[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 539 Introduced in Senate (IS)]







106th CONGRESS
  1st Session
                                 S. 539

  To amend the Internal Revenue Code of 1986 to increase the maximum 
taxable income for the 15 percent rate bracket, to replace the Consumer 
 Price Index with the national average wage index for purposes of cost-
    of-living adjustments, to lessen the impact of the noncorporate 
            alternative minimum tax, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 4, 1999

 Mr. Brownback 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 increase the maximum 
taxable income for the 15 percent rate bracket, to replace the Consumer 
 Price Index with the national average wage index for purposes of cost-
    of-living adjustments, to lessen the impact of the noncorporate 
            alternative minimum tax, 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. INCREASE IN MAXIMUM TAXABLE INCOME FOR 15 PERCENT RATE 
              BRACKET.

    (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--
            (1) in paragraph (2)--
                    (A) by redesignating subparagraphs (B) and (C) as 
                subparagraphs (C) and (D),
                    (B) by inserting after subparagraph (A) the 
                following:
                    ``(B) for taxable years beginning in any calendar 
                year after 1999 and before 2010--
                            ``(i) in the case of the table contained in 
                        subsection (c), by increasing the maximum 
                        dollar amount for the 15 percent rate bracket 
                        and the minimum dollar amount for the 28 
                        percent rate bracket otherwise determined under 
                        subparagraph (A) by the applicable dollar 
                        amount for such calendar year, and
                            ``(ii) in the case of the tables contained 
                        in subsections (a), (b), and (d), by increasing 
                        the maximum and minimum dollar amounts for the 
                        15 and 28 percent rate brackets, respectively, 
                        by an amount which maintains the same 
                        proportionate differential in such dollar 
                        amounts among the tables in subsections (a), 
                        (b), (c), and (d) as existed in calendar year 
                        1999,'', and
                    (C) by striking ``subparagraph (A)'' in 
                subparagraph (C) (as so redesignated) and inserting 
                ``subparagraphs (A) and (B)'', and
            (2) by adding at the end the following:
            ``(8) Applicable dollar amount.--
                    ``(A) In general.--For purposes of paragraph 
                (2)(B), the applicable dollar amount for any calendar 
                year is equal to the applicable percentage of the 
                excess of--
                            ``(i) the contribution and benefit base (as 
                        determined under section 230 of the Social 
                        Security Act) for the calendar year, over
                            ``(ii) the maximum dollar amount for the 15 
                        percent rate bracket for the table contained in 
                        subsection (c) for the calendar year otherwise 
                        determined under paragraph (2)(A).
                    ``(B) Applicable percentage.--For purposes of 
                subparagraph (A), the applicable percentage for any 
                calendar year shall be determined as follows:

                                                             Applicable
``Calendar year:                                            Percentage:
    2000..........................................                  10 
    2001..........................................                  20 
    2002..........................................                  30 
    2003..........................................                  40 
    2004..........................................                  50 
    2005..........................................                  60 
    2006..........................................                  70 
    2007..........................................                  80 
    2008..........................................                  90 
    2009..........................................               100.''
    (b) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this 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 
        percentage (if any) by which--
                    ``(A) the national average wage index for the 
                preceding calendar year, exceeds
                    ``(B) such index for calendar year 1998.
            ``(4) National average wage index for any calendar year.--
        For purposes of paragraph (3), the national average wage index 
        for any calendar year is the average of such index as of 
the close of the 12-month period ending on August 31 of such calendar 
year.
            ``(5) National average wage index.--For purposes of this 
        subsection, 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 Amendments.--
            (1) Section 42(h)(6)(G)(ii) of the Internal Revenue Code of 
        1986 is amended--
                    (A) by striking ``the CPI'' the first and third 
                places it appears and inserting ``the national average 
                wage index'',
                    (B) by striking ``the CPI'' the second place it 
                appears and inserting ``such index'', and
                    (C) by striking ``section 1(f)(4)'' and inserting 
                ``section 1(f)(5)''.
            (2) Section 162(p)(2) of such Code is amended by striking 
        ``(as defined in section 1(f)(5))''.
            (3) Section 213(d)(10)(B)(ii)(I) of such Code is amended by 
        striking ``(as defined in section 1(f)(5))''.
            (4) The last sentence of section 936(j)(4)(C) of such Code 
        is amended by inserting ``, as in effect for taxable years 
        beginning before January 1, 1999'' before the period.
    (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.

SEC. 3. INFLATION ADJUSTMENT FOR INDIVIDUAL ALTERNATIVE MINIMUM TAX 
              EXEMPTION AMOUNTS.

    (a) In General.--Section 55(d) of the Internal Revenue Code of 1986 
(relating to exemption amount) is amended by adding at the end the 
following:
            ``(4) Inflation adjustment.--
                    ``(A) In general.--In the case of any taxable year 
                beginning after 1999, each of the dollar amounts 
                contained in paragraph (1) and paragraph (3) (other 
                than subparagraph (A)(ii) thereof) 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 such 
                        calendar year.
                    ``(B) Rounding.--If any increase determined under 
                subparagraph (A) is not a multiple of $50, such 
                increase shall be rounded to the nearest multiple of 
                $50.''
    (b) Conforming Amendment.--Section 55(d)(3)(A) of the Internal 
Revenue Code of 1986 is amended to read as follows:
                    ``(A) $150,000 in the case of a taxpayer described 
                in--
                            ``(i) paragraph (1)(A), or
                            ``(ii) paragraph (2),''.
    (c) Effective Dates.--
            (1) In general.--The amendment made by subsection (a) shall 
        apply to taxable years beginning after December 31, 1999.
            (2) Conforming amendment.--The amendment made by subsection 
        (b) shall apply to taxable years beginning after December 31, 
        1998.
                                 <all>