[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 942 Introduced in House (IH)]
107th CONGRESS
1st Session
H. R. 942
To amend the Internal Revenue Code of 1986 to reduce individual income
tax rates and increase the standard deduction.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 8, 2001
Mr. Collins introduced the following bill; which was referred to the
Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to reduce individual income
tax rates and increase the standard deduction.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
(a) Short Title.--This Act may be cited as the ``Individual Income
Tax Rate Reduction Act of 2001''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is expressed in
terms of an amendment to, or repeal of, a section or other provision,
the reference shall be considered to be made to a section or other
provision of the Internal Revenue Code of 1986.
(c) 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
such Code.
SEC. 2. REDUCTION IN INDIVIDUAL INCOME TAX RATES.
(a) Rates for 2001.--Section 1 (relating to tax imposed) is amended
by striking subsections (a) through (e) and inserting the following:
``(a) Married Individuals Filing Joint Returns and Surviving
Spouses.--There is hereby imposed on the taxable income of every
married individual (as defined in section 7703) who makes a single
return jointly with his spouse under section 6013, and every surviving
spouse (as defined in section 2(a)), a tax determined in accordance
with the following table:
``If taxable income is: The tax is:
Not over $45,200...............
12% of taxable income.
Over $45,200 but not over
$109,250.
$5,424, plus 25% of the excess
over $45,200
Over $109,250 but not over
$166,500.
$21,436.50, plus 28% of the
excess over $109,250
Over $166,500 but not over
$297,350.
$37,466.50, plus 35.5% of the
excess over $166,500
Over $297,350..................
$83,918.25, plus 38.2% of the
excess over $297,350
``(b) Heads of Households.--There is hereby imposed on the taxable
income of every head of a household (as defined in section 2(b)) a tax
determined in accordance with the following table:
``If taxable income is: The tax is:
Not over $36,250...............
12% of taxable income.
Over $36,250 but not over
$93,650.
$4,350, plus 25% of the excess
over $36,250
Over $93,650 but not over
$151,650.
$18,700, plus 28% of the excess
over $93,650
Over $151,650 but not over
$297,350.
$34,940, plus 35.5% of the
excess over $151,650
Over $297,350..................
$86,663.50, plus 38.2% of the
excess over $297,350
``(c) Unmarried Individuals (Other Than Surviving Spouses and Heads
of Households).--There is hereby imposed on the taxable income of every
individual (other than a surviving spouse as defined in section 2(a) or
the head of a household as defined in section 2(b)) who is not a
married individual (as defined in section 7703) a tax determined in
accordance with the following table:
``If taxable income is: The tax is:
Not over $27,050...............
12% of taxable income.
Over $27,050 but not over
$65,550.
$3,246, plus 25% of the excess
over $27,050
Over $65,550 but not over
$136,750.
$12,871, plus 28% of the excess
over $65,550
Over $136,750 but not over
$297,350.
$32,807, plus 35.5% of the
excess over $136,750
Over $297,350..................
$89,820, plus 38.2% of the
excess over $297,350
``(d) Married Individuals Filing Separate Returns.--There is hereby
imposed on the taxable income of every married individual (as defined
in section 7703) who does not make a single return jointly with his
spouse under section 6013, a tax determined in accordance with the
following table:
``If taxable income is: The tax is:
Not over $22,600...............
12% of taxable income.
Over $22,600 but not over
$54,625.
$2,712, plus 25% of the excess
over $22,600
Over $54,625 but not over
$83,250.
$10,718.25, plus 28% of the
excess over $54,625
Over $83,250 but not over
$148,675.
$18,733.25, plus 35.5% of the
excess over $83,250
Over $148,675..................
$41,959.12, plus 38.2% of the
excess over $148,675
``(e) Estates and Trusts.--There is hereby imposed on the taxable
income of every estate, and every trust, taxable under this subsection
a tax determined in accordance with the following table:
``If taxable income is: The tax is:
Not over $1,800................
12% of taxable income.
Over $1,800 but not over $4,250
$216, plus 25% of the excess
over $1,800
Over $4,250 but not over $6,500
$828.50, plus 28% of the excess
over $4,250
Over $6,500 but not over $8,900
$1,458.50, plus 35.5% of the
excess over $6,500
Over $8,900....................
$2,310.50, plus 38.2% of the
excess over $8,900''
(b) Rate Reductions After 2001.--Section 1 is amended by adding at
the end the following new subsection:
``(i) Rate Reductions After 2001.--
``(1) In general.--In the case of taxable years beginning
in a calendar year after 2001, the corresponding percentage
specified for such calendar year in the following table shall
be substituted for the otherwise applicable tax rate.
------------------------------------------------------------------------
The corresponding
percentages shall be
In the case of taxable years beginning during substituted for the
calendar year: following percentages:
-------------------------
35.5% 38.2%
------------------------------------------------------------------------
2002.......................................... 35.0% 37.0%
2003.......................................... 34.5% 35.8%
2004.......................................... 34.0% 34.6%
2005.......................................... 33.5% 33.5%
2006 and thereafter........................... 33.0% 33.0%
------------------------------------------------------------------------
``(2) Adjustment of tables.--The Secretary shall adjust the
tables prescribed under subsection (f) to carry out the
reductions under this subsection.''
(c) Inflation Adjustment To Apply After 2001.--Subsection (f) of
section 1 is amended--
(1) by striking ``1993'' in paragraph (1) and inserting
``2001'', and
(2) by striking ``1992'' in paragraph (3)(B) and inserting
``2000''.
(d) Conforming Amendments.--
(1) The following provisions are each amended by striking
``1992'' and inserting ``2000'' each place it appears:
(A) Section 32(j)(1)(B).
(B) Section 41(e)(5)(C).
(C) Section 42(h)(3)(H)(i)(II).
(D) Section 59(j)(2)(B).
(E) Section 63(c)(4)(B).
(F) Section 68(b)(2)(B).
(G) Section 132(f)(6)(A)(ii).
(H) Section 135(b)(2)(B)(ii).
(I) Section 146(d)(2)(B).
(J) Section 151(d)(4).
(K) Section 220(g)(2).
(L) Section 221(g)(1)(B).
(M) Section 512(d)(2)(B).
(N) Section 513(h)(2)(C)(ii).
(O) Section 685(c)(3)(B).
(P) Section 877(a)(2).
(Q) Section 911(b)(2)(D)(ii)(II).
(R) Section 2032A(a)(3)(B).
(S) Section 2503(b)(2)(B).
(T) Section 2631(c)(2).
(U) Section 4001(e)(1)(B).
(V) Section 4261(e)(4)(A)(ii).
(W) Section 6039F(d).
(X) Section 6323(i)(4)(B).
(Y) Section 6334(g)(1)(B).
(Z) Section 6601(j)(3)(B).
(AA) Section 7430(c)(1).
(2) Sections 25A(h)(1)(A)(ii) and 25A(h)(2)(A)(ii) are each
amended by striking ``begins,'' and all that follows through
``thereof''.
(3) Subclause (II) of section 42(h)(6)(G)(i) is amended by
striking ``1987'' and inserting ``2000''.
(e) Additional Conforming Amendments.--
(1) Subparagraph (B) of section 1(g)(7) is amended--
(A) by striking ``15 percent'' in clause (ii)(II)
and inserting ``the first bracket percentage'', and
(B) by adding at the end the following flush
sentence:
``For purposes of clause (ii), the first bracket
percentage is the percentage applicable to the lowest
income bracket in the table under subsection (c).''
(2) Section 1(h) is amended--
(A) by striking ``28 percent'' both places it
appears in paragraphs (1)(A)(ii)(I) and (1)(B)(i) and
inserting ``25 percent'', and
(B) by striking paragraph (13).
(3) Section 15 is amended by adding at the end the
following new subsection:
``(f) Rate Reductions Enacted by Individual Income Tax Rate
Reduction Act of 2001.--This section shall not apply to any change in
rates under subsection (i) of section 1 (relating to rate reductions
after 2000).''
(4) Section 531 is amended by striking ``equal to'' and all
that follows and inserting ``equal to the product of the
highest rate of tax under section 1(c) and the accumulated
taxable income.''.
(5) Section 541 of such Code is amended by striking ``equal
to'' and all that follows and inserting ``equal to the product
of the highest rate of tax under section 1(c) and the
undistributed personal holding company income.''.
(6) Section 3402(p)(1)(B) is amended by striking ``7, 15,
28, or 31 percent'' and inserting ``7 percent, any percentage
applicable to any of the 3 lowest income brackets in the table
under section 1(c),''.
(7) Section 3402(p)(2) is amended by striking ``equal to 15
percent of such payment'' and inserting ``equal to the product
of the lowest rate of tax under section 1(c) and such
payment''.
(8) Section 3402(q)(1) is amended by striking ``equal to 28
percent of such payment'' and inserting ``equal to the product
of the third to the lowest rate of tax under section 1(c) and such
payment''.
(9) Section 3402(r)(3) is amended by striking ``31
percent'' and inserting ``the third to the lowest rate of tax
under section 1(c)''.
(10) Section 3406(a)(1) is amended by striking ``equal to
31 percent of such payment'' and inserting ``equal to the
product of the third to the lowest rate of tax under section
1(c) and such payment''.
(11) Section 13273 of the Revenue Reconciliation Act of
1993 is amended by striking ``28 percent'' and inserting ``the
third to the lowest rate of tax under section 1(c) of the
Internal Revenue Code of 1986''.
(f) Effective Dates.--
(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) Amendments to withholding provisions.--The amendments
made by paragraphs (6), (7), (8), (9), (10), and (11) of
subsection (e) shall apply to amounts paid after the date of
the enactment of this Act.
SEC. 3. INCREASE IN STANDARD DEDUCTION.
(a) In General.--Paragraph (2) of section 63(c) (relating to
standard deduction) is amended to read as follows:
``(2) Basic standard deduction.--For purposes of paragraph
(1), the basic standard deduction is--
``(A) twice the dollar amount in effect under
subparagraph (C) for the taxable year in the case of--
``(i) a joint return, or
``(ii) a surviving spouse (as defined in
section 2(a)),
``(B) $8,500 in the case of a head of household (as
defined in section 2(b)), or
``(C) $6,000 in any other case.''
(c) Technical Amendments.--
(1) Paragraph (4) of section 63(c) is amended to read as
follows:
``(4) Adjustments for inflation.--
``(A) In general.--In the case of any taxable year
beginning in a calendar year after 1988, each dollar
amount contained in paragraph (2) or (5) or subsection
(f) shall be increased by an amount equal to--
``(i) such dollar amount, multiplied by
``(ii) the cost-of-living adjustment
determined under section 1(f)(3) for the
calendar year in which the taxable year begins.
The preceding sentence shall not apply to the amount
referred to in paragraph (2)(A).
``(B) Base period adjustments.--In determining the
adjustment under subparagraph (A), section 1(f)(3)
shall be applied by substituting for `calendar year
1992' in subparagraph (B) thereof--
``(i) `calendar year 1987' in the case of
the dollar amount contained in paragraph (5)(A)
or subsection (f),
``(ii) `calendar year 1997' in the case of
the dollar amount contained in paragraph
(5)(B)'', and
``(iii) `calendar year 2000' in the case of
the dollar amounts contained in paragraph
(2).''
(2) Subparagraph (B) of section 1(f)(6) is amended by
striking ``subsection (c)(4) of section 63 (as it applies to
subsections (c)(5)(A) and (f) of such section)'' and inserting
``section 63(c)(4)''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2000.
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