‘‘the rates imposed 25
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under paragraphs (2) and (3) of section 1
1401(b)’’. 2
(3) T
ECHNICAL AMENDMENT .—Section 3
1401(b)(2)(B) of such Code is amended by striking 4
‘‘section 3121(b)(2)’’ and inserting ‘‘section 5
3101(b)(2)’’. 6
(c) E
FFECTIVEDATE.—The amendments made by 7
this section shall apply to net earnings from self-employ-8
ment derived, and taxable years beginning, on or after 9
January 1 of the first calendar year that begins after the 10
date of enactment of this Act. 11
SEC. 4. TAXES ON UNEARNED INCOME. 12
(a) M
ODIFICATIONS TOTAX ONNETINVESTMENT 13
I
NCOME.— 14
(1) I
N GENERAL.—Section 1411 of the Internal 15
Revenue Code of 1986 is amended by adding at the 16
end the following new subsection: 17
‘‘(f) A
DDITIONALAMOUNT FORCERTAINHIGHIN-18
COMEINDIVIDUALS.— 19
‘‘(1) I
NCLUSION OF SPECIFIED NET INCOME .— 20
‘‘(A) I
N GENERAL.—In the case of any in-21
dividual whose modified adjusted gross income 22
for the taxable year exceeds the high income 23
threshold amount, subsection (a)(1) shall be ap-24
plied by substituting ‘the greater of specified 25
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net income or net investment income’ for ‘net 1
investment income’ in subparagraph (A) there-2
of. 3
‘‘(B) P
HASE-IN OF INCREASE.—The in-4
crease in the tax imposed under subsection 5
(a)(1) by reason of the application of subpara-6
graph (A) (determined before application of 7
paragraph (2)) shall not exceed the amount 8
which bears the same ratio to the amount of 9
such increase (determined without regard to 10
this paragraph) as— 11
‘‘(i) the excess described in subpara-12
graph (A), bears to 13
‘‘(ii) $100,000 (
1
∕2such amount in the 14
case of a married taxpayer (as defined in 15
section 7703) filing a separate return). 16
‘‘(2) A
DDITIONAL RATE BRACKET .—In the case 17
of any individual whose modified adjusted gross in-18
come for the taxable year exceeds the high income 19
threshold amount, the amount of tax imposed under 20
subsection (a)(1) shall be increased by an amount 21
equal to 13.6 percent of the lesser of— 22
‘‘(A) the greater of the specified net in-23
come or net investment income for the taxable 24
year, or 25
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‘‘(B) the excess (if any) of— 1
‘‘(i) the modified adjusted gross in-2
come for such taxable year, over 3
‘‘(ii) the high income threshold 4
amount. 5
‘‘(3) D
EFINITIONS.— 6
‘‘(A) H
IGH INCOME THRESHOLD 7
AMOUNT.—For purposes of this subsection, the 8
term ‘high income threshold amount’ means— 9
‘‘(i) except as provided in clause (ii) 10
or (iii), $400,000, 11
‘‘(ii) in the case of a taxpayer making 12
a joint return under section 6013 or a sur-13
viving spouse (as defined in section 2(a)), 14
$500,000, and 15
‘‘(iii) in the case of a married tax-16
payer (as defined in section 7703) filing a 17
separate return,
1
∕2of the dollar amount 18
determined under clause (ii). 19
‘‘(B) S
PECIFIED NET INCOME .—For pur-20
poses of this section, the term ‘specified net in-21
come’ means net investment income deter-22
mined— 23
‘‘(i) without regard to the phrase 24
‘other than such income which is derived in 25
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the ordinary course of a trade or business 1
not described in paragraph (2),’ in sub-2
section (c)(1)(A)(i), 3
‘‘(ii) without regard to the phrase ‘de-4
scribed in paragraph (2)’ in subsection 5
(c)(1)(A)(ii), 6
‘‘(iii) without regard to the phrase 7
‘other than property held in a trade or 8
business not described in paragraph (2)’ in 9
subsection (c)(1)(A)(iii), 10
‘‘(iv) without regard to paragraphs 11
(2), (3), and (4) of subsection (c), and 12
‘‘(v) by treating paragraphs (5) and 13
(6) of section 469(c) (determined without 14
regard to the phrase ‘To the extent pro-15
vided in regulations,’ in such paragraph 16
(6)) as applying for purposes of subsection 17
(c) of this section.’’. 18
(b) A
PPLICATION TOTRUSTS ANDESTATES.—Sec-19
tion 1411(a)(2) of the Internal Revenue Code of 1986 is 20
amended— 21
(1) by striking ‘‘3.8 percent’’ and inserting 22
‘‘17.4 percent’’, and 23
(2) in subparagraph (A) thereof, by striking 24
‘‘undistributed net investment income’’ and inserting 25
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‘‘the greater of undistributed specified net income or 1
undistributed net investment income’’. 2
(c) C
LARIFICATIONSWITHRESPECT TO DETER-3
MINATION OFNETINVESTMENTINCOME.— 4
(1) C
ERTAIN EXCEPTIONS.—Section 1411(c)(6) 5
of the Internal Revenue Code of 1986 is amended to 6
read as follows: 7
‘‘(6) S
PECIAL RULES.—Net investment income 8
shall not include— 9
‘‘(A) any item taken into account in deter-10
mining self-employment income for such taxable 11
year on which a tax is imposed by section 12
1401(b), 13
‘‘(B) wages received with respect to em-14
ployment on which a tax is imposed under sec-15
tion 3101(b) (determined without regard to sec-16
tion 3101(c)) or 3201(a) (including amounts 17
taken into account under section 3121(v)(2)), 18
and 19
‘‘(C) wages received from the performance 20
of services earned outside the United States for 21
a foreign employer.’’. 22
(2) N
ET OPERATING LOSSES NOT TAKEN INTO 23
ACCOUNT.—Section 1411(c)(1)(B) of such Code is 24
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amended by inserting ‘‘(other than section 172)’’ 1
after ‘‘this subtitle’’. 2
(3) I
NCLUSION OF CERTAIN FOREIGN IN -3
COME.— 4
(A) I
N GENERAL.—Section 1411(c)(1)(A) 5
of such Code is amended by striking ‘‘and’’ at 6
the end of clause (ii), by striking ‘‘over’’ at the 7
end of clause (iii) and inserting ‘‘and’’, and by 8
adding at the end the following new clause: 9
‘‘(iv) any amount includible in gross 10
income under section 951, 951A, 1293, or 11
1296, over’’. 12
(B) P
ROPER TREATMENT OF CERTAIN 13
PREVIOUSLY TAXED EARNINGS AND PROFITS .— 14
Section 1411(c) of such Code is amended by 15
adding at the end the following new paragraph: 16
‘‘(7) C
ERTAIN EARNINGS AND PROFITS OF FOR -17
EIGN CORPORATIONS.— 18
‘‘(A) I
N GENERAL.—Except as otherwise 19
provided by the Secretary, a distribution of 20
earnings and profits that is not treated as a 21
dividend for purposes of chapter 1 by reason of 22
section 959(d) or section 1293(c) shall not be 23
treated as a dividend for purposes of this sec-24
tion. 25
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‘‘(B) REGULATIONS AND OTHER GUID -1
ANCE.—The Secretary shall issue regulations or 2
other guidance providing for the treatment of 3
distributions by a foreign corporation after De-4
cember 31, 2023, of earnings and profits of 5
such foreign corporation which accrued before 6
such date, but which have not been previously 7
subject to tax under this section.’’. 8
(d) T
RANSFERS OF REVENUES TO OLD-AGE AND 9
S
URVIVORS, DISABILITYINSURANCE, ANDFEDERALHOS-10
PITALINSURANCETRUSTFUNDS.— 11
(1) F
EDERAL OLD-AGE AND SURVIVORS TRUST 12
FUND.— 13
(A) I
N GENERAL.—Section 201(a) of the 14
Social Security Act (42 U.S.C. 401(a)) is 15
amended— 16
(i) by striking ‘‘100 per centum of’’, 17
(ii) by inserting ‘‘100 percent of’’ be-18
fore ‘‘the taxes’’ each place it appears in 19
paragraphs (1), (2), (3), and (4), and 20
(iii) by striking ‘‘and’’ at the end of 21
paragraph (3), by striking the period at 22
the end of paragraph (4) and inserting ‘‘; 23
and’’, and by inserting after paragraph (4) 24
the following new paragraph: 25
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‘‘(5) 71.3 percent of the taxes imposed by sec-1
tion 1411 of the Internal Revenue Code of 1986 for 2
any taxable year beginning after December 31, 3
2023, as determined by the Secretary of the Treas-4
ury or the Secretary’s delegate based on tax returns 5
under subtitle F of such Code, less the amounts 6
specified in paragraph (3) of subsection (b).’’. 7
(B) C
ONFORMING AMENDMENT .—The 8
fourth sentence of section 201(a) of such Act 9
(42 U.S.C. 401(a)) is amended by striking 10
‘‘clauses (3) and (4)’’ each place it appears and 11
inserting ‘‘paragraphs (3), (4), and (5)’’. 12
(2) F
EDERAL DISABILITY INSURANCE TRUST 13
FUND.—Section 201(b) of the Social Security Act 14
(42 U.S.C. 401(b)) is amended— 15
(A) by striking ‘‘100 per centum of’’, and 16
(B) by striking ‘‘and’’ at the end of para-17
graph (1), by striking the period at the end of 18
paragraph (2) and inserting ‘‘; and’’, and by in-19
serting after paragraph (2) the following new 20
paragraph: 21
‘‘(3) 10.3 percent of the taxes imposed by sec-22
tion 1411 of the Internal Revenue Code of 1986 for 23
any taxable year beginning after December 31, 24
2023, as determined by the Secretary of the Treas-25
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ury or the Secretary’s delegate based on tax returns 1
under subtitle F of such Code.’’. 2
(3) F
EDERAL HOSPITAL INSURANCE TRUST 3
FUND.—Section 1817(a) of the Social Security Act 4
(42 U.S.C. 1395i(a)) is amended— 5
(A) by striking ‘‘100 per centum of’’, 6
(B) by inserting ‘‘100 percent of’’ before 7
‘‘the taxes’’ each place it appears in paragraphs 8
(1) and (2), and 9
(C) by striking ‘‘and’’ at the end of para-10
graph (1), by striking the period at the end of 11
paragraph (2) and inserting ‘‘; and’’, and by in-12
serting after paragraph (2) the following new 13
paragraph: 14
‘‘(3) 28.7 percent of the taxes imposed by sec-15
tion 1411 of the Internal Revenue Code of 1986 for 16
any taxable year beginning after December 31, 17
2023, as determined by the Secretary of the Treas-18
ury or the Secretary’s delegate based on tax returns 19
under subtitle F of such Code.’’. 20
(e) E
FFECTIVEDATE.—The amendments made by 21
this section shall apply to taxable years beginning after 22
December 31, 2023. 23
Æ
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