Rep. Jim Hansen, R-Utah, is co-sponsoring legislation to eliminate earnings caps for senior citizens receiving Social Security payments.

"We allow wealthier seniors to supplement their Social Security with income earned from interest and dividends. How can we justify penalizing those who work to supplement their Social Security?" Hansen said.Under current regulations, people older than 65 who make more than $9,270 a year must forfeit $1 in Social Security benefits for every $3 they earn over that limit.

Hansen said a senior citizen making $10,000 annually, for example under the system, would face an effective marginal tax rate of 56 percent - nearly twice that of millionaires.

Hansen said that amounts to age discrimination, and the system is a Depression-era relic that was designed to discourage older people from remaining in the work force. The bill he is co-sponsoring, which was introduced by Rep. Dennis Hastert, R-Ill., would eliminate that earnings cap.