Pay-As-You-Go Social Security and Prosperity Insurance Act

Pay-As-You-Go Social Security and Prosperity Insurance Act - Revises the old-age, survivors, and disability insurance program, under the Social Security Act to permit the retirement of all persons in the United States at the age of 60 years with benefits sufficient, in the absence of any other resources, to assure elderly persons freedom from poverty and to assure elderly persons full participation in prevailing national standards of living. Provides Social Security benefits for physically, mentally, or vocationally disabled persons aged 18 and over. Provides benefits for eligible full-time students aged 18 to 25. Provides benefits for eligible female heads of families and for certain children.

Creates within the Treasury an account to be known as the "pay-as-you-go, social security and prosperity insurance account" and authorizes the appropriation to it of revenues derived under this Act. Sets forth a schedule for reduction of benefits on the basis of earnings of income received by beneficiaries. Provides that payments to recipients shall be made on a monthly basis.

Provides that, in addition to all other excises, duties, and taxes, there shall be levied a tax on the gross income of all persons and companies, except that all personal gross income up to $500 per month shall be exempt. Provides that all personal gross income of more than $500 per month and the total monthly gross income of all companies shall be taxed at the rate of 1 percent for the first 6 months after the adoption of this Act. Increases such tax rate to two and one-half percent after 22 months. Exempts certain organizations from taxation.

Authorizes the Secretary of the Treasury to prepare and make available United States social security bonds in varying denominations. States that such bonds may be purchased by anyone in his own behalf or in the behalf of any other person and may be redeemed only by such persons upon becoming qualified for benefits under the provisions of this Act.