109 HR 5807 IH: Middle Class Tax Relief Act of
U.S. House of Representatives
2006-07-13
text/xml
EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
1.Short title; table of
contents
(a)This Act may be cited
as the Middle Class Tax Relief Act of
2006
.
(b)The table of contents of this Act is as follows:
Sec. 1. Short title; table of contents.
Title I—Tax relief for middle class families
Sec. 101. Middle class families tax relief credits.
Sec. 102. Double the child tax credit for middle class
families.
Sec. 103. Eliminate the middle class surcharge.
Title II—Surtax for families with incomes over
$1 million
Sec. 201. Surtax for families with incomes over
$1 million.
<enum>I</enum><header>Tax
relief for middle class families</header>
<section id="H0B783BB932D24F72A88E628032E34D4"><enum>101.</enum><header>Middle class
families tax relief credits</header>
<subsection id="H17A4DF69C0D547B6A1D9E94B9EF65B7E"><enum>(a)</enum><header>In
general</header><text>Subpart A of part IV of subchapter A of chapter 1 of the
Internal Revenue Code of 1986 (relating to nonrefundable personal credits) is
amended by inserting before section 26 the following new section:</text>
<quoted-block display-inline="no-display-inline" id="H1542546303D84B0A8DB1604725A4A3F" style="OLC">
<section id="H39B8A2E39D5D43DF80EF89941425CBC2"><enum>25E.</enum><header>Middle class
families tax relief credit</header>
<subsection id="HAF13E07C919A40528732CCE95BAF634E"><enum>(a)</enum><header> 10 percent tax
reduction for the middle class</header>
<paragraph id="H915FDC72D9D3431AAD0035E04555C822"><enum>(1)</enum><header>In
general</header><text>In the case of any natural person, there shall be allowed
as a credit against the tax imposed by this chapter for the taxable year an
amount equal to 10 percent of the amount of such tax.</text>
</paragraph><paragraph id="H08185647D42A4A18B0B55F598F27AB05"><enum>(2)</enum><header>Income
limitation</header><text display-inline="yes-display-inline">The amount
allowable as a credit under paragraph (1) for any taxable year shall be reduced
(but not below zero) by an amount which bears the same ratio to the amount so
allowable (determined without regard to this paragraph) as—</text>
<subparagraph id="H308AFA774BB94F50A9FEAE19F16E7108"><enum>(A)</enum><text>the amount (if
any) by which the taxpayer’s adjusted gross income exceeds $75,000 ($150,000 in
the case of a joint return), bears to</text>
</subparagraph><subparagraph id="H784A660D7FDB409C9EFC0010C9AC0053"><enum>(B)</enum><text display-inline="yes-display-inline">$5,000 ($10,000 in the case of a joint
return).</text>
</subparagraph></paragraph></subsection><subsection id="H0B13AA97F77346C28B0677D52D113FBC"><enum>(b)</enum><header>Zero tax bracket
for the poor</header>
<paragraph id="HC92B5026DBB748FFBA44A92C5CFAECA"><enum>(1)</enum><header>In
general</header><text>In the case of any natural person, there shall be allowed
as a credit against the tax imposed by this chapter for the taxable year an
amount equal to the excess of—</text>
<subparagraph display-inline="no-display-inline" id="H1F26B5B2348047E1866EBBA8EC8F15CE"><enum>(A)</enum><text display-inline="yes-display-inline">the sum of the taxpayer’s regular tax
liability for the taxable year and the tax imposed by section 55(a) for the
taxable year, over</text>
</subparagraph><subparagraph id="HE7349D3345274A448F1040A5004400FD"><enum>(B)</enum><text>the sum of the
credits allowed under this part (other than this subsection) for the taxable
year.</text>
</subparagraph></paragraph><paragraph display-inline="no-display-inline" id="H6413757261C3448B95F308D61CB59E25"><enum>(2)</enum><header>Income
limitation</header><text display-inline="yes-display-inline">The amount
allowable as a credit under paragraph (1) for any taxable year shall be reduced
(but not below zero) by an amount which bears the same ratio to the amount so
allowable (determined without regard to this paragraph) as—</text>
<subparagraph id="H0914E13DBDB14A6D92E925C2DD84DC"><enum>(A)</enum><text>the amount (if any)
by which the taxpayer’s adjusted gross income exceeds $12,500 ($25,000 in the
case of a joint return), bears to</text>
</subparagraph><subparagraph id="HF86BC71E3E9844BBAFB2DEE96C18AEBD"><enum>(B)</enum><text display-inline="yes-display-inline">$2,500 ($5,000 in the case of a joint
return).</text>
</subparagraph></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection display-inline="no-display-inline" id="HEEA68C4972F64F5386DD7F040024DC26"><enum>(b)</enum><header>Clerical
amendment</header><text display-inline="yes-display-inline">The table of
sections of subpart A of part IV of subchapter A of chapter 1 of such Code is
amended by inserting before the item relating to section 26 the following new
item:</text>
<quoted-block display-inline="no-display-inline" id="H67470A7186934AE79B934B12AF5FD11E" style="OLC">
<toc container-level="quoted-block-container" idref="H1542546303D84B0A8DB1604725A4A3F" lowest-bolded-level="division-lowest-bolded" lowest-level="section" quoted-block="no-quoted-block" regeneration="yes-regeneration">
<toc-entry idref="H39B8A2E39D5D43DF80EF89941425CBC2" level="section">Sec. 25E. Middle class families tax relief
credits.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" id="H34DC4C58AD004A28BA23B48693AE0D2"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to taxable
years beginning after the date of the enactment of this Act.</text>
</subsection></section><section id="HB29D5896546F4ECFB6EC1BC271ACC1FA"><enum>102.</enum><header>Double the
child tax credit for middle class families</header>
<subsection id="HE1694B3BD82942BA84C263286521003F"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Subsection (a) of
<external-xref legal-doc="usc" parsable-cite="usc/26/24">section 24</external-xref> of the Internal Revenue Code of 1986 (relating to child tax credit)
is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H634C30B180A34E28820291349B6FAA5B" style="OLC">
<subsection id="H2DB232A5CEBB45E687EDDB21E4D7B7F"><enum>(a)</enum><header>Allowance of
credit</header>
<paragraph id="HCB5138EDFCBE4D46A8FC276E310075E0"><enum>(1)</enum><header>In
general</header><text>There shall be allowed as a credit against the tax
imposed by this chapter for the taxable year with respect to each qualifying
child of the taxpayer an amount equal to the sum of—</text>
<subparagraph id="HEF1E3CD611304FB5A3BDABBA67296867"><enum>(A)</enum><text>the basic credit
for the taxable year, plus</text>
</subparagraph><subparagraph id="HAE25080CC93E4C2B955EBAFD8700F893"><enum>(B)</enum><text>the additional
credit for the taxable year.</text>
</subparagraph></paragraph><paragraph id="H30F15EB3911D401F8419C1437225ABF7"><enum>(2)</enum><header>Basic
credit</header><text>For purposes of this section, the term <quote>basic
credit</quote> means—</text>
<subparagraph id="HAA4DD15BDD5345719EC5CB29701395F"><enum>(A)</enum><text>$1,000 in the case
of any taxable year beginning before January 1, 2011, and</text>
</subparagraph><subparagraph id="H1701C8C2F4FF40E2AF3FF9DD25E57A3"><enum>(B)</enum><text>$500 in the case of
any other taxable year.</text>
</subparagraph></paragraph><paragraph id="H6CFB9C00915047CDA0A16F70D120B7EE"><enum>(3)</enum><header>Additional
credit</header><text>For purposes of this section, the term <quote>additional
credit</quote> means—</text>
<subparagraph id="HAE2FD2C1B630475CB79FA0492DF8015E"><enum>(A)</enum><text>$1,000 in the case
of any taxable year beginning before January 1, 2011, and</text>
</subparagraph><subparagraph id="HD480FC842D914803B1C2A432DDE9BBAC"><enum>(B)</enum><text>$500 in the case
of any other taxable
year.</text>
</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H5D1C4A3AA4D84F44913673D7060703EF"><enum>(b)</enum><header>Limitation on
additional credit based on adjusted gross income</header><text>Subsection (b)
of section 24 of such Code is amended by adding at the end the following new
paragraphs:</text>
<quoted-block display-inline="no-display-inline" id="H7575343468404CFE84EEBBAFD70F5C4" style="OLC">
<paragraph id="HBC59B8268437424C9F704D001F66AF72"><enum>(4)</enum><header>Limitation on
additional credit based on adjusted gross income</header><text display-inline="yes-display-inline">The amount of the additional credit
determined under subsection (a)(3) shall be reduced (but not below zero) by an
amount which bears the same ratio to such amount (determined without regard to
this paragraph) as—</text>
<subparagraph id="HA575BA78AEAC451BAA28678B782FA946"><enum>(A)</enum><text>the amount (if
any) by which the taxpayer’s adjusted gross income exceeds $75,000 ($150,000 in
the case of a joint return), bears to</text>
</subparagraph><subparagraph id="HE1FB86ADC6EB4C83B9B800935246A770"><enum>(B)</enum><text display-inline="yes-display-inline">$5,000 ($10,000 in the case of a joint
return).</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="HB4C3450F97DD4BF6BEDCF326A4652357"><enum>(c)</enum><header>Conforming
amendments</header><text>Paragraph (1) of section 24(b) of such Code is
amended—</text>
<paragraph id="H3698866F6F8E4941A3F3648AC5BD5ED"><enum>(1)</enum><text>by
striking <quote>the credit allowable under subsection (a)</quote> and inserting
<quote>the basic credit determined under subsection (a)(2)</quote>, and</text>
</paragraph><paragraph id="HACB40464B4424E8691C200936036D4A"><enum>(2)</enum><text>by
inserting <quote><header-in-text level="paragraph" style="OLC">on basic
credit</header-in-text></quote> after <quote><header-in-text level="paragraph" style="OLC">Limitation</header-in-text></quote> in the heading thereof.</text>
</paragraph></subsection><subsection id="H74165893405B4940BFE82D32857019F7"><enum>(d)</enum><header>Coordination
with EGTRRA sunset</header><text>Section 901 of the Economic Growth and Tax
Relief Reconciliation Act of 2001 shall not apply to the amendment made by
section 201(a) of such Act.</text>
</subsection><subsection id="H514B3C6C0C4947CF84B891766B759727"><enum>(e)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to taxable
years beginning after the date of the enactment of this Act.</text>
</subsection></section><section display-inline="no-display-inline" id="H10E8E29C764443E70033A718BEF5824" section-type="subsequent-section"><enum>103.</enum><header>Eliminate the middle
class surcharge</header>
<subsection id="HEF64854E909A47F7B431BFF26CD791A9"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Section 55 of the
Internal Revenue Code of 1986 (relating to alternative minimum tax imposed) is
amended by adding at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H5E9C63975A0B4A51ABBA75C9FCAF2C40" style="OLC">
<subsection id="HED2AA264B8C94298A177C980B000FA3F"><enum>(f)</enum><header>Exemption for
Individuals for Taxable Years Beginning in 2007</header><text>For any taxable
year beginning in 2007, in the case of an individual—</text>
<paragraph id="H2358B5C654FC4B899DFD6395A9E466ED"><enum>(1)</enum><header>In
general</header><text>The tentative minimum tax of the taxpayer shall be zero
if the adjusted gross income of the taxpayer (as determined for purposes of the
regular tax) is equal to or less than the threshold amount.</text>
</paragraph><paragraph id="H1CEE0175FBB74DD2B7CFC9A87416A4EE"><enum>(2)</enum><header>Phasein of
liability above exemption level</header><text>In the case of a taxpayer whose
adjusted gross income exceeds the threshold amount but does not exceed $112,500
($225,000 in the case of a joint return), the tax imposed by subsection (a)
shall be the amount which bears the same ratio to such tax (determined without
regard to this subsection) as—</text>
<subparagraph id="HACC77143CAF3483E99C739F6E7FFF2F3"><enum>(A)</enum><text>the excess
of—</text>
<clause id="H47AF785423204F319FEA70E958BF01E"><enum>(i)</enum><text>the
adjusted gross income of the taxpayer (as determined for purposes of the
regular tax), over</text>
</clause><clause id="H4EEFA66120F44DFE0061C8411E00B2CB"><enum>(ii)</enum><text>the threshold
amount, bears to</text>
</clause></subparagraph><subparagraph id="H661ECC45C70C4BC09FE83403647500E8"><enum>(B)</enum><text>$12,500 ($25,000
in the case of a joint return).</text>
</subparagraph></paragraph><paragraph id="H41942E01A47E447C915391DBE893DD13"><enum>(3)</enum><header>Threshold
amount</header><text>For purposes of this paragraph, the term <quote>threshold
amount</quote> means $100,000 ($200,000 in the case of a joint return).</text>
</paragraph><paragraph id="HB8BDC39E76484C4A8DE7FCC7FF2F6058"><enum>(4)</enum><header>Estates and
trusts</header><text>This subsection shall not apply to any estate or
trust.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="HDB136C1BB4DD40C392607814B00A7A8"><enum>(b)</enum><header>Effective
Date</header><text>The amendment made by this section shall apply to taxable
years beginning after December 31, 2005.</text>
</subsection></section><enum>II</enum><header>Surtax for
families with incomes over $<enum-in-header>1</enum-in-header> million</header>
<section display-inline="no-display-inline" id="H4BF3507DDB29407E8DF34557005BA7DE" section-type="subsequent-section"><enum>201.</enum><header>Surtax for families
with incomes over $<enum-in-header>1</enum-in-header> million</header>
<subsection id="H772A5A393C5048BAB343ECB1A0F971B9"><enum>(a)</enum><header>General
rule</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/1">Section 1</external-xref> of the Internal Revenue Code of 1986 (relating to
imposition of tax on individuals) is amended by adding at the end the following
new subsection:</text>
<quoted-block id="HC75F8E3275DD4F32B32158BE9481DF45" style="OLC">
<subsection id="HD2C6AF47E05246ECB5C03986F5816439"><enum>(j)</enum><header>Surtax for
families with incomes over $<enum-in-header>1,000,000</enum-in-header></header>
<paragraph id="H1AD07ADDA93A4454B6B2EFFB15FE5C3"><enum>(1)</enum><header>In
general</header><text>If the adjusted gross income of a taxpayer exceeds
$500,000 ($1,000,000, in the case of a joint return), the tax imposed by this
section (determined without regard to this subsection) shall be increased by an
amount determined in accordance with the following tables:</text>
<subparagraph id="H55E4192E1E574A669997C8DB8DD093A6"><enum>(A)</enum><header>Joint
returns</header><text display-inline="yes-display-inline">In the case of a
joint return:</text>
<table align-to-level="section" frame="none" line-rules="no-gen" rule-weights="0.0.0.4.0.0" table-type="subformat-2-Tax-Rate">
<tgroup cols="2"><colspec coldef="txt" colname="col1" colsep="0" colwidth="140" min-data-value="0"></colspec><colspec coldef="txt" colname="col2" colsep="0" colwidth="200" min-data-value="0"></colspec>
<thead>
<row><entry align="left" colname="I45" rowsep="0">If taxable
income is:</entry><entry align="left" colname="I46" rowsep="0">The tax
is:</entry>
</row>
</thead>
<tbody>
<row><entry colname="I47" rowsep="0">Over $1,000,000 but not over
$1,000,000,000</entry><entry colname="I48" rowsep="0">7% of the excess over
$1,000,000</entry>
</row>
<row><entry colname="I47" rowsep="0">Over $1,000,000,000
</entry><entry colname="I48" rowsep="0">$69,930,000, plus 10% of the excess
over $1,000,000,000</entry>
</row>
</tbody>
</tgroup>
</table>
</subparagraph><subparagraph id="H5FDA1626CF6D443A00CE46C26ECE208"><enum>(B)</enum><header>Other
returns</header><text>In the case of any other return:</text>
<table align-to-level="section" frame="none" line-rules="no-gen" rule-weights="0.0.0.4.0.0" table-type="subformat-2-Tax-Rate">
<tgroup cols="2"><colspec coldef="txt" colname="col1" colsep="0" colwidth="140" min-data-value="0"></colspec><colspec coldef="txt" colname="col2" colsep="0" colwidth="200" min-data-value="0"></colspec>
<thead>
<row><entry align="left" colname="I45" rowsep="0">If taxable
income is:</entry><entry align="left" colname="I46" rowsep="0">The tax
is:</entry>
</row>
</thead>
<tbody>
<row><entry colname="I47" rowsep="0">Over $500,000 but not over
$500,000,000</entry><entry colname="I48" rowsep="0">7% of the excess over
$500,000</entry>
</row>
<row><entry colname="I47" rowsep="0">Over
$500,000,000</entry><entry colname="I48" rowsep="0">$34,965,000, plus 10% of
the excess over $500,000,000</entry>
</row>
</tbody>
</tgroup>
</table>
</subparagraph></paragraph><paragraph id="HB17AEC9639994C5CB2B01004865CB517"><enum>(2)</enum><header>Tax not to apply
to estates and trusts</header><text>This subsection shall not apply to an
estate or trust.</text>
</paragraph><paragraph id="HFFCA6DF3A5EA48D1AAE8B487BA4B2F36"><enum>(3)</enum><header>Special
rule</header><text display-inline="yes-display-inline">For purposes of section
55, the amount of the regular tax shall be determined without regard to this
subsection.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H9FE620AC50DB47C4A8568D76A3075B04"><enum>(b)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to taxable
years beginning after the date of the enactment of this Act.</text>
</subsection><subsection id="H4F5426ED01BA4CE38300ED70C026EEC1"><enum>(c)</enum><header>Section
<enum-in-header>15</enum-in-header> not to apply</header><text>The amendment
made by subsection (a) shall not be treated as a change in a rate of tax for
purposes of <external-xref legal-doc="usc" parsable-cite="usc/26/15">section 15</external-xref> of the Internal Revenue Code of 1986.</text>
</subsection></section>