H.R. 3271
119th CONGRESS 1st Session
To amend the Internal Revenue Code of 1986 to increase funding for Social Security and Medicare.
IN THE HOUSE OF REPRESENTATIVES · May 8, 2025 · Sponsor: Mr. Boyle of Pennsylvania · Committee: Committee on Ways and Means
Table of contents
SEC. 1. Short title
- This Act may be cited as the Medicare and Social Security Fair Share Act.
SEC. 2. Modification of payroll taxes
- (a) Wage base for taxes funding social security
- Wage base for taxes funding social security
- (1) In general
- Paragraph (1) of of the Internal Revenue Code of 1986 is amended to read as follows: section 3121(a)
- In general
- in the case of taxes imposed by sections 3101(a) and 3111(a), for any calendar year in which the contribution and benefit base (as determined under section 230 of the Social Security Act) is less than $400,000, so much of the remuneration (other than remuneration referred to in the succeeding paragraphs of this subsection) with respect to employment that has been paid to an individual by an employer during the calendar year as exceeds such contribution and benefit base but does not exceed $400,000;
- (2) Conforming amendments
- (A) Successor employers
- of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection: Section 3121
- (aa) Special rules for successor employers
- For purposes of subsection (a)(1), if an employer (hereinafter referred to as successor employer) during any calendar year acquires substantially all the property used in a trade or business of another employer (hereinafter referred to as a predecessor), or used in a separate unit of a trade or business of a predecessor, and immediately after the acquisition employs in his trade or business an individual who immediately prior to the acquisition was employed in the trade or business of such predecessor, then, for the purpose of determining the amount of remuneration paid by the successor employer under such subsection, any remuneration (other than remuneration referred to in the paragraphs succeeding paragraph (1) of subsection (a)) with respect to employment paid (or considered under this subsection as having been paid) to such individual by such predecessor during such calendar year and prior to such acquisition shall be considered as having been paid by such successor employer.
- (aa) Special rules for successor employers
- of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection: Section 3121
- (B) Application to railroad retirement taxes
- (i) For any calendar year in which the applicable base is less than $400,000, the term does not include so much of the remuneration paid during any calendar year to an individual by an employer for services rendered as an employee to such employer as exceeds the applicable base but does not exceed $400,000.
compensation - Clause (i) of section 3231(e)(2)(A) of such Code is amended to read as follows:
- (i) For any calendar year in which the applicable base is less than $400,000, the term does not include so much of the remuneration paid during any calendar year to an individual by an employer for services rendered as an employee to such employer as exceeds the applicable base but does not exceed $400,000.
- (A) Successor employers
- (b) Further additional hospital insurance tax on very high income taxpayers
- (1) In general
- of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: Section 3101(b)
- (3) Further additional tax
- In addition to the tax imposed by paragraphs (1) and (2) and the preceding subsection, there is hereby imposed on every taxpayer (other than a corporation, estate, or trust) a tax equal to 1.2 percent of wages which are received with respect to employment (as defined in section 3121(b)) during the taxable year which are in excess of—
- in the case of a joint return, $500,000,
- in the case of a married taxpayer (as defined in section 7703) filing a separate return, ½ of the dollar amount determined under subparagraph (A), and
- in any other case, $400,000.
- In addition to the tax imposed by paragraphs (1) and (2) and the preceding subsection, there is hereby imposed on every taxpayer (other than a corporation, estate, or trust) a tax equal to 1.2 percent of wages which are received with respect to employment (as defined in section 3121(b)) during the taxable year which are in excess of—
- (3) Further additional tax
- of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: Section 3101(b)
- (2) Collection of tax
- (g) Special rules for further additional tax
- (1) In general
- In the case of any tax imposed by section 3101(b)(3), subsection (a) shall only apply to the extent to which the taxpayer receives wages from the employer in excess of $400,000, and the employer may disregard the amount of wages received by such taxpayer’s spouse.
- In general
- (2) Collection of amounts not withheld
- To the extent that the amount of any tax imposed by section 3101(b)(3) is not collected by the employer, such tax shall be paid by the employee.
- (3) Tax paid by recipient
- If an employer, in violation of this chapter, fails to deduct and withhold the tax imposed by section 3101(b)(3) and thereafter the tax is paid by the employee, the tax so required to be deducted and withheld shall not be collected from the employer, but this paragraph shall in no case relieve the employer from liability for any penalties or additions to tax otherwise applicable in respect of such failure to deduct and withhold.
- (1) In general
- Section 3102 of such Code is amended by adding at the end the following new subsection:
- (g) Special rules for further additional tax
- (1) In general
- (c) Effective date
- The amendments made by this section shall apply to remuneration paid, and taxable years beginning, on or after January 1 of the first calendar year that begins after the date of enactment of this Act.
SEC. 3. Modification of taxes on self-employment income
- (a) Tax on net earnings from self-Employment up to contribution and benefit base and more than $400,000
- Paragraph (1) of of the Internal Revenue Code of 1986 is amended to read as follows: section 1402(b)
- in the case of the tax imposed by section 1401(a) for any taxable year beginning in a calendar year in which the contribution and benefit base (as determined under section 230 of the Social Security Act) is less than $400,000, the excess (if any) of—
- so much of the net earnings from self-employment which is in excess of—
- (i) an amount equal to the contribution and benefit base (as determined under section 230 of the Social Security Act) which is effective for the calendar year in which such taxable year begins, reduced (but not below zero) by
- (ii) the amount of the wages paid to such individual during such taxable year, over
- the sum of—
- (i) the excess (if any) of—
- the net earnings from self-employment reduced by the excess (if any) of subparagraph (A)(i) over subparagraph (A)(ii), over
- $400,000, reduced by such contribution and benefit base, plus
- (ii) the amount of the wages paid to such individual during such taxable year in excess of such contribution and benefit base and not in excess of $400,000; or
- so much of the net earnings from self-employment which is in excess of—
- in the case of the tax imposed by section 1401(a) for any taxable year beginning in a calendar year in which the contribution and benefit base (as determined under section 230 of the Social Security Act) is less than $400,000, the excess (if any) of—
- Paragraph (1) of of the Internal Revenue Code of 1986 is amended to read as follows: section 1402(b)
- (b) Further additional hospital insurance tax on very high income taxpayers
- (1) In general
- of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: Section 1401(b)
- (3) Further additional tax
- (A) In general
- In addition to the tax imposed by paragraphs (1) and (2) and the preceding subsection, there is hereby imposed on every taxpayer (other than a corporation, estate, or trust) for each taxable year a tax equal to 1.2 percent of the self-employment income for such taxable year which is in excess of—
- (i) in the case of a joint return, $500,000,
- (ii) in the case of a married taxpayer (as defined in section 7703) filing a separate return, ½ of the dollar amount determined under subparagraph (A), and
- (iii) in any other case, $400,000.
- In addition to the tax imposed by paragraphs (1) and (2) and the preceding subsection, there is hereby imposed on every taxpayer (other than a corporation, estate, or trust) for each taxable year a tax equal to 1.2 percent of the self-employment income for such taxable year which is in excess of—
- (B) Coordination with FICA
- The amounts under clause (i), (ii), or (iii) (whichever is applicable) of subparagraph (A) shall be reduced (but not below zero) by the amount of wages taken into account in determining the tax imposed under section 3101(b)(3) with respect to the taxpayer.
- (A) In general
- (3) Further additional tax
- of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: Section 1401(b)
- (2) No deduction for further additional tax
- (A) In general
- Section 164(f) of such Code is amended by striking
section 1401(b)(2)and insertingparagraphs (2) and (3) of section 1401(b). - In general
- Section 164(f) of such Code is amended by striking
- (B) Deduction for net earnings from self-employment
- Section 1402(a)(12)(B) of such Code is amended by striking
the rate imposed under paragraph (2) of section 1401(b)and insertingthe rates imposed under paragraphs (2) and (3) of section 1401(b).
- Section 1402(a)(12)(B) of such Code is amended by striking
- (A) In general
- (3) Technical amendment
- Section 1401(b)(2)(B) of such Code is amended by striking
section 3121(b)(2)and insertingsection 3101(b)(2).
- Section 1401(b)(2)(B) of such Code is amended by striking
- (1) In general
- (c) Effective date
- The amendments made by this section shall apply to net earnings from self-employment derived, and taxable years beginning, on or after January 1 of the first calendar year that begins after the date of enactment of this Act.
SEC. 4. Taxes on unearned income
- (a) Modifications to tax on net investment income
- Modifications to tax on net investment income
- (1) In general
- of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection: Section 1411
- (f) Additional amount for certain high income individuals
- (1) Inclusion of specified net income
- (A) In general
- In the case of any individual whose modified adjusted gross income for the taxable year exceeds the high income threshold amount, subsection (a)(1) shall be applied by substituting for in subparagraph (A) thereof.
the greater of specified net income ornet investment income``
- In the case of any individual whose modified adjusted gross income for the taxable year exceeds the high income threshold amount, subsection (a)(1) shall be applied by substituting for in subparagraph (A) thereof.
- (B) Phase-in of increase
- The increase in the tax imposed under subsection (a)(1) by reason of the application of subparagraph (A) (determined before application of paragraph (2)) shall not exceed the amount which bears the same ratio to the amount of such increase (determined without regard to this paragraph) as—
- (i) the excess described in subparagraph (A), bears to
- (ii) $100,000 ( such amount in the case of a married taxpayer (as defined in section 7703) filing a separate return).
- The increase in the tax imposed under subsection (a)(1) by reason of the application of subparagraph (A) (determined before application of paragraph (2)) shall not exceed the amount which bears the same ratio to the amount of such increase (determined without regard to this paragraph) as—
- (A) In general
- (2) Additional rate bracket
- In the case of any individual whose modified adjusted gross income for the taxable year exceeds the high income threshold amount, the amount of tax imposed under subsection (a)(1) shall be increased by an amount equal to 13.6 percent of the lesser of—
- the greater of the specified net income or net investment income for the taxable year, or
- the excess (if any) of—
- (i) the modified adjusted gross income for such taxable year, over
- (ii) the high income threshold amount.
- In the case of any individual whose modified adjusted gross income for the taxable year exceeds the high income threshold amount, the amount of tax imposed under subsection (a)(1) shall be increased by an amount equal to 13.6 percent of the lesser of—
- (3) Definitions
- (A) High income threshold amount
- For purposes of this subsection, the term means—
high income threshold amount- (i) except as provided in clause (ii) or (iii), $400,000,
- (ii) in the case of a taxpayer making a joint return under section 6013 or a surviving spouse (as defined in section 2(a)), $500,000, and
- (iii) in the case of a married taxpayer (as defined in section 7703) filing a separate return, of the dollar amount determined under clause (ii).
- For purposes of this subsection, the term means—
- (B) Specified net income
- For purposes of this section, the term
specified net incomemeans net investment income determined—- (i) without regard to the phrase in subsection (c)(1)(A)(i),
other than such income which is derived in the ordinary course of a trade or business not described in paragraph (2), - (ii) without regard to the phrase in subsection (c)(1)(A)(ii),
described in paragraph (2) - (iii) without regard to the phrase in subsection (c)(1)(A)(iii),
other than property held in a trade or business not described in paragraph (2) - (iv) without regard to paragraphs (2), (3), and (4) of subsection (c), and
- (v) by treating paragraphs (5) and (6) of section 469(c) (determined without regard to the phrase in such paragraph (6)) as applying for purposes of subsection (c) of this section.
To the extent provided in regulations,
- (i) without regard to the phrase in subsection (c)(1)(A)(i),
- For purposes of this section, the term
- (A) High income threshold amount
- (1) Inclusion of specified net income
- (f) Additional amount for certain high income individuals
- of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection: Section 1411
- (b) Application to trusts and estates
- of the Internal Revenue Code of 1986 is amended— Section 1411(a)(2)
- by striking
3.8 percentand inserting17.4 percent, and - in subparagraph (A) thereof, by striking
undistributed net investment incomeand insertingthe greater of undistributed specified net income or undistributed net investment income.
- by striking
- of the Internal Revenue Code of 1986 is amended— Section 1411(a)(2)
- (c) Clarifications with respect to determination of net investment income
- (1) Certain exceptions
- of the Internal Revenue Code of 1986 is amended to read as follows: Section 1411(c)(6)
- (6) Special rules
- Net investment income shall not include—
- any item taken into account in determining self-employment income for such taxable year on which a tax is imposed by section 1401(b),
- wages received with respect to employment on which a tax is imposed under section 3101(b) (determined without regard to section 3101(c)) or 3201(a) (including amounts taken into account under section 3121(v)(2)), and
- wages received from the performance of services earned outside the United States for a foreign employer.
- Net investment income shall not include—
- (6) Special rules
- of the Internal Revenue Code of 1986 is amended to read as follows: Section 1411(c)(6)
- (2) Net operating losses not taken into account
- Section 1411(c)(1)(B) of such Code is amended by inserting after .
- (3) Inclusion of certain foreign income
- (A) In general
- Section 1411(c)(1)(A) of such Code is amended by striking at the end of clause (ii), by striking at the end of clause (iii) and inserting
over, and by adding at the end the following new clause:- (iv) any amount includible in gross income under section 951, 951A, 1293, or 1296, over
- Section 1411(c)(1)(A) of such Code is amended by striking at the end of clause (ii), by striking at the end of clause (iii) and inserting
- (B) Proper treatment of certain previously taxed earnings and profits
- (7) Certain earnings and profits of foreign corporations
- (A) In general
- Except as otherwise provided by the Secretary, a distribution of earnings and profits that is not treated as a dividend for purposes of chapter 1 by reason of section 959(d) or section 1293(c) shall not be treated as a dividend for purposes of this section.
- (B) Regulations and other guidance
- The Secretary shall issue regulations or other guidance providing for the treatment of distributions by a foreign corporation after December 31, 2025, of earnings and profits of such foreign corporation which accrued before such date, but which have not been previously subject to tax under this section.
- (A) In general
- Section 1411(c) of such Code is amended by adding at the end the following new paragraph:
- (7) Certain earnings and profits of foreign corporations
- (A) In general
- (1) Certain exceptions
- (d) Transfers of revenues to Old-Age and Survivors, Disability Insurance, and Federal Hospital Insurance Trust Funds
- (1) Federal Old-Age and Survivors Trust Fund
- Federal Old-Age and Survivors Trust Fund
- (A) In general
- Section 201(a) of the Social Security Act () is amended— 42 U.S.C. 401(a)
- (i) by striking ,
- (ii) by inserting before each place it appears in paragraphs (1), (2), (3), and (4), and
- (iii) by striking at the end of paragraph (3), by striking the period at the end of paragraph (4) and inserting
; and, and by inserting after paragraph (4) the following new paragraph:- 71.3 percent of the taxes imposed by of the Internal Revenue Code of 1986 for any taxable year beginning after December 31, 2025, as determined by the Secretary of the Treasury or the Secretary's delegate based on tax returns under subtitle F of such Code, less the amounts specified in paragraph (3) of subsection (b). section 1411
- Section 201(a) of the Social Security Act () is amended— 42 U.S.C. 401(a)
- (B) Conforming amendment
- The fourth sentence of section 201(a) of such Act () is amended by striking each place it appears and inserting
paragraphs (3), (4), and (5). 42 U.S.C. 401(a)
- The fourth sentence of section 201(a) of such Act () is amended by striking each place it appears and inserting
- (2) Federal Disability Insurance Trust Fund
- Section 201(b) of the Social Security Act () is amended— 42 U.S.C. 401(b)
- by striking , and
- by striking at the end of paragraph (1), by striking the period at the end of paragraph (2) and inserting
; and, and by inserting after paragraph (2) the following new paragraph:- 10.3 percent of the taxes imposed by of the Internal Revenue Code of 1986 for any taxable year beginning after December 31, 2025, as determined by the Secretary of the Treasury or the Secretary's delegate based on tax returns under subtitle F of such Code. section 1411
- Section 201(b) of the Social Security Act () is amended— 42 U.S.C. 401(b)
- (3) Federal Hospital Insurance Trust Fund
- Section 1817(a) of the Social Security Act () is amended— 42 U.S.C. 1395i(a)
- Federal Hospital Insurance Trust Fund
- by striking ,
- by inserting before each place it appears in paragraphs (1) and (2), and
- by striking at the end of paragraph (1), by striking the period at the end of paragraph (2) and inserting
; and, and by inserting after paragraph (2) the following new paragraph:- 28.7 percent of the taxes imposed by of the Internal Revenue Code of 1986 for any taxable year beginning after December 31, 2025, as determined by the Secretary of the Treasury or the Secretary's delegate based on tax returns under subtitle F of such Code. section 1411
- (1) Federal Old-Age and Survivors Trust Fund
- (e) Effective date
- The amendments made by this section shall apply to taxable years beginning after December 31, 2025.