[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 1012 Introduced in Senate (IS)]







106th CONGRESS
  1st Session
                                S. 1012

 To amend the Internal Revenue Code of 1986 to use the Consumer Price 
 Index in addition to the national average wage index for purposes of 
                      cost-of-living adjustments.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 11, 1999

   Mr. Frist introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to use the Consumer Price 
 Index in addition to the national average wage index for purposes of 
                      cost-of-living adjustments.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Bracket Creep Correction Act''.

SEC. 2. USE OF NATIONAL AVERAGE WAGE INDEX FOR COST-OF-LIVING 
              ADJUSTMENTS.

    (a) In General.--Section 1(f) 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 striking paragraphs (3), (4), 
and (5) and inserting the following:
            ``(3) Cost-of-living adjustment.--For purposes of paragraph 
        (2), the cost-of-living adjustment for any calendar year is the 
        sum of--
                    ``(A) the percentage (if any) by which--
                            ``(i) the CPI for the preceding calendar 
                        year, exceeds
                            ``(ii) such index for calendar year 1998, 
                        and
                    ``(B) the percentage (if any) by which--
                            ``(i) the national average wage index for 
                        the preceding calendar year, exceeds
                            ``(ii) such index for calendar year 1998.
            ``(4) CPI and national average wage index for any calendar 
        year.--For purposes of paragraph (3)--
                    ``(A) the CPI for any calendar year is the average 
                of the Consumer Price Index as of the close of the 12-
                month period ending on August 31 of such calendar year, 
                and
                    ``(B) the national average wage index for any 
                calendar year is the average of the national average 
                wage index as of the close of the 12-month period 
                ending on August 31 of such calendar year.
            ``(5) CPI; national average wage index.--For purposes of 
        this subsection--
                    ``(A) Consumer price index.--The term `Consumer 
                Price Index' means the last Consumer Price Index for 
                all-urban consumers published by the Department of 
                Labor. For purposes of the preceding sentence, the 
                revision of the Consumer Price Index which is most 
                consistent with the Consumer Price Index for calendar 
                year 1986 shall be used.
                    ``(B) National average wage index.--The term 
                `national average wage index' has the meaning given 
                such term by section 209(k)(1) of the Social Security 
                Act, as in effect on the date of the enactment of this 
                paragraph.''
    (b) Conforming Amendments to Tax Tables To Restart Inflation 
Adjustment.--Section 1 of the Internal Revenue Code of 1986 (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--
            ``(1) every married individual (as defined in section 7703) 
        who makes a single return jointly with his spouse under section 
        6013, and
            ``(2) 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 $43,050...............
                                        15% of taxable income.
    Over $43,050 but not over 
        $104,050.
                                        $6,457.50, plus 28% of the 
                                                excess over $43,050.
    Over $104,050 but not over 
        $158,550.
                                        $23,537.50, plus 31% of the 
                                                excess over $104,050.
    Over $158,550 but not over 
        $283,150.
                                        $40,432.50, plus 36% of the 
                                                excess over $158,550.
    Over $283,150..................
                                        $85,288.50 plus 39.6% of the 
                                                excess over $283,150.
    ``(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 $34,550...............
                                        15% of taxable income.
    Over $34,550 but not over 
        $89,150.
                                        $5,182.50, plus 28% of the 
                                                excess over $34,550.
    Over $89,150 but not over 
        $144,400.
                                        $20,470.50, plus 31% of the 
                                                excess over $89,150.
    Over $144,400 but not over 
        $283,150.
                                        $37,598, plus 36% of the excess 
                                                over $144,400.
    Over $283,150..................
                                        $87,548 plus 39.6% of the 
                                                excess over $283,150.
    ``(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 married individual (as defined in section 
7703) filing a joint return or a separate return, a surviving spouse as 
defined in section 2(a), or a head of 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 $25,750...............
                                        15% of taxable income.
    Over $25,750 but not over 
        $62,450.
                                        $3,862.50, plus 28% of the 
                                                excess over $25,450.
    Over $62,450 but not over 
        $130,250.
                                        $14,138.50, plus 31% of the 
                                                excess over $62,450.
    Over $130,250 but not over 
        $283,150.
                                        $35,156.50, plus 36% of the 
                                                excess over $130,250.
    Over $283,150..................
                                        $90,200.50 plus 39.6% of the 
                                                excess over $283,150.
    ``(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 $21,175...............
                                        15% of taxable income.
    Over $21,175 but not over 
        $52,025.
                                        $3,228.75, plus 28% of the 
                                                excess over $21,175.
    Over $52,025 but not over 
        $79,275.
                                        $11,768.75, plus 31% of the 
                                                excess over $52,025.
    Over $79,275 but not over 
        $141,575.
                                        $20,216.20, plus 36% of the 
                                                excess over $79,275.
    Over $141,575..................
                                        $42,644.25 plus 39.6% of the 
                                                excess over $141,575.
    ``(e) Estates and Trusts.--There is hereby imposed on the taxable 
income of--
            ``(1) every estate, and
            ``(2) every trust,
taxable under this subsection a tax determined in accordance with the 
following table:

``If taxable income is:             The tax is:
    Not over $1,750................
                                        15% of taxable income.
    Over $1,750 but not over $4,050
                                        $262.50, plus 28% of the excess 
                                                over $1,750.
    Over $4,050 but not over $6,200
                                        $906.50, plus 31% of the excess 
                                                over $4,050.
    Over $6,200 but not over $8,450
                                        $1,573, plus 36% of the excess 
                                                over $6,200.
    Over $8,450....................
                                        $2,383, plus 39.6% of the 
                                                excess over $8,450.''
    (c) Inflation Adjustment To Apply in Determining Rates for 2000.--
Section 1(f) of the Internal Revenue Code of 1986 is amended--
            (1) by striking ``1993'' in paragraph (1) and inserting 
        ``1999'',
            (2) by striking ``1992'' in paragraph (3)(B) and inserting 
        ``1998'', and
            (3) by striking paragraph (7).
    (d) Conforming Amendments.--
            (1) The following provisions of the Internal Revenue Code 
        of 1986 are each amended by striking ``1992'' and inserting 
        ``1998'' each place it appears:
                    (A) Section 25A(h).
                    (B) Section 32(j)(1)(B).
                    (C) Section 41(e)(5)(C).
                    (D) Section 59(j)(2)(B).
                    (E) Section 63(c)(4)(B).
                    (F) Section 68(b)(2)(B).
                    (G) Section 135(b)(2)(B)(ii).
                    (H) Section 151(d)(4).
                    (I) Section 220(g)(2).
                    (J) Section 221(g)(1)(B).
                    (K) Section 512(d)(2)(B).
                    (L) Section 513(h)(2)(C)(ii).
                    (M) Section 685(c)(3)(B).
                    (N) Section 877(a)(2).
                    (O) Section 911(b)(2)(D)(ii)(II).
                    (P) Section 2032A(a)(3)(B).
                    (Q) Section 2503(b)(2)(B).
                    (R) Section 2631(c)(1)(B).
                    (S) Section 4001(e)(1)(B).
                    (T) Section 4261(e)(4)(A)(ii).
                    (U) Section 6039F(d).
                    (V) Section 6323(i)(4)(B).
                    (W) Section 6601(j)(3)(B).
                    (X) Section 7430(c)(1).
            (2) Subclause (II) of section 42(h)(6)(G)(i) of such Code 
        is amended by striking ``1987'' and inserting ``1998''.
            (3) Clause (ii) of section 132(f)(6)(A) of such Code, as 
        amended by section 9010(b)(1) of the Transportation Equity Act 
        for the 21st Century, is amended by striking ``, by 
        substituting `calendar year 1998' for `calendar year 1992'.'' 
        and by inserting a period.
            (4) Subparagraph (A) of section 132(f)(6) of such Code, as 
        amended by section 9010(c)(2) of the Transportation Equity Act 
        for the 21st Century, is amended by striking clause (ii) and 
        all that follows through ``paragraph (2)(A).'' and inserting:
                            ``(ii) the cost-of-living adjustment 
                        determined under section 1(f)(3) for the 
                        calendar year in which the taxable year begins. 
                        In the case of any taxable year beginning in a 
                        calendar year after 2002, section 1(f)(3) shall 
                        be applied by substituting `calendar year 2001' 
                        for `calendar year 1998' for purposes of 
                        adjusting the dollar amount contained in 
                        paragraph (2)(A).''.
            (5) Subparagraph (B) of section 6334(g)(1) of such Code is 
        amended by striking ``, by substituting `calendar year 1998' 
        for `calendar year 1992' in subparagraph (B) thereof''.
    (e) Additional Conforming Amendment.--Section 42(h)(6)(G)(ii) of 
the Internal Revenue Code of 1986 is amended by striking ``the CPI'' 
and all that follows through ``base calendar year'' and inserting ``the 
cost-of-living adjustment for any calendar year (as defined in section 
1(f)(3)) exceeds 5 percent, the CPI and national average wage index for 
the base calendar year''.
    (f) 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, 1998.
            (2) Conforming amendment.--The amendment made by subsection 
        (d)(4) shall apply to taxable years beginning after December 
        31, 2001.
                                 <all>