(a)

Tier 1 tax

In addition to other taxes, there is hereby imposed on the income of each employee a tax equal to the applicable percentage of the compensation received during any calendar year by such employee for services rendered by such employee. For purposes of the preceding sentence, the term "applicable percentage" means the percentage equal to the sum of the rates of tax in effect under subsections (a) and (b) of section 3101 for the calendar year.

(b)

Tier 2 tax

(1)

In general

In addition to other taxes, there is hereby imposed on the income of each employee a tax equal to the applicable percentage of the compensation received during any calendar year by such employee for services rendered by such employee.

(2)

Applicable percentage

For purposes of paragraph (1), the term "applicable percentage" means -

(A)

4.90 percent in the case of compensation received during 2002 or 2003, and

(B)

in the case of compensation received during any calendar year after 2003, the percentage determined under section 3241 for such calendar year.

(c)

Cross reference

For application of different contribution bases with respect to the taxes imposed by subsections (a) and (b), see section 3231(e)(2).