[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3 Introduced in House (IH)]







107th CONGRESS
  1st Session
                                 H. R. 3

To amend the Internal Revenue Code of 1986 to reduce individual income 
                               tax rates.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           February 28, 2001

  Mr. Thomas introduced the following bill; which was referred to the 
                      Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to reduce individual income 
                               tax rates.

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

SECTION 1. SHORT TITLE; ETC.

    (a) Short Title.--This Act may be cited as the ``Economic Growth 
and Tax Relief Act of 2001''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this Act an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986.
    (c) Section 15 Not To Apply.--No amendment made by section 2 shall 
be treated as a change in a rate of tax for purposes of section 15 of 
the Internal Revenue Code of 1986.

SEC. 2. REDUCTION IN INCOME TAX RATES FOR INDIVIDUALS.

    (a) In General.--Section 1 is amended by adding at the end the 
following new subsection:
    ``(i) Rate Reductions After 2000.--
            ``(1) New lowest rate bracket.--
                    ``(A) In general.--In the case of taxable years 
                beginning after December 31, 2000--
                            ``(i) the rate of tax under subsections 
                        (a), (b), (c), and (d) on taxable income not 
                        over the initial bracket amount shall be 12 
                        percent (as modified by paragraph (2)), and
                            ``(ii) the 15 percent rate of tax shall 
                        apply only to taxable income over the initial 
                        bracket amount.
                    ``(B) Initial bracket amount.--For purposes of this 
                subsection, the initial bracket amount is--
                            ``(i) $12,000 in the case of subsection 
                        (a),
                            ``(ii) $10,000 in the case of subsection 
                        (b), and
                            ``(iii) \1/2\ the amount applicable under 
                        clause (i) in the case of subsections (c) and 
                        (d).
                    ``(C) Inflation adjustment.--In prescribing the 
                tables under subsection (f) which apply with respect to 
                taxable years beginning in calendar years after 2001--
                            ``(i) the Secretary shall make no 
                        adjustment to the initial bracket amount for 
                        any taxable year beginning before January 1, 
                        2007,
                            ``(ii) the cost-of-living adjustment used 
                        in making adjustments to the initial bracket 
                        amount for any taxable year beginning after 
                        December 31, 2006, shall be determined under 
                        subsection (f)(3) by substituting `2005' for 
                        `1992' in subparagraph (B) thereof, and
                            ``(iii) such adjustment shall not apply to 
                        the amount referred to in subparagraph 
                        (B)(iii).
                If any amount after adjustment under the preceding 
                sentence is not a multiple of $50, such amount shall be 
                rounded to the next lowest multiple of $50.
            ``(2) Reductions in rates after 2001.--In the case of 
        taxable years beginning in a calendar year after 2001, the 
        corresponding percentage specified for such calendar year in 
        the following table shall be substituted for the otherwise 
        applicable tax rate in the tables under subsections (a), (b), 
        (c), (d), and, to the extent applicable, (e).


------------------------------------------------------------------------
                                  The corresponding percentages shall be
                                       substituted for the following
 ``In the case of taxable years                percentages:
 beginning during calendar year: ---------------------------------------
                                    12%     28%     31%     36%    39.6%
------------------------------------------------------------------------
2002............................    12%     27%     30%     35%     38%
2003............................    11%     27%     29%     35%     37%
2004............................    11%     26%     28%     34%     36%
2005............................    11%     26%     27%     34%     35%
2006 and thereafter.............    10%     25%     25%     33%     33%
------------------------------------------------------------------------

            ``(3) Adjustment of tables.--The Secretary shall adjust the 
        tables prescribed under subsection (f) to carry out this 
        subsection.''
    (b) Repeal of Reduction of Refundable Tax Credits.--
            (1) Subsection (d) of section 24 is amended by striking 
        paragraph (2) and redesignating paragraph (3) as paragraph (2).
            (2) Section 32 is amended by striking subsection (h).
    (c) Conforming Amendments.--
            (1) Subparagraph (B) of section 1(g)(7) is amended--
                    (A) by striking ``15 percent'' in clause (ii)(II) 
                and inserting ``the first bracket percentage'', and
                    (B) by adding at the end the following flush 
                sentence:
                ``For purposes of clause (ii), the first bracket 
                percentage is the percentage applicable to the lowest 
                income bracket in the table under subsection (c).''
            (2) Section 1(h) is amended--
                    (A) by striking ``28 percent'' both places it 
                appears in paragraphs (1)(A)(ii)(I) and (1)(B)(i) and 
                inserting ``25 percent'', and
                    (B) by striking paragraph (13).
            (3) Section 15 is amended by adding at the end the 
        following new subsection:
    ``(f) Rate Reductions Enacted by Economic Growth and Tax Relief Act 
of 2001.--This section shall not apply to any change in rates under 
subsection (i) of section 1 (relating to rate reductions after 2000).''
            (4) Section 531 is amended by striking ``equal to'' and all 
        that follows and inserting ``equal to the product of the 
        highest rate of tax under section 1(c) and the accumulated 
        taxable income.''.
            (5) Section 541 of such Code is amended by striking ``equal 
        to'' and all that follows and inserting ``equal to the product 
        of the highest rate of tax under section 1(c) and the 
        undistributed personal holding company income.''.
            (6) Section 3402(p)(1)(B) is amended by striking ``7, 15, 
        28, or 31 percent'' and inserting ``7 percent, any percentage 
        applicable to any of the 3 lowest income brackets in the table 
        under section 1(c),''.
            (7) Section 3402(p)(2) is amended by striking ``equal to 15 
        percent of such payment'' and inserting ``equal to the product 
        of the lowest rate of tax under section 1(c) and such 
        payment.''.
            (8) Section 3402(q)(1) is amended by striking ``equal to 28 
        percent of such payment'' and inserting ``equal to the product 
        of the third to the lowest rate of tax under section 1(c) and 
        such payment.''
            (9) Section 3402(r)(3) is amended by striking ``31 
        percent'' and inserting ``the third to the lowest rate of tax 
        under section 1(c)''.
            (10) Section 3406(a)(1) is amended by striking ``equal to 
        31 percent of such payment'' and inserting ``equal to the 
        product of the third to the lowest rate of tax under section 
        1(c) and such payment.''.
    (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, 2000.
            (2) Amendments to withholding provisions.--The amendments 
        made by paragraphs (6), (7), (8), (9), and (10) of subsection 
        (c) shall apply to amounts paid after the date of the enactment 
        of this Act.
                                 <all>