[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 799 Introduced in Senate (IS)]







106th CONGRESS
  1st Session
                                 S. 799

To amend the Internal Revenue Code of 1986 to modify the tax brackets, 
   eliminate the marriage penalty, allow individuals a deduction for 
  amounts paid for insurance for medical care, increase contribution 
  limits for individual retirement plans and pensions, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 14, 1999

 Mr. Campbell 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 modify the tax brackets, 
   eliminate the marriage penalty, allow individuals a deduction for 
  amounts paid for insurance for medical care, increase contribution 
  limits for individual retirement plans and pensions, 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. 5 PERCENTAGE POINT REDUCTION IN GENERAL TAX RATE.

    (a) General Rule.--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...............
                                        10.0% of taxable income.
    Over $43,050 but not over 
        $104,050.
                                        $4,305, plus 23.0% of the 
                                                excess over $43,050.
    Over $104,050 but not over 
        $158,550.
                                        $18,335, plus 26.0% of the 
                                                excess over $104,050.
    Over $158,550 but not over 
        $283,150.
                                        $32,505, plus 31.0% of the 
                                                excess over $158,550.
    Over $283,150..................
                                        $71,131, plus 34.6% 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...............
                                        10.0% of taxable income.
    Over $34,550 but not over 
        $89,150.
                                        $3,455, plus 23.0% of the 
                                                excess over $34,550.
    Over $89,150 but not over 
        $144,400.
                                        $16,013, plus 26.0% of the 
                                                excess over $89,150.
    Over $144,400 but not over 
        $283,150.
                                        $30,378, plus 31.0% of the 
                                                excess over $144,400.
    Over $283,150..................
                                        $73,390.50, plus 34.6% 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...............
                                        10.0% of taxable income.
    Over $25,750 but not over 
        $62,450.
                                        $2,575, plus 23.0% of the 
                                                excess over $25,750.
    Over $62,450 but not over 
        $130,250.
                                        $11,016, plus 26.0% of the 
                                                excess over $62,450.
    Over $130,250 but not over 
        $283,150.
                                        $28,644, plus 31.0% of the 
                                                excess over $130,250.
    Over $283,150..................
                                        $76,043, plus 34.6% 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 $21,525...............
                                        10.0% of taxable income.
    Over $21,525 but not over 
        $52,025.
                                        $2,152.50, plus 23.0% of the 
                                                excess over $21,525.
    Over $52,025 but not over 
        $79,275.
                                        $9,167.50, plus 26.0% of the 
                                                excess over $52,025.
    Over $79,275 but not over 
        $141,575.
                                        $16,252.50, plus 31.0% of the 
                                                excess over $79,275.
    Over $141,575..................
                                        $35,565.50, plus 34.6% 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.''
    (b) Reduction in Alternative Minimum Tax Rate.--Section 
55(b)(1)(A)(i) of the Internal Revenue Code of 1986 (relating to 
tentative minimum tax for noncorporate taxpayers) is amended--
            (1) by striking ``26 percent'' in subclause (I) and 
        inserting ``21 percent'', and
            (2) by striking ``28 percent'' in subclause (II) and 
        inserting ``23 percent''.
    (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 1(g)(7)(B)(ii)(II) of the Internal Revenue Code 
        of 1986 is amended by striking ``15 percent'' and inserting 
        ``10 percent''.
            (2) Section 1(h) of such Code is amended by striking ``28 
        percent'' and inserting ``23 percent'' each place it appears.
            (3) Section 1(h) of such Code is amended by striking ``28-
        percent'' and inserting ``23-percent'' each place it appears.
            (4) Sections 531 and 541 of such Code are each amended by 
        striking ``39.6 percent'' and inserting ``34.6 percent''.
            (5) Section 3402(p)(1)(B) of such Code is amended by 
        striking ``15, 28, or 31'' and inserting ``10, 23, or 26''.
            (6) Section 3402(p)(2) of such Code is amended by striking 
        ``15 percent'' and inserting ``10 percent''.
            (7) Section 3402(q)(1) of such Code is amended by striking 
        ``28 percent'' and inserting ``23 percent''.
            (8) Section 3402(r)(3) of such Code is amended by striking 
        ``31 percent'' and inserting ``26 percent''.
            (9) Section 3406(a)(1) of such Code is amended by striking 
        ``31 percent'' and inserting ``26 percent''.
    (f) Effective Dates.--
            (1) In general.--Except as provided in paragraphs (2) and 
        (3), the amendments made by this section shall apply to taxable 
        years beginning after December 31, 1999.
            (2) Withholding.--The amendments made by paragraphs (5) 
        through (9) of subsection (e) shall apply to amounts paid after 
        December 31, 1999.
            (3) Conforming amendment.--The amendment made by subsection 
        (d)(4) shall apply to taxable years beginning after December 
        31, 2001.

SEC. 2. INCREASE IN MAXIMUM TAXABLE INCOME FOR 10 PERCENT RATE BRACKET.

    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), as amended by section 1(c), 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) in the case of the tables contained in 
                subsections (a), (b), (c), and (d), by increasing the 
                maximum taxable income level for the 10 percent rate 
                bracket and the minimum taxable income level for the 23 
                percent rate bracket otherwise determined under 
                subparagraph (A) for taxable years beginning in any 
                calendar year after 1999, by the applicable dollar 
                amount for such calendar year,'', 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:
            ``(7) Applicable dollar amount.--For purposes of paragraph 
        (2)(B), the applicable dollar amount for any calendar year 
        shall be determined as follows:
                    ``(A) Joint returns and surviving spouses.--In the 
                case of the table contained in subsection (a)--

``Calendar year:                              Applicable Dollar Amount:
    2000..........................................             $10,000 
    2001..........................................             $10,000 
    2002 and thereafter...........................             $20,000.
                    ``(B) Other tables.--In the case of the table 
                contained in subsection (b), (c), or (d)--

``Calendar year:                              Applicable Dollar Amount:
    2000..........................................              $5,000 
    2001..........................................              $5,000 
    2002 and thereafter...........................           $10,000.''

SEC. 3. 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 to 
read as follows:
            ``(2) Basic standard deduction.--For purposes of paragraph 
        (1), the basic standard deduction is--
                    ``(A) $8,500 in the case of--
                            ``(i) a joint return, or
                            ``(ii) a surviving spouse (as defined in 
                        section 2(a)),
                    ``(B) $6,250 in the case of a head of household (as 
                defined in section 2(b)), or
                    ``(C) $4,250 in any other case.''
    (b) Technical Amendments.--
            (1) Paragraph (4) of section 63(c) of the Internal Revenue 
        Code of 1986, as amended by section 1(d)(1)(E), is amended to 
        read as follows:
            ``(4) Adjustments for inflation.--In the case of any 
        taxable year beginning in a calendar year after 1999, each 
        dollar amount contained in paragraph (2) or (5) or subsection 
        (f) shall be increased by an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                the taxable year begins.''
            (2) Subparagraph (A) of section 63(c)(5) of such Code is 
        amended by striking ``$500'' and inserting ``$700''.
            (3) Subsection (f) of section 63 of such Code is amended by 
        striking ``$600'' each place it appears and inserting ``$850'' 
        and by striking ``$750'' in paragraph (3) and inserting 
        ``$1,050''.
            (4) Subparagraph (B) of section 1(f)(6) of such Code 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)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1999.

SEC. 4. DEDUCTION FOR AMOUNTS PAID FOR INSURANCE FOR MEDICAL CARE.

    (a) In General.--Part VII of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to additional itemized 
deductions for individuals) is amended by redesignating section 222 as 
section 223 and by inserting after section 221 the following new 
section:

``SEC. 222. INSURANCE FOR MEDICAL CARE.

    ``(a) Deduction Allowed.--
            ``(1) In general.--In the case of an individual, there 
        shall be allowed as a deduction for any taxable year an amount 
        equal to the amount paid during the taxable year for insurance 
        covering medical care or for any qualified long-term care 
        insurance contract for the taxpayer, and the taxpayer's spouse 
        and dependents.
            ``(2) Definitions.--For purposes of paragraph (1)--
                    ``(A) Insurance.--The term `insurance' includes 
                amounts paid as premiums under part B of title XVIII of 
                the Social Security Act (relating to supplementary 
                medical insurance for the aged).
                    ``(B) Medical care.--The term `medical care' has 
                the meaning given to such term by paragraphs (A), (B), 
                and (C) of section 213(d)(1).
                    ``(C) Qualified long-term care insurance 
                contract.--The term `qualified long-term care insurance 
                contract' has the meaning given to such term by section 
                7702B(b).
    ``(b) Coordination of Deduction.--No amount taken into account 
under subsection (a) shall be taken into account in computing the 
amount allowable to the taxpayer as a deduction under section 162(l) or 
213(a).
    ``(c) Coordination With Exclusion.--No amount excluded from income 
under section 125 shall be taken into account under subsection (a).''
    (b) Deduction Allowed if Individual Does Not Itemize.--Subsection 
(a) of section 62 of the Internal Revenue Code of 1986 (relating to 
general rule for adjusted gross income defined) is amended by inserting 
after paragraph (17) the following:
            ``(18) Insurance for medical care.--The deduction allowed 
        by section 222.''
    (c) Clerical Amendment.--The table of sections for part VII of 
subchapter B of chapter 1 of the Internal Revenue Code of 1986 is 
amended by striking the item relating to section 222 and inserting the 
following:

                              ``Sec. 222. Insurance for medical care.
                              ``Sec. 223. Cross reference.''
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1999.

SEC. 5. MODIFICATION OF DEDUCTION LIMITS FOR IRA CONTRIBUTIONS.

    (a) Increase in Contribution Limit.--Paragraph (1)(A) of section 
219(b) of the Internal Revenue Code of 1986 (relating to maximum amount 
of deduction) is amended by striking ``$2,000'' and inserting 
``$3,500''.
    (b) Conforming Amendments.--
            (1) Section 408(a)(1) of Internal Revenue Code of 1986 is 
        amended by striking ``$2,000'' and inserting ``$3,500''.
            (2) Section 408(b)(2)(B) of such Code is amended by 
        striking ``$2,000'' and inserting ``$3,500''.
            (3) Section 408(b) of such Code is amended by striking 
        ``$2,000'' in the matter following paragraph (4) and inserting 
        ``$3,500''.
            (4) Section 408(j) of such Code is amended by striking 
        ``$2,000'' and inserting ``$3,500''.
            (5) Section 408(p)(8) of such Code is amended by striking 
        ``$2,000'' and inserting ``$3,500''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1999.

SEC. 6. INCREASE IN LIMIT ON EXCLUSION AMOUNT FOR ELECTIVE DEFERRALS.

    (a) Increase in Elective Deferral Limit.--Paragraph (1) of section 
402(g) of the Internal Revenue Code of 1986 (relating to limitation on 
exclusion for elective deferrals) is amended by striking ``$7,000'' and 
inserting ``$15,000''.
    (b) Conforming Amendments.--
            (1)(A) Section 402(g) of the Internal Revenue Code of 1986 
        is amended by striking paragraph (4) and by redesignating 
        paragraphs (5), (6), (7), (8), and (9) as paragraphs (4), (5), 
        (6), (7), and (8), respectively.
            (B) Section 457(c)(2) of such Code is amended by striking 
        ``section 402(g)(8)(A)(iii)'' and inserting ``section 
        402(g)(7)(A)(iii)''.
            (C) Section 501(c)(18)(D)(iii) of such Code is amended by 
        striking ``(other than paragraph (4) thereof)''.
            (2) Section 402(g)(4) of such Code, as redesignated by 
        paragraph (1)(A), is amended by striking ``$7,000'' and 
        inserting ``$15,000''.
            (3) Section 402(g)(4) of such Code, as so redesignated, is 
        amended by inserting ``the base period taken into account shall 
        be the calendar quarter ending September 30, 1999, and'' after 
        ``except that''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1999.
                                 <all>