[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6 Placed on Calendar Senate (PCS)]
Calendar No. 68
107th CONGRESS
1st Session
H. R. 6
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
March 29, 2001
Received
June 6, 2001
Read the first time
June 7, 2001
Read the second time and placed on the calendar
_______________________________________________________________________
AN ACT
To amend the Internal Revenue Code of 1986 to reduce the marriage
penalty by providing for adjustments to the standard deduction, the 15-
percent rate bracket, and the earned income credit, to increase the
child credit, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE, ETC.
(a) Short Title.--This Act may be cited as the ``Marriage Penalty
and Family Tax Relief Act of 2001''.
(b) Section 15 Not To Apply.--No amendment made by this Act shall
be treated as a change in a rate of tax for purposes of section 15 of
the Internal Revenue Code of 1986.
SEC. 2. ELIMINATION OF MARRIAGE PENALTY IN STANDARD DEDUCTION.
(a) In General.--Paragraph (2) of section 63(c) of the Internal
Revenue Code of 1986 (relating to standard deduction) is amended--
(1) by striking ``$5,000'' in subparagraph (A) and
inserting ``200 percent of the dollar amount in effect under
subparagraph (C) for the taxable year'';
(2) by adding ``or'' at the end of subparagraph (B);
(3) by striking ``in the case of'' and all that follows in
subparagraph (C) and inserting ``in any other case.''; and
(4) by striking subparagraph (D).
(b) Technical Amendments.--
(1) Subparagraph (B) of section 1(f)(6) of such Code is
amended by striking ``(other than with'' and all that follows
through ``shall be applied'' and inserting ``(other than with
respect to sections 63(c)(4) and 151(d)(4)(A)) shall be
applied''.
(2) Paragraph (4) of section 63(c) of such Code is amended
by adding at the end the following flush sentence:
``The preceding sentence shall not apply to the amount referred
to in paragraph (2)(A).''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2001.
SEC. 3. PHASEOUT OF MARRIAGE PENALTY IN 15-PERCENT BRACKET.
(a) In General.--Subsection (f) of section 1 of the Internal
Revenue Code of 1986 (relating to adjustments in tax tables so that
inflation will not result in tax increases) is amended by adding at the
end the following new paragraph:
``(8) Phaseout of marriage penalty in 15-percent bracket.--
``(A) In general.--With respect to taxable years
beginning after December 31, 2003, in prescribing the
tables under paragraph (1)--
``(i) the maximum taxable income in the
lowest rate bracket in the table contained in
subsection (a) (and the minimum taxable income
in the next higher taxable income bracket in
such table) shall be the applicable percentage
of the maximum taxable income in the lowest
rate bracket in the table contained in
subsection (c) (after any other adjustment
under this subsection), and
``(ii) the comparable taxable income
amounts in the table contained in subsection
(d) shall be \1/2\ of the amounts determined
under clause (i).
``(B) Applicable percentage.--For purposes of
subparagraph (A), the applicable percentage shall be
determined in accordance with the following table:
``For taxable years beginning
The applicable
in calendar year--
percentage is--
2004................................... 172
2005................................... 178
2006................................... 183
2007................................... 189
2008................................... 195
2009 and thereafter.................... 200.
``(C) Rounding.--If any amount determined under
subparagraph (A)(i) is not a multiple of $50, such
amount shall be rounded to the next lowest multiple of
$50.''.
(b) Repeal of Reduction of Refundable Tax Credits.--
(1) Subsection (d) of section 24 of such Code is amended by
striking paragraph (2) and redesignating paragraph (3) as
paragraph (2).
(2) Section 32 of such Code is amended by striking
subsection (h).
(c) Increase in Alternative Minimum Tax Exemption Amount for Joint
Returns.--
(1) In general.--Subsection (d) of section 55 of such Code
is amended by adding at the end the following new paragraph:
``(4) Adjustment of exemption amount for joint returns.--
``(A) In general.--The dollar amount applicable
under paragraph (1)(A) for 2008 and each even-numbered
calendar year thereafter--
``(i) shall be $500 greater than the dollar
amount applicable under paragraph (1)(A) for
the prior even-numbered calendar year, and
``(ii) shall apply to taxable years
beginning in such even-numbered calendar year
and in the succeeding calendar year.
In no event shall the dollar amount applicable under
paragraph (1)(A) exceed twice the dollar amount
applicable under paragraph (1)(B).
``(B) Exemption amounts for 2005, 2006, and 2007.--
The dollar amount applicable under paragraph (1)(A)
shall be--
``(i) $46,000 for taxable years beginning
in 2005, and
``(ii) $46,500 for taxable years beginning
in 2006 or 2007.''.
(2) Conforming amendments.--
(A) Paragraph (1) of section 55(d) of such Code is
amended by striking ``and'' at the end of subparagraph
(B), by striking subparagraph (C), and by inserting
after subparagraph (B) the following new subparagraphs:
``(C) 50 percent of the dollar amount applicable
under paragraph (1)(A) in the case of a married
individual who files a separate return, and
``(D) $22,500 in the case of an estate or trust.''.
(B) Subparagraph (C) of section 55(d)(3) of such
Code is amended by striking ``paragraph (1)(C)'' and
inserting ``subparagraph (C) or (D) of paragraph (1)''.
(C) The last sentence of section 55(d)(3) of such
Code is amended--
(i) by striking ``paragraph (1)(C)(i)'' and
inserting ``paragraph (1)(C)''; and
(ii) by striking ``$165,000 or (ii)
$22,500'' and inserting ``the minimum amount of
such income (as so determined) for which the
exemption amount under paragraph (1)(C) is
zero, or (ii) such exemption amount (determined
without regard to this paragraph)''.
(d) Technical Amendments.--
(1) Subparagraph (A) of section 1(f)(2) of such Code is
amended by inserting ``except as provided in paragraph (8),''
before ``by increasing''.
(2) The heading for subsection (f) of section 1 of such
Code is amended by inserting ``Phaseout of Marriage Penalty in
15-Percent Bracket;'' before ``Adjustments''.
(e) Effective Dates.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply to
taxable years beginning after December 31, 2003.
(2) Subsection (b).--The amendments made by subsection (b)
shall apply to taxable years beginning after December 31, 2001.
(3) Subsection (c).--The amendments made by subsection (c)
shall apply to taxable years beginning after December 31, 2004.
SEC. 4. MARRIAGE PENALTY RELIEF FOR EARNED INCOME CREDIT; EARNED INCOME
TO INCLUDE ONLY AMOUNTS INCLUDIBLE IN GROSS INCOME.
(a) In General.--Paragraph (2) of section 32(b) of the Internal
Revenue Code of 1986 (relating to percentages and amounts) is amended--
(1) by striking ``Amounts.--The earned'' and inserting
``Amounts.--
``(A) In general.--Subject to subparagraph (B), the
earned''; and
(2) by adding at the end the following new subparagraph:
``(B) Joint returns.--In the case of a joint
return, the earned income amount determined under
subparagraph (A) shall be 110 percent of the otherwise
applicable amount. If any amount determined under the
preceding sentence is not a multiple of $10, such
amount shall be rounded to the nearest multiple of
$10.''.
(b) Earned Income To Include Only Amounts Includible in Gross
Income.--Clause (i) of section 32(c)(2)(A) of such Code (defining
earned income) is amended by inserting ``, but only if such amounts are
includible in gross income for the taxable year'' after ``other
employee compensation''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2001.
SEC. 5. MODIFICATIONS TO CHILD TAX CREDIT.
(a) Increase in Per Child Amount.--Subsection (a) of section 24 of
the Internal Revenue Code of 1986 (relating to child tax credit) is
amended to read as follows:
``(a) Allowance of Credit.--
``(1) In general.--There shall be allowed as a credit
against the tax imposed by this chapter for the taxable year
with respect to each qualifying child of the taxpayer an amount
equal to the per child amount.
``(2) Per child amount.--For purposes of paragraph (1), the
per child amount shall be determined as follows:
``In the case of any taxable year The per child amount is--
beginning in--
2001 and 2002................................. $ 600
2003.......................................... 700
2004.......................................... 800
2005.......................................... 900
2006 or thereafter............................ 1,000.''.
(b) Credit Allowed Against Alternative Minimum Tax.--
(1) In general.--Subsection (b) of section 24 of such Code
is amended by adding at the end the following new paragraph:
``(3) Limitation based on amount of tax.--The credit
allowed under subsection (a) for any taxable year shall not
exceed the excess of--
``(A) the sum of the regular tax liability (as
defined in section 26(b)) plus the tax imposed by
section 55, over
``(B) the sum of the credits allowable under this
subpart (other than this section) and section 27 for
the taxable year.''.
(2) Conforming amendments.--
(A) The heading for section 24(b) of such Code is
amended to read as follows: ``Limitations.--''.
(B) The heading for section 24(b)(1) of such Code
is amended to read as follows: ``Limitation based on
adjusted gross income.--''.
(C) Section 24(d) of such Code is amended--
(i) by striking ``section 26(a)'' each
place it appears and inserting ``subsection
(b)(3)'', and
(ii) in paragraph (1)(B) by striking
``aggregate amount of credits allowed by this
subpart'' and inserting ``amount of credit
allowed by this section''.
(D) Paragraph (1) of section 26(a) of such Code is
amended by inserting ``(other than section 24)'' after
``this subpart''.
(E) Subsection (c) of section 23 of such Code is
amended by striking ``and section 1400C'' and inserting
``and sections 24 and 1400C''.
(F) Subparagraph (C) of section 25(e)(1) of such
Code is amended by inserting ``, 24,'' after ``sections
23''.
(G) Section 904(h) of such Code is amended by
inserting ``(other than section 24)'' after
``chapter''.
(H) Subsection (d) of section 1400C of such Code is
amended by inserting ``and section 24'' after ``this
section''.
(c) Additional Credit for Families With 3 or More Children
Available to All Families.--Subsection (d) of section 24 of such Code
is amended--
(1) in paragraph (1) by striking ``In the case of a
taxpayer with three or more qualifying children for any taxable
year, the'' and inserting ``The'', and
(2) in the subsection heading by striking ``With 3 or More
Children'' and inserting ``Paying Social Security Taxes''.
(d) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to taxable years
beginning after December 31, 2000.
(2) Subsection (b).--The amendments made by subsection (b)
shall apply to taxable years beginning after December 31, 2001.
SEC. 6. PROTECTION OF SOCIAL SECURITY AND MEDICARE.
The amounts transferred to any trust fund under the Social Security
Act shall be determined as if this Act had not been enacted.
Passed the House of Representatives March 29, 2001.
Attest:
JEFF TRANDAHL,
Clerk.
Calendar No. 68
107th CONGRESS
1st Session
H. R. 6
_______________________________________________________________________
AN ACT
To amend the Internal Revenue Code of 1986 to reduce the marriage
penalty by providing for adjustments to the standard deduction, the 15-
percent rate bracket, and the earned income credit, to increase the
child credit, and for other purposes.
_______________________________________________________________________
June 7, 2001
Read the second time and placed on the calendar