[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2599 Introduced in House (IH)]
107th CONGRESS
1st Session
H. R. 2599
To spur job growth by reducing individual capital gains rates and to
make permanent the Economic Growth and Tax Relief Act of 2001.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 23, 2001
Mr. Toomey introduced the following bill; which was referred to the
Committee on Ways and Means
_______________________________________________________________________
A BILL
To spur job growth by reducing individual capital gains rates and to
make permanent the Economic Growth and Tax Relief Act of 2001.
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 ``Tax Relief Improvement Act of
2001''.
SEC. 2. REDUCED CAPITAL GAINS RATE FOR INDIVIDUALS.
(a) In General.--Subsection (h) of section 1 of the Internal
Revenue Code of 1986 (relating to maximum capital gains rate) is
amended to read as follows:
``(h) Maximum Capital Gains Rate.--
``(1) In general.--If a taxpayer has a net capital gain for
any taxable year, the tax imposed by this section for such
taxable year shall not exceed the sum of--
``(A) a tax computed at the rates and in the same
manner as if this subsection had not been enacted on
taxable income reduced by the net capital gain,
``(B) 7.5 percent of so much of the taxpayer's net
capital gain (or, if less, taxable income) as does not
exceed the excess (if any) of--
``(i) the amount of taxable income which
would (without regard to this paragraph) be
taxed at a rate of 15 percent or less, over
``(ii) the amount on which tax is
determined under subparagraph (A), plus
``(C) 15 percent of the taxpayer's net capital gain
(or, if less, taxable income) in excess of the amount
of capital gain on which tax is determined under
subparagraph (B).
``(2) Net capital gain taken into account as investment
income.--For purposes of this subsection, the net capital gain
for any taxable year shall be reduced (but not below zero) by
the amount which the taxpayer elects to take into account as
investment income under section 163(d)(4)(B)(iii).''
(b) Minimum Tax.--
(1) In general.--Subparagraph (A) of section 55(b)(1) of
such Code is amended by redesignating clauses (ii) and (iii) as
clauses (iii) and (iv), respectively, and by inserting after
clause (i) the following new clause:
``(ii) Maximum rate of tax on net capital
gain.--The amount determined under the first
sentence of clause (i) shall not exceed the sum
of--
``(I) the amount determined under
such first sentence computed at the
rates and in the same manner as if this
clause had not been enacted on the
taxable excess reduced by the net
capital gain, plus
``(II) a tax of 15 percent of the
lesser of the net capital gain or the
taxable excess.''
(2) Conforming amendment.--Clause (iii) of section
55(a)(1)(A) of such Code (as redesignated by paragraph (1)) is
amended by striking ``clause (i)'' and inserting ``this
subparagraph''.
(c) Conforming Amendments.--
(1) Section 1202 of such Code (relating to 50-percent
exclusion for gain from certain small business stock) is hereby
repealed.
(2)(A) Subsection (a) of section 57 of such Code is amended
by striking paragraph (7).
(B) Subclause (II) of section 53(d)(1)(B)(ii) of such Code
is amended by striking ``, (5), and (7)'' and inserting ``and
(5)''.
(3) Paragraph (1) of section 170(e) of such Code is amended
by striking ``the amount of gain'' in the material following
subparagraph (B)(ii) and inserting ``50 percent (80 percent in
the case of a corporation) of the amount of gain''.
(4) Paragraph (2) of section 172(d) of such Code is amended
to read as follows:
``(2) Capital gains and losses of taxpayers other than
corporations.--In the case of a taxpayer other than a
corporation, the amount deductible on account of losses from sales or
exchanges of capital assets shall not exceed the amount includible on
account of gains from sales or exchanges of capital assets.''
(5) Paragraph (4) of section 642(c) of such Code is amended
by striking the first sentence.
(6) Paragraph (3) of section 643(a) of such Code is amended
by striking the last sentence.
(7) Paragraph (4) of section 691(c) of such Code is amended
by striking ``1202,''.
(8) The second sentence of section 871(a)(2) of such Code
is amended by striking ``such gains and losses shall be
determined without regard to section 1202 and''.
(9) Subsection (a) of section 1044 of such Code is amended
by striking the last sentence.
(10) Paragraph (1) of section 1445(e) of such Code is
amended by striking ``28 percent'' and inserting ``15
percent''.
(11) Section 6652 of such Code is amended by striking
subsection (k) and by redesignating subsections (l) and (m) as
subsections (k) and (l), respectively.
(12)(A) The second sentence of section 7518(g)(6)(A) of
such Code is amended by striking ``28 percent'' and inserting
``15 percent''.
(B) The second sentence of section 607(h)(6)(A) of the
Merchant Marine Act, 1936 is amended by striking ``28 percent''
and inserting ``15 percent''.
(13) The table of sections for part I of subchapter P of
chapter 1 of such Code is amended by striking the item relating
to section 1202.
(d) 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, 2001.
(2) Withholding.--The amendment made by subsection (c)(10)
shall apply to amounts paid after December 31, 2001.
SEC. 3. REPEAL OF SUNSETS OF ECONOMIC GROWTH AND TAX RELIEF
RECONCILIATION ACT OF 2001.
(a) In General.--Title IX of the Economic Growth and Tax Relief
Reconciliation Act of 2001 (Public Law 107-16) is hereby repealed.
(b) Deduction for Higher Education Expenses Made Permanent.--
(1) In general.--Section 222 of the Internal Revenue Code
of 1986 is amended by striking subsection (e).
(2) Conforming amendment.--Subparagraph (B) of section
222(b)(2) of such Code is amended--
(A) by striking ``or 2005'' and inserting ``or
thereafter'', and
(B) by striking ``and 2005'' in the heading and
inserting ``and thereafter''.
(c) Nonrefundable Credit to Certain Individuals for Elective
Deferrals and IRA Contributions Made Permanent.--Section 25B of such
Code is amended by striking subsection (g).
(d) Increase in Alternative Minimum Tax Exemption Made Permanent.--
(1) Subparagraph (A) of section 55(d)(1) of such Code
(relating to exemption amount for taxpayers other than
corporations) is amended by striking ``$45,000 ($49,000 in the
case of taxable years beginning in 2001, 2002, 2003, and
2004)'' and inserting ``$49,000''.
(2) Subparagraph (B) of section 55(d)(1) of such Code
(relating to exemption amount for taxpayers other than
corporations) is amended by striking ``$33,750 ($35,750 in the
case of taxable years beginning in 2001, 2002, 2003, and
2004)'' and inserting ``$35,750''.
(e) Effective Date.--The amendments made by this section shall take
effect as if included in the provisions of the Economic Growth and Tax
Relief Reconciliation Act of 2001 to which they relate.
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