[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 9873 Introduced in House (IH)]
<DOC>
118th CONGRESS
2d Session
H. R. 9873
To amend the Fair Labor Standards Act of 1938 and the Internal Revenue
Code of 1986 to make certain modifications in relation to the minimum
wage.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
September 27, 2024
Ms. Lee of Pennsylvania (for herself, Ms. Lee of California, Mr.
Jackson of Illinois, Ms. Tlaib, Ms. Bush, Ms. Schakowsky, Ms. McCollum,
Mrs. Ramirez, and Mr. Huffman) introduced the following bill; which was
referred to the Committee on Education and the Workforce, and in
addition to the Committees on Ways and Means, and Oversight and
Accountability, for a period to be subsequently determined by the
Speaker, in each case for consideration of such provisions as fall
within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To amend the Fair Labor Standards Act of 1938 and the Internal Revenue
Code of 1986 to make certain modifications in relation to the minimum
wage.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``American Stability
Act''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--MINIMUM WAGE
Sec. 101. Minimum wage increases.
Sec. 102. Tipped employees.
Sec. 103. Scheduled repeal of separate minimum wage for newly hired
employees who are less than 20 years old.
Sec. 104. Publication of notice.
Sec. 105. Promoting economic self-sufficiency for individuals with
disabilities.
TITLE II--INCOME TAX MODIFICATIONS
Sec. 201. Modification of income tax brackets based on annualized
stability wage.
Sec. 202. Surcharge on high income individuals, estates, and trusts.
Sec. 203. Alternative maximum tax for low-income individuals.
TITLE III--EARNED INCOME DISALLOWANCE
Sec. 301. Earned income disallowance.
TITLE IV--EFFECTIVE DATE
Sec. 401. Effective date.
TITLE I--MINIMUM WAGE
SEC. 101. MINIMUM WAGE INCREASES.
(a) In General.--Section 6(a)(1) of the Fair Labor Standards Act of
1938 (29 U.S.C. 206(a)(1)) is amended to read as follows:
``(1) except as otherwise provided in this section, not
less than--
``(A) $15.00 an hour for the first calendar year
beginning after the date of enactment of the American
Stability Act;
``(B) for each calendar year during the interval
period (as defined in subsection (g)), a minimum wage
equal to the amount determined under this paragraph for
the preceding year, increased by the lesser of--
``(i) 10 percent; or
``(ii) the amount necessary for the minimum
wage to equal the stability wage for such
calendar year; and
``(C) for each calendar year that begins after the
interval period, the stability wage for such calendar
year.''.
(b) Stability Wage.--Section 6 of such Act (29 U.S.C. 206) is
further amended by adding at the end the following:
``(h) Stability Wage.--
``(1) In general.--
``(A) Determination.--The stability wage determined
under this paragraph for a calendar year shall be an
amount equal to the greater of--
``(i) the average hourly earnings wage
determined under paragraph (2) for that
calendar year;
``(ii) the cost-of-living wage determined
under paragraph (3) for that calendar year; or
``(iii) the stability wage in effect for
the preceding year.
``(B) Rounding.--If the amount determined under
subparagraph (A) is not a multiple of 5 cents, such
amount shall be rounded to the next higher multiple of
5 cents.
``(2) Average hourly earnings wage.--The average hourly
earnings wage for any calendar year shall be an amount equal to
$20.00, multiplied by the ratio of--
``(A) the average hourly earnings for the year
preceding such calendar year, to
``(B) the average hourly earnings for the year
preceding the calendar year of the date of enactment of
the American Stability Act.
``(3) Cost-of-living wage.--The cost-of-living wage for any
calendar year shall be an amount equal to $20.00, multiplied by
the ratio of--
``(A) the CPI-U for the year preceding such
calendar year, to
``(B) the CPI-U for the year preceding the calendar
year of the date of enactment of the American Stability
Act.
``(4) Definitions.--For the purposes of this paragraph and
subsection (a)(1):
``(A) CPI-U.--The term `CPI-U' means, when used
with respect to a calendar year, the Consumer Price
Index for all urban consumers, as published by the
Bureau of Labor Statistics, for September of such year.
``(B) Average hourly earnings.--The term `average
hourly earnings' means, when used with respect to a
calendar year, the total private average hourly
earnings from the data on average hourly and weekly
earnings of production and nonsupervisory employees on
private nonfarm payrolls by industry sector, seasonally
adjusted, as published by the Bureau of Labor
Statistics, for September of such year.
``(C) Interval period.--The term `interval period'
means the period--
``(i) beginning on the first day of the 1st
calendar year beginning after the date of
enactment of the American Stability Act; and
``(ii) ending at the close of the last day
of the first calendar year for which the
minimum wage under subsection (a)(1) equals the
stability wage determined under paragraph (1)
of this subsection for such calendar year.''.
SEC. 102. TIPPED EMPLOYEES.
(a) Base Minimum Wage for Tipped Employees and Tips Retained by
Employees.--
(1) In general.--Section 3(m)(2)(A) of the Fair Labor
Standards Act of 1938 (29 U.S.C. 203(m)(2)(A)) shall be amended
to read as follows:
``(A) The wage required to be paid to a tipped employee
shall be the wage set forth in section 6(a)(1). Any employee
shall have the right to retain any tips received by such
employee, except that this subsection shall not be construed to
prohibit the pooling of tips among employees who customarily
and regularly receive tips. An employer shall inform each
employee of the right and exception provided under the
preceding sentence.''.
(2) Effective date.--The amendment made by subsection (a)
shall take effect on January 1 of the first calendar year that
begins after the date of enactment of this Act.
(b) Penalties.--Section 16 of the Fair Labor Standards Act of 1938
(29 U.S.C. 216) is amended--
(1) in the third sentence of subsection (b), by inserting
``or used'' after ``kept''; and
(2) in the second sentence of subsection (e)(2), by
inserting ``or used'' after ``kept''.
SEC. 103. SCHEDULED REPEAL OF SEPARATE MINIMUM WAGE FOR NEWLY HIRED
EMPLOYEES WHO ARE LESS THAN 20 YEARS OLD.
(a) In General.--Section 6(g) of the Fair Labor Standards Act of
1938 (29 U.S.C. 206(g)), as amended by subsection (a), shall be
repealed.
(b) Effective Date.--The repeal made by subsection (a) shall take
effect on January 1 of the first calendar year that begins after the
date of enactment of this Act.
SEC. 104. PUBLICATION OF NOTICE; TECHNICAL ASSISTANCE.
Section 6 of the Fair Labor Standards Act of 1938 (29 U.S.C. 206),
as amended by section 2(b), is further amended by adding at the end the
following:
``(i) Publication of Wage Rates.--Not later than 60 days prior to
the effective date of any increase in the required wage determined
under subsection (a)(1), the Secretary shall publish in the Federal
Register and on the website of the Department of Labor a notice
announcing each increase in such required wage.
``(j) Transition Assistance.--Upon request, the Secretary shall
provide--
``(1) technical assistance and information to employers for
the purposes of--
``(A) assisting such employers to comply with
subsection (a), as amended by the American Stability
Act; and
``(B) ensuring continuing employment opportunities
for individuals with disabilities who received a
special minimum wage rate under this section 14(c) (as
in effect on the day before the date of enactment of
the American Stability Act); and
``(2) information to individuals who were employed at a
special minimum wage rate under section 14(c) (as in effect on
the day before the date of enactment of the American Stability
Act), which may include referrals to Federal or State entities
with expertise in competitive integrated employment.''.
SEC. 105. PROMOTING ECONOMIC SELF-SUFFICIENCY FOR INDIVIDUALS WITH
DISABILITIES.
(a) Transition to Fair Wages for Individuals With Disabilities.--
(1) In general.--Subparagraph (A) of section 14(c)(1) of
the Fair Labor Standards Act of 1938 (29 U.S.C. 214(c)(1))
shall be amended to read as follows:
``(A) at a rate that equals or exceeds, for each year, the
wage set forth in section 6(a)(1).''.
(2) Effective date.--The amendment made by paragraph (A)
shall take effect on January 1 of the first calendar year that
begins after the date of enactment of this Act.
(b) Prohibition on New Special Certificates.--
(1) In general.--Section 14(c) of the Fair Labor Standards
Act of 1938 (29 U.S.C. 214(c)) is amended by adding at the end
the following:
``(6) Prohibition on New Special Certificates.--Notwithstanding
paragraph (1), the Secretary shall not issue a special certificate
under this subsection to an employer that was not issued a special
certificate under this subsection before the date of enactment of the
American Stability Act.''.
(2) Sunset.--Section 14(c) of the Fair Labor Standards Act
of 1938 (29 U.S.C. 214(c)), as amended by paragraph (2), is
further amended by adding at the end the following:
``(7) Sunset.--On January 1 of the first calendar year that begins
after the date of enactment of the American Stability Act, the
authority to issue special certificates under paragraph (1) shall
expire, and no special certificates issued under paragraph (1) shall
have any legal effect .''.
(3) Effective date.--The amendments made by this paragraph
shall take effect on the date of enactment of this Act.
TITLE I--INCOME TAX MODIFICATIONS
SEC. 1. MODIFICATION OF INCOME TAX BRACKETS BASED ON ANNUALIZED
STABILITY WAGE.
(a) In General.--Section 1 of the Internal Revenue Code of 1986 is
amended by striking subsections (a), (b), (c), (d), and (e) and
inserting the following new subsections:
``(a) In General.--There is hereby imposed on the taxable income of
every individual, every estate, and every trust a tax determined under
this section.
``(b) Amount of Tax.--The tax determined under this section shall
be equal to--
``(1) in the case of any taxpayer whose taxable income does
not exceed the maximum bracket amount for the lowest tax
bracket for the taxpayer's filing status, the product of the
percentage which constitutes such lowest tax bracket multiplied
by such taxable income, and
``(2) in the case of any taxpayer whose taxable income
exceeds the maximum bracket amount for such lowest tax bracket,
the sum of--
``(A) the maximum tax amount for each tax bracket
for the taxpayer's filing status with respect to which
the taxpayer's taxable income exceeds the maximum
bracket amount for such tax bracket, plus
``(B) the product of--
``(i) the percentage which constitutes the
tax bracket for the taxpayer's filing status
which is next above the highest bracket amount
for which an amount is included under
subparagraph (A), multiplied by
``(ii) so much of the taxable income of the
taxpayer as exceeds the maximum bracket amount
of such highest tax bracket.
``(c) Determination of Maximum Bracket Amounts.--
``(1) Married individuals filing joint returns and
surviving spouses.--In the case of every married individual (as
defined in section 7703) who makes a single return jointly with
the individual's spouse under section 6013, and every surviving
spouse--
``(A) the maximum bracket amount for the 10 percent
bracket is the product of 0.56 multiplied by the
annualized stability wage for the taxable year,
``(B) the maximum bracket amount for the 12 percent
bracket is the product of 2.28 multiplied by the
annualized stability wage for the taxable year,
``(C) the maximum bracket amount for the 22 percent
bracket is the product of 4.8 multiplied by the
annualized stability wage for the taxable year,
``(D) the maximum bracket amount for the 24 percent
bracket is the product of 9.2 multiplied by the
annualized stability wage for the taxable year,
``(E) the maximum bracket amount for the 32 percent
bracket is the product of 11.6 multiplied by the
annualized stability wage for the taxable year,
``(F) the maximum bracket amount for the 35 percent
bracket is the product of 17.6 multiplied by the
annualized stability wage for the taxable year, and
``(G) the maximum bracket amount for the 37 percent
bracket is infinite.
``(2) Heads of households.--In the case of every head of
household--
``(A) the maximum bracket amount for the 10 percent
bracket is the product of 0.42 multiplied by the
annualized stability wage for the taxable year,
``(B) the maximum bracket amount for the 12 percent
bracket is the product of 1.52 multiplied by the
annualized stability wage for the taxable year,
``(C) the maximum bracket amount for the 22 percent
bracket is the product of 2.4 multiplied by the
annualized stability wage for the taxable year,
``(D) the maximum bracket amount for the 24 percent
bracket is the product of 4.6 multiplied by the
annualized stability wage for the taxable year,
``(E) the maximum bracket amount for the 32 percent
bracket is the product of 5.8 multiplied by the
annualized stability wage for the taxable year,
``(F) the maximum bracket amount for the 35 percent
bracket is the product of 14.6 multiplied by the
annualized stability wage for the taxable year, and
``(G) the maximum bracket amount for the 37 percent
bracket is infinite.
``(3) Unmarried individuals (other than surviving spouses
and heads of households).--In the case of every individual
(other than a surviving spouse or a head of household) who is
not a married individual (as defined in section 7703)--
``(A) the maximum bracket amount for the 10 percent
bracket is the product of 0.28 multiplied by the
annualized stability wage for the taxable year,
``(B) the maximum bracket amount for the 12 percent
bracket is the product of 1.14 multiplied by the
annualized stability wage for the taxable year,
``(C) the maximum bracket amount for the 22 percent
bracket is the product of 2.4 multiplied by the
annualized stability wage for the taxable year,
``(D) the maximum bracket amount for the 24 percent
bracket is the product of 4.6 multiplied by the
annualized stability wage for the taxable year,
``(E) the maximum bracket amount for the 32 percent
bracket is the product of 5.8 multiplied by the
annualized stability wage for the taxable year,
``(F) the maximum bracket amount for the 35 percent
bracket is the product of 14.6 multiplied by the
annualized stability wage for the taxable year, and
``(G) the maximum bracket amount for the 37 percent
bracket is infinite.
``(4) Married individuals filing separate returns.--In the
case of every married individual (as defined in section 7703)
who does not make a single return jointly with the individual's
spouse under section 6013--
``(A) the maximum bracket amount for the 10 percent
bracket is the product of 0.28 multiplied by the
annualized stability wage for the taxable year,
``(B) the maximum bracket amount for the 12 percent
bracket is the product of 1.14 multiplied by the
annualized stability wage for the taxable year,
``(C) the maximum bracket amount for the 22 percent
bracket is the product of 2.4 multiplied by the
annualized stability wage for the taxable year,
``(D) the maximum bracket amount for the 24 percent
bracket is the product of 4.6 multiplied by the
annualized stability wage for the taxable year,
``(E) the maximum bracket amount for the 32 percent
bracket is the product of 5.8 multiplied by the
annualized stability wage for the taxable year,
``(F) the maximum bracket amount for the 35 percent
bracket is the product of 8.8 multiplied by the
annualized stability wage for the taxable year, and
``(G) the maximum bracket amount for the 37 percent
bracket is infinite.
``(5) Estates and trusts.--In the case of every estate and
every trust for the taxable year--
``(A) the maximum bracket amount for the 10 percent
bracket is the product of 0.08 multiplied by the
annualized stability wage for the taxable year,
``(B) the maximum bracket amount for the 24 percent
bracket is the product of 0.27 multiplied by the
annualized stability wage for the taxable year,
``(C) the maximum bracket amount for the 35 percent
bracket is the product of 0.37 multiplied by the
annualized stability wage for the taxable year, and
``(D) the maximum bracket amount for the 37 percent
bracket is infinite.
``(d) Definitions.--For purposes of this section--
``(1) Annualized stability wage.--The term `annualized
stability wage' means, with respect to any taxable year, the
product of 2,080 multiplied by the stability wage (as defined
in section 6 of the Fair Labor Standards Act of 1938) for the
calendar year in which or with which such taxable year begins.
``(2) Maximum tax amount.--
``(A) In general.--The term `maximum tax amount'
means, with respect to any tax bracket, the product
of--
``(i) the percentage which constitutes such
tax bracket, multiplied by
``(ii) the excess of--
``(I) the maximum bracket amount
for such tax bracket, over
``(II) the highest maximum bracket
amount for the taxpayer's filing status
which is less than the maximum bracket
amount referred to in subclause (I).
``(B) Special rule for lowest tax bracket.--For
purposes of determining the maximum tax amount with
respect to the lowest tax bracket for a taxpayer's
filing status, the amount specified in subparagraph
(A)(ii)(II) shall be treated as being zero.
``(3) Filing status.--The term `filing status' means, with
respect to any taxpayer, the status of such taxpayer as being
described in paragraph (1), (2), (3), (4), or (5) of subsection
(c).
``(4) Tax brackets.--The term `tax bracket' means, with
respect to the filing status of any taxpayer, each bracket for
which a maximum bracket amount is determined for such filing
status.''.
(b) Conforming Amendments.--
(1) Section 1(f) of such Code is amended by striking all
that precedes paragraph (3) and inserting the following:
``(f) Publication of Tax Tables; Retention of Cost-of-Living
Adjustment for Other Provisions.--
``(1) Publication of tax tables.--Not later than December
15 of 2024, and each subsequent calendar year, the Secretary
shall publish tax tables which state the dollar amounts in
effect under subsections (b) and (c) with respect to taxable
years beginning in the succeeding calendar year.''.
(2) Section 1(f)(3) of such Code is amended by striking
``For purposes of this subsection'' and inserting ``For
purposes of any provision of law which refers to this
subsection''.
(3) Section 1(f) of such Code is amended by striking
paragraphs (7) and (8) and inserting the following new
paragraph:
``(7) Rounding.--If any increase determined under section 63(c)(4),
section 68(b)(2), or section 151(d)(4) is not a multiple of $50, such
increase shall be rounded to the next lowest multiple of $50.''.
(4) Section 1 of such Code is amended by striking
subsections (i) and (j).
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2024.
SEC. 2. SURCHARGE ON HIGH INCOME INDIVIDUALS, ESTATES, AND TRUSTS.
(a) In General.--Part I of subchapter A of chapter 1 of the
Internal Revenue Code of 1986 is amended by inserting after section 1
the following new section:
``SEC. 1A. SURCHARGE ON HIGH INCOME INDIVIDUALS, ESTATES, AND TRUSTS.
``(a) General Rule.--In the case of a taxpayer other than a
corporation, there is hereby imposed (in addition to any other tax
imposed by this subtitle) a tax equal to the sum of--
``(1) 3 percent of so much of the modified adjusted gross
income of the taxpayer as exceeds--
``(A) the product of 25 multiplied by the
annualized stability wage for the taxable year, in the
case of any taxpayer not described in subparagraph (B)
or (C),
``(B) the product of 12.5 multiplied by the
annualized stability wage for the taxable year, in the
case of a married individual filing a separate return,
and
``(C) the product of 4.8 multiplied by the
annualized stability wage for the taxable year, in the
case of an estate or trust, plus
``(2) 5 percent of so much of the modified adjusted gross
income of the taxpayer as exceeds--
``(A) the product of 365 multiplied by the
annualized stability wage for the taxable year, in the
case of any taxpayer not described in subparagraph (B)
or (C),
``(B) the product of 182.5 multiplied by the
annualized stability wage for the taxable year, in the
case of a married individual filing a separate return,
and
``(C) the product of 12 multiplied by the
annualized stability wage for the taxable year, in the
case of an estate or trust.
``(b) Modified Adjusted Gross Income.--For purposes of this
section, the term `modified adjusted gross income' means adjusted gross
income reduced by any deduction (not taken into account in determining
adjusted gross income) allowed for investment interest (as defined in
section 163(d)) or business interest (as defined in section 163(j)). In
the case of an estate or trust, adjusted gross income shall be
determined as provided in section 67(e), and reduced by the amount
allowed as a deduction under section 642(c).
``(c) Annualized Stability Wage.--For purposes of this section, the
term `annualized stability wage' has the meaning given such term in
section 1(d)(1).
``(d) Special Rules.--
``(1) Nonresident alien.--In the case of a nonresident
alien individual (other than an individual described in section
876(a) or 877(a)), only amounts taken into account in
connection with the tax imposed under section 871(b) shall be
taken into account under this section.
``(2) Citizens and residents living abroad.--Each dollar
amount which is applicable to any taxpayer under subsection (a)
shall be decreased (but not below zero) by the excess (if any)
of--
``(A) the amounts excluded from the taxpayer's
gross income under section 911, over
``(B) the amounts of any deductions or exclusions
disallowed under section 911(d)(6) with respect to the
amounts described in subparagraph (A).
``(3) Charitable trusts.--Subsection (a) shall not apply to
a trust all the unexpired interests in which are devoted to one
or more of the purposes described in section 170(c)(2)(B).
``(4) Not treated as tax imposed by this chapter for
certain purposes.--The tax imposed under this section shall not
be treated as tax imposed by this chapter for purposes of
determining the amount of any credit under this chapter (other
than sections 27 and 901) or for purposes of section 55.
``(5) Electing small business trusts.--For purposes of the
determination of adjusted gross income, section 641(c)(1)(A)
shall not apply and all portions of any electing small business
trust shall be treated as a single trust.
``(e) Regulations.--The Secretary shall issue such regulations or
other guidance as may be necessary or appropriate to carry out the
purposes of this section, including regulations or other guidance to
prevent the avoidance of the purposes of this section.''.
(b) Coordination With Certain Provisions.--
(1) Interest on certain deferred tax liability.--Section
453A(c) of such Code is amended by redesignating paragraph (6)
as paragraph (7) and by inserting after paragraph (5) the
following new paragraph:
``(6) Surcharge on high income individuals taken into
account in determining maximum rate of tax.--For purposes of
paragraph (3)(B), the maximum rate of tax in effect under
section 1 shall be treated as being equal to the sum of such
rate and the rates in effect under paragraphs (1) and (2) of
section 1A(a).''.
(2) Alien residents of puerto rico, guam, american samoa,
or the northern mariana islands.--Section 876(a) of such Code
is amended by striking section 1 and inserting ``sections 1 and
1A''.
(3) Expatriation to avoid tax.--Section 877(b) of such Code
is amended by inserting ``and section 1A'' after ``section 1 or
55''.
(4) Limitation on foreign tax credit.--
(A) Section 904(b)(3)(E)(i)(I) of such Code is
amended by inserting ``increased by the sum of the
rates set forth in paragraphs (1) and (2) of section
1A(a)'' after ``(whichever applies)''.
(B) Section 904(d)(2)(F) of such Code is amended by
adding at the end the following: ``For purposes of the
first sentence of this subparagraph, the highest rate
of tax specified in section 1 shall be treated as being
equal to the sum of such rate and the rates in effect
under paragraphs (1) and (2) of section 1A(a).''.
(5) Election by individuals to be subject to tax at
corporate rates.--Section 962(a)(1) of such Code is amended by
inserting ``, 1A,'' after ``sections 1''.
(6) Interest on certain tax deferral.--Section 1291(c)(2)
of such Code is amended by adding at the end the following:
``For purposes of the preceding sentence, the highest rate of
tax in effect under section 1 shall be treated as being equal
to the sum of such rate and the rates in effect under
paragraphs (1) and (2) of section 1A(a).''.
(7) Averaging of farm income.--Section 1301(a) of such Code
is amended by striking ``section 1'' both places it appears and
inserting ``sections 1 and 1A''.
(8) Title 11 cases.--Section 1398(c)(2) of such Code is
amended by inserting ``and tax shall be imposed under section
1A by treating the estate as a married individual filing a
separate return'' before the period at the end.
(9) Withholding of tax on foreign partners' share of
effectively connected income.--Section 1446(b)(2) of such Code
is amended by adding at the end the following flush sentence:
``For purposes of subparagraph (A), the highest rate of tax in
effect under section 1 shall be treated as being equal to the
sum of such rate and the rates in effect under paragraphs (1)
and (2) of section 1A(a).''.
(10) Relief from joint and several liability on joint
return.--Section 6015(d)(2)(B) of such Code is amended by
inserting ``, 1A,'' after ``section 1''.
(11) Partnership adjustments.--
(A) Section 6225(b)(1) of such Code is amended by
adding at the end the following flush sentence:
``For purposes of subparagraph (B), the highest rate of tax in
effect under section 1 shall be treated as being equal to the
sum of such rate and the rates in effect under paragraphs (1)
and (2) of section 1A(a).''.
(B) Section 6225(c)(4)(A) of such Code is amended--
(i) by striking ``subsection (b)(1)(A)''
and inserting ``subsection (b)(1)(B)'', and
(ii) by striking ``or'' at the end of
clause (i), by adding ``or'' at the end of
clause (ii), and by inserting after clause (ii)
the following new clause:
``(iii) is not an individual subject to one
or both of the rates of tax in effect under
paragraphs (1) and (2) of section 1A(a),''.
(12) Required payments for entities electing not to have
required taxable year.--Section 7519(b) of such Code is amended
by inserting ``and increased by the sum of the rates in effect
under paragraphs (1) and (2) of section 1A(a)'' before the
period at the end.
(c) Clerical Amendment.--The table of sections for part I of
subchapter A of chapter 1 of such Code is amended by inserting after
the item relating to section 1 the following new item:
``Sec. 1A. Surcharge on high income individuals.''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2024.
SEC. 3. ALTERNATIVE MAXIMUM TAX FOR LOW-INCOME INDIVIDUALS.
(a) In General.--Part I of subchapter A of chapter 1 of the
Internal Revenue Code of 1986, as amended by section 202, is amended by
inserting after section 1A the following new section:
``SEC. 1B. ALTERNATIVE MAXIMUM TAX FOR LOW-INCOME INDIVIDUALS.
``(a) In General.--In the case of an qualified low-income
individual, the tax imposed under section 1 for any taxable year shall
not exceed 24.4 percent of the excess of--
``(1) the taxpayer's modified adjusted gross income for
such taxable year, over
``(2) the cost-of-living exemption for such taxable year.
``(b) Qualified Low-Income Individual.--For purposes of this
section, the term `qualified low-income individual' means, with respect
to any taxable year, any individual (other than an estate or trust) if
the taxpayers modified adjusted gross income for such taxable year is
less than 200 percent of the cost-of-living exemption for such taxable
year.
``(c) Cost-of-Living Exemption.--For purposes of this section--
``(1) In general.--The term `cost-of-living exemption'
means, with respect to any taxable year--
``(A) in the case of a taxpayer not described in
subparagraph (B) or (C), 100 percent of annualized
cost-of-living wage,
``(B) in the case of a joint return, 200 percent of
the annualized cost-of-living wage, and
``(C) in the case of a head of household, 140
percent of the annualized cost-of-living wage.
``(2) Annualized cost-of-living wage.--The term `annualized
cost-of-living wage' means, with respect to any taxable year,
the product of 2,080 multiplied by the cost-of-living wage (as
defined in section 6 of the Fair Labor Standards Act of 1938)
for the calendar year in which or with which such taxable year
begins.
``(d) Modified Adjusted Gross Income.--For purposes of this
section, the term `modified adjusted gross income' means adjusted gross
income increased by any amount excluded from gross income under section
911, 931, or 933.''.
(b) Clerical Amendment.--The table of sections for part I of
subchapter A of chapter 1 of such Code, as amended by section 202, is
amended by inserting after the item relating to section 1A the
following new item:
``Sec. 1B. Alternative maximum tax for low-income individuals.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2024.
TITLE II--EARNED INCOME DISALLOWANCE
SEC. 301. EARNED INCOME DISALLOWANCE.
(a) In General.--Notwithstanding any other provision of law, for
purposes of determining the eligibility of a specified individual for
benefits or assistance (or the amount or extent of benefits or
assistance) under any means-tested Federal program, or under any means-
tested State or local program financed in whole or in part with Federal
funds--
(1) with respect to the 1-year period beginning on the
effective date described in section 401, if the earned income
of such individual for such 1-year period (determined without
regard to this section) does not exceed the product of 2,080
multiplied by the cost-of-living wage (as defined in section 6
of the Fair Labor Standards Act of 1938) for the calendar year
in which such 1-year period ends, the earned income of such
individual shall not be treated as exceeding the earned income
of such individual for the 1-year period ending on such
effective date, and
(2) with respect to the 1-year period beginning 1 year
after such effective date, if the earned income of such
individual for such 1-year period (determined without regard to
this section) does not exceed the product of 2,080 multiplied
by the cost-of-living wage (as defined in section 6 of the Fair
Labor Standards Act of 1938) for the calendar year in which
such 1-year period ends, the earned income of such individual
shall not be treated as exceeding the sum of--
(A) the earned income of such individual for the 1-
year period ending on such effective date, plus
(B) 50 percent of the excess (if any) of--
(i) the earned income of such individual
for the 1-year period beginning 1 year after
such effective date, over
(ii) the earned income of such individual
for the 1-year period ending on such effective
date.
(b) Specified Individual.--For purposes of this section, the
``specified individual'' means any individual if the earned income of
such individual for the 1-year period ending on the effective date
described in section 410 exceeds zero.
TITLE III--EFFECTIVE DATE
SEC. 401. EFFECTIVE DATE.
Except as otherwise specified in this Act, this Act, and the
amendments made by this Act, shall take effect on the 1st day of the
3rd month that begins after the date of enactment of this Act.
<all>