[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 942 Introduced in House (IH)]







107th CONGRESS
  1st Session
                                H. R. 942

To amend the Internal Revenue Code of 1986 to reduce individual income 
             tax rates and increase the standard deduction.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 8, 2001

 Mr. Collins 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 and increase the standard deduction.

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

SECTION 1. SHORT TITLE.

    (a) Short Title.--This Act may be cited as the ``Individual Income 
Tax Rate Reduction 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 this Act shall 
be treated as a change in a rate of tax for purposes of section 15 of 
such Code.

SEC. 2. REDUCTION IN INDIVIDUAL INCOME TAX RATES.

    (a) Rates for 2001.--Section 1 (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 every 
married individual (as defined in section 7703) who makes a single 
return jointly with his spouse under section 6013, and 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 $45,200...............
                                        12% of taxable income.
    Over $45,200 but not over 
        $109,250.
                                        $5,424, plus 25% of the excess 
                                                over $45,200
    Over $109,250 but not over 
        $166,500.
                                        $21,436.50, plus 28% of the 
                                                excess over $109,250
    Over $166,500 but not over 
        $297,350.
                                        $37,466.50, plus 35.5% of the 
                                                excess over $166,500
    Over $297,350..................
                                        $83,918.25, plus 38.2% of the 
                                                excess over $297,350
    ``(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 $36,250...............
                                        12% of taxable income.
    Over $36,250 but not over 
        $93,650.
                                        $4,350, plus 25% of the excess 
                                                over $36,250
    Over $93,650 but not over 
        $151,650.
                                        $18,700, plus 28% of the excess 
                                                over $93,650
    Over $151,650 but not over 
        $297,350.
                                        $34,940, plus 35.5% of the 
                                                excess over $151,650
    Over $297,350..................
                                        $86,663.50, plus 38.2% of the 
                                                excess over $297,350
    ``(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 surviving spouse as defined in section 2(a) or 
the head of a household as defined in section 2(b)) who is not a 
married individual (as defined in section 7703) a tax determined in 
accordance with the following table:

``If taxable income is:             The tax is:
    Not over $27,050...............
                                        12% of taxable income.
    Over $27,050 but not over 
        $65,550.
                                        $3,246, plus 25% of the excess 
                                                over $27,050
    Over $65,550 but not over 
        $136,750.
                                        $12,871, plus 28% of the excess 
                                                over $65,550
    Over $136,750 but not over 
        $297,350.
                                        $32,807, plus 35.5% of the 
                                                excess over $136,750
    Over $297,350..................
                                        $89,820, plus 38.2% of the 
                                                excess over $297,350
    ``(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 $22,600...............
                                        12% of taxable income.
    Over $22,600 but not over 
        $54,625.
                                        $2,712, plus 25% of the excess 
                                                over $22,600
    Over $54,625 but not over 
        $83,250.
                                        $10,718.25, plus 28% of the 
                                                excess over $54,625
    Over $83,250 but not over 
        $148,675.
                                        $18,733.25, plus 35.5% of the 
                                                excess over $83,250
    Over $148,675..................
                                        $41,959.12, plus 38.2% of the 
                                                excess over $148,675
    ``(e) Estates and Trusts.--There is hereby imposed on the taxable 
income of every estate, and every trust, taxable under this subsection 
a tax determined in accordance with the following table:

``If taxable income is:             The tax is:
    Not over $1,800................
                                        12% of taxable income.
    Over $1,800 but not over $4,250
                                        $216, plus 25% of the excess 
                                                over $1,800
    Over $4,250 but not over $6,500
                                        $828.50, plus 28% of the excess 
                                                over $4,250
    Over $6,500 but not over $8,900
                                        $1,458.50, plus 35.5% of the 
                                                excess over $6,500
    Over $8,900....................
                                        $2,310.50, plus 38.2% of the 
                                                excess over $8,900''
    (b) Rate Reductions After 2001.--Section 1 is amended by adding at 
the end the following new subsection:
    ``(i) Rate Reductions After 2001.--
            ``(1) In general.--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.


------------------------------------------------------------------------
                                                    The corresponding
                                                  percentages shall  be
In the case of taxable years  beginning during     substituted for the
                calendar year:                   following percentages:
                                               -------------------------
                                                   35.5%        38.2%
------------------------------------------------------------------------
2002..........................................     35.0%        37.0%
2003..........................................     34.5%        35.8%
2004..........................................     34.0%        34.6%
2005..........................................     33.5%        33.5%
2006 and thereafter...........................     33.0%        33.0%
------------------------------------------------------------------------

            ``(2) Adjustment of tables.--The Secretary shall adjust the 
        tables prescribed under subsection (f) to carry out the 
        reductions under this subsection.''
    (c) Inflation Adjustment To Apply After 2001.--Subsection (f) of 
section 1 is amended--
            (1) by striking ``1993'' in paragraph (1) and inserting 
        ``2001'', and
            (2) by striking ``1992'' in paragraph (3)(B) and inserting 
        ``2000''.
    (d) Conforming Amendments.--
            (1) The following provisions are each amended by striking 
        ``1992'' and inserting ``2000'' each place it appears:
                    (A) Section 32(j)(1)(B).
                    (B) Section 41(e)(5)(C).
                    (C) Section 42(h)(3)(H)(i)(II).
                    (D) Section 59(j)(2)(B).
                    (E) Section 63(c)(4)(B).
                    (F) Section 68(b)(2)(B).
                    (G) Section 132(f)(6)(A)(ii).
                    (H) Section 135(b)(2)(B)(ii).
                    (I) Section 146(d)(2)(B).
                    (J) Section 151(d)(4).
                    (K) Section 220(g)(2).
                    (L) Section 221(g)(1)(B).
                    (M) Section 512(d)(2)(B).
                    (N) Section 513(h)(2)(C)(ii).
                    (O) Section 685(c)(3)(B).
                    (P) Section 877(a)(2).
                    (Q) Section 911(b)(2)(D)(ii)(II).
                    (R) Section 2032A(a)(3)(B).
                    (S) Section 2503(b)(2)(B).
                    (T) Section 2631(c)(2).
                    (U) Section 4001(e)(1)(B).
                    (V) Section 4261(e)(4)(A)(ii).
                    (W) Section 6039F(d).
                    (X) Section 6323(i)(4)(B).
                    (Y) Section 6334(g)(1)(B).
                    (Z) Section 6601(j)(3)(B).
                    (AA) Section 7430(c)(1).
            (2) Sections 25A(h)(1)(A)(ii) and 25A(h)(2)(A)(ii) are each 
        amended by striking ``begins,'' and all that follows through 
        ``thereof''.
            (3) Subclause (II) of section 42(h)(6)(G)(i) is amended by 
        striking ``1987'' and inserting ``2000''.
    (e) Additional 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 Individual Income Tax Rate 
Reduction 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''.
            (11) Section 13273 of the Revenue Reconciliation Act of 
        1993 is amended by striking ``28 percent'' and inserting ``the 
        third to the lowest rate of tax under section 1(c) of the 
        Internal Revenue Code of 1986''.
    (f) 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), (10), and (11) of 
        subsection (e) shall apply to amounts paid after the date of 
        the enactment of this Act.

SEC. 3. INCREASE IN STANDARD DEDUCTION.

    (a) In General.--Paragraph (2) of section 63(c) (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) twice the dollar amount in effect under 
                subparagraph (C) for the taxable year in the case of--
                            ``(i) a joint return, or
                            ``(ii) a surviving spouse (as defined in 
                        section 2(a)),
                    ``(B) $8,500 in the case of a head of household (as 
                defined in section 2(b)), or
                    ``(C) $6,000 in any other case.''
    (c) Technical Amendments.--
            (1) Paragraph (4) of section 63(c) is amended to read as 
        follows:
            ``(4) Adjustments for inflation.--
                    ``(A) In general.--In the case of any taxable year 
                beginning in a calendar year after 1988, each dollar 
                amount contained in paragraph (2) or (5) or subsection 
                (f) 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 the 
                        calendar year in which the taxable year begins.
                The preceding sentence shall not apply to the amount 
                referred to in paragraph (2)(A).
                    ``(B) Base period adjustments.--In determining the 
                adjustment under subparagraph (A), section 1(f)(3) 
                shall be applied by substituting for `calendar year 
                1992' in subparagraph (B) thereof--
                            ``(i) `calendar year 1987' in the case of 
                        the dollar amount contained in paragraph (5)(A) 
                        or subsection (f),
                            ``(ii) `calendar year 1997' in the case of 
                        the dollar amount contained in paragraph 
                        (5)(B)'', and
                            ``(iii) `calendar year 2000' in the case of 
                        the dollar amounts contained in paragraph 
                        (2).''
            (2) Subparagraph (B) of section 1(f)(6) 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)''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2000.
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