[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 551 Introduced in Senate (IS)]
107th CONGRESS
1st Session
S. 551
To amend the Internal Revenue Code of 1986 to simplify the individual
income tax by providing an election for eligible individuals to only be
subject to a 15 percent tax on wage income with a tax return free
filing system, to reduce the burdens of the marriage penalty and
alternative minimum tax, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
March 15, 2001
Mr. Dorgan (for himself, Mr. Gregg, and Mr. Durbin) 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 simplify the individual
income tax by providing an election for eligible individuals to only be
subject to a 15 percent tax on wage income with a tax return free
filing system, to reduce the burdens of the marriage penalty and
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. SHORT TITLE; AMENDMENT OF 1986 CODE.
(a) Short Title.--This Act may be cited as the ``Fair and Simple
Shortcut Tax Plan''.
(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.
TITLE I--FAIR AND SIMPLE SHORTCUT TAX PLAN
SEC. 101. FAIR AND SIMPLE SHORTCUT TAX PLAN.
(a) In General.--Subchapter A of chapter 1 (relating to
determination of tax liability) is amended by adding at the end the
following:
``PART VIII--FAIR AND SIMPLE SHORTCUT TAX PLAN
``Sec. 60. Tax on individuals electing
FASST.
``Sec. 60A. Computation of applicable
taxable income.
``Sec. 60B. Credit against tax.
``Sec. 60C. Election.
``Sec. 60D. Liability for tax.
``SEC. 60. TAX ON INDIVIDUALS ELECTING FASST.
``(a) Tax Imposed.--If an individual who is an eligible taxpayer
has an election in effect under this part for a taxable year, there is
hereby imposed a tax equal to 15 percent of the taxpayer's applicable
taxable income.
``(b) Coordination With Other Taxes.--The tax imposed by this
section shall be in lieu of any other tax imposed by this subchapter.
The preceding sentence shall not apply to taxes described in section
26(b)(2) other than subparagraph (A) thereof.
``SEC. 60A. COMPUTATION OF APPLICABLE TAXABLE INCOME.
``(a) In General.--For purposes of this part, the term `applicable
taxable income' means the taxpayer's applicable wage income, minus--
``(1) the standard deduction,
``(2) the deductions for personal exemptions provided in
section 151, and
``(3) the homeowner expense deduction allowable under
subsection (c).
``(b) Applicable Wage Income.--For purposes of this part--
``(1) In general.--The term `applicable wage income' means,
with respect to an individual, wages received by such
individual for the taxable year for services performed as an
employee of an employer.
``(2) Employment.--The term `employment' has the meaning
given such term in section 3121(b).
``(3) Wages.--The term `wages' has the meaning given such
term in section 3401(a).
``(c) Homeowner Expense Deduction Allowed.--
``(1) In general.--For purposes of subsection (a), there
shall be allowed as a deduction for the taxable year an amount
equal to the product of--
``(A) $5,000, and
``(B) a fraction, the numerator of which is the
number of months in such year in which the taxpayer
owned and used property as the taxpayer's principal
residence (within the meaning of section 121) and the
denominator of which is 12.
``(2) Special rules.--For purposes of this subsection--
``(A) Married individuals.--In the case of a
married individual, the ownership and use requirements
of paragraph (1) shall be treated as met for any month
if either spouse meets them.
``(B) Divorce; cooperative housing.--Rules similar
to the rules of paragraphs (3) and (4) of section
121(d) shall apply.
``(C) Out-of-residence care.--If a taxpayer becomes
physically or mentally impaired while owning and using
property as a principal residence, then the taxpayer
shall be treated as meeting the ownership and use
requirements of paragraph (1) during any period the
taxpayer owns the property and resides in any facility
(including a nursing home) licensed by a State or
political subdivision to care for an individual in the
taxpayer's condition.
``SEC. 60B. CREDITS AGAINST TAX.
``No credit shall be allowed against the tax imposed by this part
other than--
``(1) the credit allowable under section 24 (relating to
child tax credit),
``(2) the credit allowable under section 32 (relating to
earned income credit), and
``(3) the credit for overpayment of tax under section 6402.
``SEC. 60C. ELECTION.
``(a) Election.--An eligible taxpayer may elect to have this part
apply for any taxable year.
``(b) Eligible Taxpayer.--
``(1) In general.--For purposes of this part, the term
`eligible taxpayer' means, with respect to any taxable year, a
taxpayer who receives--
``(A) applicable wage income in an amount not in
excess of--
``(i) $100,000, in the case of a taxpayer
described in section 1(a), and
``(ii) 50 percent of the amount in effect
under clause (i) for the taxable year, in the
case of any other taxpayer, and
``(B) gross income (determined without regard to
applicable wage income) in an amount not in excess of--
``(i) $5,000, in the case of a taxpayer
described in section 1(a), and
``(ii) 50 percent of the amount in effect
under clause (i) for the taxable year, in the
case of any other taxpayer.
``(2) Exclusions.--The term `eligible taxpayer' shall not
include--
``(A) a married individual unless the individual
and the spouse both have the same taxable year and both
make the election,
``(B) a nonresident alien individual, or
``(C) an estate or trust.
``(3) Inflation adjustments.--In the case of a taxable year
beginning after 2002, each dollar amount under paragraph (1)
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, determined by substituting
`calendar year 2001' for `calendar year 1992' in
subparagraph (B) thereof.
``(c) Form of Election.--
``(1) In general.--An individual shall make an election to
have this part apply for any taxable year by furnishing an
election certificate to such individual's employer not later
than the close of the first payroll period after the individual
commences work for such employer or January 1 of the taxable
year to which such election relates, whichever is later.
``(2) Contents of certificate.--The election certificate
furnished under paragraph (1) shall--
``(A) contain such information as the Secretary
requires to enable the Secretary to carry out this part
and enable the employer to withhold the appropriate
amount of wages under section 3402, and
``(B) contain a certification by the employee under
penalty of perjury that the information furnished is
correct.
``(3) Amendment of certificate.--A new election certificate
shall be filed within 30 days after the date of any change in
the information required under paragraph (2).
``(4) Election certificate.--For purposes of this section,
the term `election certificate' means the withholding exemption
certificate used for purposes of chapter 24.
``(5) Advance payment of earned income amount.--The
Secretary shall prescribe such regulations as may be necessary
to allow an eligible taxpayer to treat an election certificate
furnished under this section as including an earned income
eligibility certificate under section 3507 in the case of an
eligible individual claiming the earned income credit under
section 32.
``(d) Period Election In Effect.--
``(1) In general.--Except as provided in paragraph (2), an
election under this section shall be effective for the taxable
year for which it is made and all subsequent taxable years.
``(2) Termination.--An election under this part shall
terminate with respect to an individual for any taxable year
and all subsequent taxable years if at any time during such
taxable year such individual--
``(A) is no longer an eligible taxpayer,
``(B) elects to terminate such individual's
election, or
``(C) commits fraud with respect to any information
required to be provided under this section.
``(e) Safe Harbor for Ineligibility.--In the case of an individual
who has a termination under subsection (c)(2)(A), no addition to tax
under section 6654 shall apply to any underpayment attributable to
eligible wage income of such individual for such taxable year if such
underpayment was not due to fraud, negligence, or disregard of rules or
regulations (within the meaning of section 6662).
``(f) Marital Status.--For purposes of this part, marital status
shall be determined under section 7703.
``SEC. 60D. LIABILITY FOR TAX.
``(a) Amount Withheld Treated as Satisfaction of Liability.--Except
as provided in this section, any amount withheld as tax under section
3402(t) for an eligible individual with an election in effect under
section 60C for the taxable year shall be treated as complete
satisfaction of liability for the tax imposed by section 60(a) for such
taxable year.
``(b) Exceptions.--Notwithstanding subsection (a)--
``(1) Overpayment.--If the amount withheld as tax under
section 3402(t) for an eligible taxpayer with an election in
effect under section 60C for the taxable year exceeds the tax
imposed under section 60(a) for the taxable year, the excess
amount shall be treated as an overpayment for purposes of
section 6402.
``(2) Underpayment.--
``(A) In general.--If the Secretary determines that
the amount withheld as tax under section 3402(t) for an
eligible taxpayer is less than the tax imposed under
section 60(a) and such underpayment is not due to
fraud, the Secretary may assess and collect such
underpayment in the same manner as if such underpayment
were on account of a mathematical or clerical error
appearing on a return of the individual for the taxable
year.
``(B) De minimis exception.--If the amount by which
the tax imposed by section 60(a) exceeds the amount
withheld as tax under section 3402(t) by less than the
lesser of $100 or 10 percent of the tax so imposed, the
taxpayer shall be treated as having no underpayment.
``(c) Regulations.--The Secretary shall prescribe such regulations
as may be necessary to carry out the provisions of this section,
including regulations--
``(1) to allow a refund of an overpayment under subsection
(b)(1) to a taxpayer without requiring additional filing of
information by the taxpayer, and
``(2) to notify taxpayers of eligibility for credits
allowable under section 60B and allow a claim and refund of any
credit not claimed by an eligible taxpayer during the taxable
year.''.
(b) Withholding From Wages.--Section 3402 (relating to income tax
collected at source) is amended by adding at the end the following new
subsection:
``(t) Withholding Under the Fair and Simple Shortcut Tax Plan.--
``(1) In general.--An employer making payment of wages to
an individual with an election in effect under section 60C
shall deduct and withhold upon such wages a tax (in lieu of the
tax required to be deducted and withheld under subsection (a))
determined in accordance with tables prescribed by the
Secretary in accordance with paragraph (2).
``(2) Withholding tables.--The Secretary shall prescribe 1
or more tables which set forth amounts of wages and income tax
to be deducted and withheld based on information furnished to
the employer in the employee's election form and to ensure that
the aggregate amount withheld from such employee's wages
approximates the tax liability of such individual for the
taxable year. Any tables prescribed under this paragraph
shall--
``(A) apply with respect to the amount of wages
paid during such periods as the Secretary may
prescribe, and
``(B) be in such form, and provide for such amounts
to be deducted and withheld, as the Secretary
determines to be most appropriate to carry out the
purposes of this chapter and to reflect the provisions
of chapter 1 applicable to such periods, including
taking into account any credits allowable under section
24 or 32.
The Secretary shall provide that any other provision of this
section shall not apply to the extent such provision is
inconsistent with the provisions of this subsection.
``(2) Election certificate.--
``(A) In general.--In lieu of a withholding
exemption certificate, an employee shall furnish the
employer with a signed election certificate and any
amended election certificate at such time and
containing such information as required under section
60C.
``(B) When certificate takes effect.--
``(i) First certificate furnished.--An
election certificate furnished to an employer
in cases in which no previous such certificate
is in effect shall take effect as of the
beginning of the first payroll period ending,
or the first payment of wages made without
regard to a payroll period, on or after the
date on which such certificate is so furnished.
``(ii) Replacement certificate.--An
election certificate furnished to an employer
which replaces an earlier certificate shall
take effect as of the beginning of the 1st
payroll period ending (or the 1st payment of
wages made without regard to a payroll period)
on or after the 30th day after the on date
which the replacement certificate is so
furnished.''.
(c) Waiver of Requirement to File Return of Income.--Subsection
(a)(1)(A) of section 6012 (relating to persons required to make return
of income) is amended by striking ``or'' at the end of clause (iii), by
striking the period at the end of clause (iv) and inserting ``, or'',
and by inserting after clause (iv) the following new clause:
``(v) who is an eligible taxpayer with an
election in effect for the taxable year under
section 60C.''.
(d) Technical and Conforming Amendments.--
(1) The table of parts for subchapter A of chapter 1 is
amended by adding at the end the following new item:
``Part VIII. Fair and Simple Shortcut Tax Plan.''.
(2) Section 6654(a) is amended by inserting ``and section
60C(d)'' after ``this section''.
(e) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2001.
SEC. 102. TAX CREDIT FOR EMPLOYER FASST PLAN STARTUP COSTS.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1
(relating to business related credits) is amended by adding at the end
the following new section:
``SEC. 45E. FASST PLAN EMPLOYER START-UP CREDIT.
``(a) Credit Allowed.--
``(1) In general.--For purposes of section 38, the Fair and
Simple Shortcut Tax plan start-up credit determined under this
section for the taxable year is an amount equal to the lesser
of--
``(A) 50 percent of eligible start-up costs of the
taxpayer for the taxable year, or
``(B) $1,000.
``(2) Maximum credit.--The maximum credit allowed with
respect to a taxpayer under this subsection for all taxable
years shall not exceed the amount determined under paragraph
(1) for all taxable years.
``(b) Eligible Start-Up Costs.--For purposes of this section, the
term `eligible start-up costs' means amounts paid or incurred by an
employer (or any predecessor) during the 1 year period beginning on the
date on which the employer first employs 1 or more employees with an
election in effect under section 60C for the taxable year, in
connection with carrying out the withholding requirements of section
3402.
``(c) Credit Available for Each Worksite.--If a taxpayer maintains
a separate worksite for employees, such person shall be treated as a
single employer with respect to such worksite for purposes of the
credit allowable under subsection (a).''.
(b) Conforming Amendments.--
(1) Section 38(b) is amended--
(A) by striking ``plus'' at the end of paragraph
(12),
(B) by striking the period at the end of paragraph
(13), and inserting a comma and ``plus'', and
(C) by adding at the end the following new
paragraph:
``(14) the Fair and Simple Shortcut Tax plan start-up
credit determined under section 45E.''.
(2) The table of sections for subpart D of part IV of
subchapter A of chapter 1 is amended by adding at the end the
following new item:
``Sec. 45E. Fair and Simple Shortcut Tax
plan start-up credit.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2001.
TITLE II--PROVISIONS TO SIMPLIFY THE TAX CODE
SEC. 201. REDUCTION IN MARRIAGE PENALTY IN STANDARD DEDUCTION.
(a) In General.--Section 63(c)(2) (relating to basic standard
deduction) is amended to read as follows:
``(2) Basic standard deduction.--For purposes of paragraph
(1), the basic standard deduction is--
``(A) 200 percent of the amount under subparagraph
(C) for the taxable year, in the case of a joint return
or a surviving spouse (as defined in section 2(a)),
``(B) 150 percent of such amount, in the case of a
head of household (as defined in section 2(b)), and
``(C) $3,000, in the case of an individual who is
not married and who is not a surviving spouse or head
of household or a married individual filing a separate
return.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2001.
SEC. 202. ALTERNATIVE MINIMUM TAX EXCLUSION OF SELF-EMPLOYMENT INCOME
AND CERTAIN ITEMS OF PREFERENCE AND ADJUSTMENTS.
(a) Increased Exemption for Self-Employment Income.--Section
55(d)(1) (relating to exemption amount for taxpayers other than
corporations) is amended to read as follows:
``(1) Exemption amount for taxpayers other than
corporations.--In the case of a taxpayer other than a
corporation, the term `exemption amount' means the sum of--
``(A) an amount equal to--
``(i) $45,000 in the case of--
``(I) a joint return, or
``(II) a surviving spouse,
``(ii) $33,750 in the case of an individual
who--
``(I) is not a married individual,
or
``(II) is not a surviving spouse,
and
``(iii) $22,500 in the case of--
``(I) a married individual who
files a separate return, or
``(II) an estate or trust, and
``(B) an amount equal to the lesser of--
``(i) the self employment income (as
defined in section 1402(b)) of the taxpayer for
the taxable year, or
``(ii) $1,000,000.
For purposes of this paragraph, the term `surviving spouse' has
the meaning given to such term by section 2(a), and marital
status shall be determined under section 7703.''.
(b) Exclusion of Certain Items of Preference and Adjustments.--
Section 55 (relating to alternative minimum tax imposed) is amended by
adding at the end the following new subsection:
``(f) Special Rule for Small Businesses.--
``(1) In general.--For purposes of this part, in computing
the alternative minimum taxable income of a taxpayer to which
this subsection applies for any taxable year--
``(A) no adjustments provided in section 56 which
are attributable to a trade or business of the taxpayer
shall be made, and
``(B) taxable income shall not be increased by any
item of tax preference described in section 57 which is
so attributable.
``(2) Application.--
``(A) In general.--This subsection shall apply to a
taxpayer for a taxable year if the taxpayer is not a
corporation and the gross receipts of the taxpayer for
the taxable year from all trades or businesses do not
exceed $1,000,000.
``(B) Special rules.--Rules similar to the rules of
paragraphs (2), (3)(B), and (3)(C) of section 448(c)
shall apply for purposes of this subsection.''.
(c) Conforming Amendments.--Section 55(d)(3) is amended--
(1) by striking ``paragraph (1)(A)'' and inserting
``paragraph (1)(A)(i)'' in subparagraph (A),
(2) by striking ``paragraph (1)(B)'' and inserting
``paragraph (1)(A)(ii)'' in subparagraph (B),
(3) by striking ``paragraph (1)(C)'' and inserting
``paragraph (1)(A)(iii)'' in subparagraph (C), and
(4) by striking ``paragraph (1)(C)(i)'' and inserting
``paragraph (1)(A)(iii)(I)'' in the second sentence.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2001.
SEC. 203. NONREFUNDABLE TAX CREDIT FOR TAX PREPARATION EXPENSES.
(a) In General.--Subpart A of part IV of subchapter A of chapter 1
(relating to nonrefundable personal credits) is amended by adding at
the end the following new section:
``SEC. 25B. TAX PREPARATION EXPENSES.
``(a) Allowance of Credit.--In the case of an individual, there
shall be allowed as a credit against the tax imposed by this chapter
for the taxable year an amount equal to the lesser of--
``(1) 50 percent of the qualified tax preparation expenses
of the taxpayer for the taxable year, or
``(2) $100.
``(b) Qualified Tax Preparation Expenses.--For purposes of this
section, the term `qualified tax preparation expenses' means expenses
paid or incurred during the taxable year by an individual in connection
with the preparation of the taxpayer's Federal income tax return for
such taxable year, but only if such return is electronically filed.
Such term shall include any expenses related to an income tax return
preparer.
``(c) Denial of Deduction.--No deduction shall be allowed under
this chapter for any amount taken into account in determining the
credit under this section.''.
(b) Conforming Amendment.--The table of sections for subpart A of
part IV of subchapter A of chapter 1 is amended by adding at the end
the following new item:
``Sec. 25B. Tax preparation expenses.''.
(c) Effective Date.--The amendments made by this section shall
apply to expenses paid or incurred for taxable years beginning after
December 31, 2001.
SEC. 204. EXEMPTION OF CERTAIN INTEREST AND DIVIDEND INCOME FROM TAX.
(a) In General.--Part III of subchapter B of chapter 1 (relating to
amounts specifically excluded from gross income) is amended by
inserting after section 115 the following new section:
``SEC. 116. PARTIAL EXCLUSION OF DIVIDENDS AND INTEREST RECEIVED BY
INDIVIDUALS.
``(a) Exclusion From Gross Income.--In the case of an individual
who does not have an election in effect under section 60C for the
taxable year, gross income does not include dividends and interest
otherwise includible in gross income which are received during the
taxable year by such individual.
``(b) Limitation.--The aggregate amount excluded under subsection
(a) for any taxable year shall not exceed $500 ($1,000 in the case of a
joint return).
``(c) Certain Dividends Excluded.--Subsection (a) shall not apply
to any dividend from a corporation which, for the taxable year of the
corporation in which the distribution is made, or for the next
preceding taxable year of the corporation, is a corporation exempt from
tax under section 501 (relating to certain charitable, etc.,
organization) or section 521 (relating to farmers' cooperative
associations).
``(d) Special Rules.--For purposes of this section--
``(1) Treatment of certain dividends.--
``For treatment of dividends received
from regulated investment companies and real estate investment trusts,
see sections 854(a), 854(b), and 857(c).
``(2) Certain nonresident aliens ineligible for
exclusion.--In the case of a nonresident alien individual,
subsection (a) shall apply only--
``(A) in determining the tax imposed for the
taxable year under section 871(b)(1) and only in
respect of dividends which are effectively connected
with the conduct of a trade or business within the
United States, or
``(B) in determining the tax imposed for the
taxable year under section 877(b).
``(3) Dividends from employee stock ownership plans.--
Subsection (a) shall not apply to any dividend described in
section 404(k).''.
(b) Conforming Amendments.--
(1) Subparagraph (C) of section 32(c)(5) is amended by
striking ``or'' at the end of clause (i), by striking the
period at the end of clause (ii) and inserting ``; or'', and by
inserting after clause (ii) the following new clause:
``(iii) interest and dividends received
during the taxable year which are excluded from
gross income under section 116.''.
(2) Subparagraph (A) of section 32(i)(2) is amended by
inserting ``(determined without regard to section 116)'' before
the comma.
(3) Subparagraph (B) of section 86(b)(2) is amended to read
as follows:
``(B) increased by the sum of--
``(i) the amount of interest received or
accrued by the taxpayer during the taxable year
which is exempt from tax, and
``(ii) the amount of interest and dividends
received during the taxable year which are
excluded from gross income under section
116.''.
(4) Subsection (d) of section 135 is amended by
redesignating paragraph (4) as paragraph (5) and by inserting
after paragraph (3) the following new paragraph:
``(4) Coordination with section 116.--This section shall be
applied before section 116.''.
(5)(A) Subsection (a) of section 246A is amended--
(i) by inserting ``or the exclusion from gross
income under section 116,'' after ``245(a)'' in the
matter preceding paragraph (1), and
(ii) by inserting ``received by a corporation''
after ``dividend'' in paragraph (1).
(B) Subsection (e) of section 246A is amended by inserting
``or the exclusion from gross income under section 116'' after
``245''.
(6) Paragraph (2) of section 265(a) is amended by inserting
before the period ``, or to purchase or carry obligations or
shares, or to make deposits, to the extent the interest thereon
is excludable from gross income under section 116''.
(7) Subsection (c) of section 584 is amended by adding at
the end the following new flush sentence:
``The proportionate share of each participant in the amount of
dividends or interest received by the common trust fund and to which
section 116 applies shall be considered for purposes of such section as
having been received by such participant.''.
(8) Subsection (a) of section 643 is amended by
redesignating paragraph (7) as paragraph (8) and by inserting
after paragraph (6) the following new paragraph:
``(7) Dividends or interest.--There shall be included the
amount of any dividends or interest excluded from gross income
under section 116.''.
(9)(A) Subsection (a) of section 854 is amended by
inserting ``section 116 (relating to partial exclusion of
dividends and interest received by individuals) and'' after
``For purposes of''.
(B) Paragraph (1) of section 854(b) is amended--
(i) by striking ``subparagraph (A)'' in
subparagraph (B) and inserting ``subparagraphs (A) and
(B)'',
(ii) by redesignating subparagraph (B) as
subparagraph (C), and
(iii) by inserting after subparagraph (A) the
following new subparagraph:
``(B) Exclusion under section 116.--If the
aggregate dividends and interest received by a
regulated investment company during any taxable year
are less than 95 percent of its gross income, then, in
computing the exclusion under section 116, rules
similar to the rules of subparagraph (A) shall
apply.''.
(C) Paragraph (2) of section 854(b) is amended by inserting
``the exclusion under section 116 and'' after ``for purposes
of''.
(10) Subsection (c) of section 857 is amended to read as
follows:
``(c) Restrictions Applicable to Dividends Received From Real
Estate Investment Trusts.--For purposes of section 116 (relating to
partial exclusion of dividends and interest received by individuals)
and section 243 (relating to deductions for dividends received by
corporations), a dividend received from a real estate investment trust
which meets the requirements of this part shall not be considered as a
dividend.''.
(11) The table of sections for part III of subchapter B of
chapter 1 is amended by inserting after the item relating to
section 115 the following new item:
``Sec. 116. Partial exclusion of
dividends and interest received
by individuals.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2001.
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