Richard S. and Benice F. Roberts - Page 5

                                        - 5 -                                         
               of benefits in excess of a certain base amount), the                   
               Committee’s bill assures that lower-income individuals,                
               many of whom rely upon their benefits to afford basic                  
               necessities, will not be taxed on their benefits.  The                 
               maximum proportion of benefits taxed is one-half in                    
               recognition of the fact that social security benefits                  
               are partially financed by after-tax employee                           
               contributions.  The bill’s method for taxing benefits                  
               assures that only those taxpayers who have substantial                 
               taxable income from other sources will be taxed on a                   
               portion of the benefits they receive. [S. Rept. 98-23,                 
               supra at 26, 1983-2 C.B. at 328.]                                      
               Subsequently the relevant committee report in connection               
          with the amendment to section 86 in OBRA section 13215(b)                   
          further explains the congressional purpose:                                 
                    The committee desires to more closely conform the                 
               income tax treatment of Social Security benefits and private           
               pension benefits by increasing the maximum amount of Social            
               Security benefits included in gross income for certain                 
               higher-income beneficiaries.  Reducing the exclusion for               
               Social Security benefits for these beneficiaries will                  
               enhance both the horizontal and vertical equity of the                 
               individual income tax system by treating all income in a               
               more similar manner.  To limit the effect of this provision            
               to taxpayers with a greater ability to pay taxes, the                  
               present-law income thresholds are maintained. * * * [H.                
               Rept. 103-111, at 654 (1993), 1993-3 C.B. 167, 230.]                   
               We recognize that “‘No scheme of taxation, whether the tax             
          is imposed on property, income, or purchases of goods and                   
          services, has yet been devised which is free of all                         
          discriminatory impact.’”  Druker v. Commissioner, 77 T.C. 867,              
          872 (1981) (quoting San Antonio Indep. Sch. Dist. v. Rodriguez,             
          411 U.S. 1, 41 (1973)), affd. in part on this issue and revd. in            
          part on another issue 697 F.2d 46 (2d Cir. 1982).                           
               Petitioner’s argument stems from the fact that he continued            
          to work after qualifying for Social Security benefits, earned a             

Page:  Previous  1  2  3  4  5  6  Next

Last modified: May 25, 2011