[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 311 Introduced in House (IH)]







108th CONGRESS
  1st Session
                                H. R. 311

  To amend the Internal Revenue Code of 1986 to provide a 10 percent 
               maximum capital gains tax for individuals.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 8, 2003

 Mr. Pence (for himself, Mr. Toomey, Mrs. Myrick, Mrs. Jo Ann Davis of 
Virginia, Mr. Goode, Mr. Pitts, Mr. King of Iowa, Mr. Chocola, Mr. Ryun 
 of Kansas, Mr. Tancredo, Mr. Akin, Mr. Wilson of South Carolina, Mr. 
   Pearce, Mr. Hostettler, Mr. Hoekstra, Mr. Feeney, Mr. Souder, Mr. 
 Flake, Mr. Burton of Indiana, Mr. Terry, Mr. Tiahrt, Mr. Shadegg, Mr. 
 Sessions, Mr. Otter, Mr. Aderholt, Mr. Weldon of Florida, Mr. Ryan of 
 Wisconsin, Mr. Barrett of South Carolina, Mr. DeMint, Mr. Culberson, 
Mr. Doolittle, Mr. Garrett of New Jersey, and Mr. Sullivan) 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 provide a 10 percent 
               maximum capital gains tax for individuals.

    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 ``American Dream Tax Relief Act of 
2003''.

SEC. 2. 10 PERCENT MAXIMUM 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, and
                    ``(B) 10 percent of the net capital gain.
            ``(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.--Paragraph (3) of section 55(b) of such 
        Code is amended to read as follows:
            ``(3) Maximum rate of tax on net capital gain of 
        noncorporate taxpayers.--The amount determined under the first 
        sentence of paragraph (1)(A)(i) shall not exceed the sum of--
                    ``(A) the amount determined under such first 
                sentence computed at the rates and in the same manner 
                as if this paragraph had not been enacted on the 
                taxable excess reduced by the net capital gain, plus
                    ``(B) 10 percent of the lesser of the net capital 
                gain or the taxable excess.''
            (2) Exclusion of section 1202 gain not treated as an item 
        of tax preference.--Subsection (a) of section 57 of such Code 
        is amended by striking paragraph (7).
    (c) Conforming Amendments.--
            (1) Subclause (II) of section 53(d)(1)(B)(ii) of such Code 
        is amended by striking ``, (5), and (7)'' and inserting ``and 
        (5)''.
            (2) Paragraph (1) of section 1445(e) of such Code is 
        amended by striking ``20 percent'' and inserting ``10 
        percent''.
            (3) The second sentence of section 7518(g)(6)(A) of such 
        Code is amended by striking ``20 percent'' and inserting ``10 
        percent''.
            (4) The second sentence of section 607(h)(6)(A) of the 
        Merchant Marine Act, 1936 is amended by striking ``20 percent'' 
        and inserting ``10 percent''.
    (d) Transitional Rules.--
            (1) In general.--For purposes of applying subsection (h) of 
        section 1 of such Code in the case of a taxable year which 
        includes the date of the enactment of this Act, the amount of 
        tax determined under such subsection shall be the sum of--
                    (A) the amount determined under such subsection (as 
                in effect on the day before the date of the enactment 
                of this Act) taking into account only gain or loss 
                properly taken into account for the portion of the 
                taxable year before the date of the enactment of this 
                Act, and
                    (B) the amount determined under such subsection (as 
                amended by this Act) taking into account only gain or 
                loss properly taken into account for the portion of the 
                taxable year on or after such date.
            (2) Alternative minimum tax.--For purposes of applying 
        section 55(b)(3) of such Code in the case of such a taxable 
        year, rules similar to the rules of paragraph (1) shall apply.
            (3) Pass-thru entities.--In applying this subsection with 
        respect to any pass-thru entity, the determination of when 
        gains and losses are properly taken into account shall be made 
        at the entity level.
    (e) Effective Dates.--
            (1) In general.--Except as provided in this subsection, the 
        amendments made by this section shall apply to taxable years 
        ending after the date of the enactment of this Act.
            (2) Small business stock.--The amendment made by subsection 
        (b)(2) shall apply to dispositions on or after the date of the 
        enactment of this Act.
            (3) Withholding.--The amendment made by subsection (c)(2) 
        shall apply to amounts paid after the date of the enactment of 
        this Act.
                                 <all>