[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 2416 Placed on Calendar Senate (PCS)]






                                                       Calendar No. 524
110th CONGRESS
  1st Session
                                S. 2416

 To amend the Internal Revenue Code of 1986 to repeal the alternative 
   minimum tax on individuals and replace it with an alternative tax 
                        individuals may choose.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            December 5, 2007

Mr. DeMint introduced the following bill; which was read the first time

                            December 6, 2007

            Read the second time and placed on the calendar

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to repeal the alternative 
   minimum tax on individuals and replace it with an alternative tax 
                        individuals may choose.

    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 ``Taxpayer Choice Act of 2007''.

SEC. 2. REPEAL OF ALTERNATIVE MINIMUM TAX FOR NONCORPORATE TAXPAYERS.

    (a) In General.--Section 55(a) of the Internal Revenue Code of 1986 
(relating to alternative minimum tax imposed) is amended by adding at 
the end the following new flush sentence:
``In the case of a taxpayer other than a corporation, no tax shall be 
imposed by this section for any taxable year beginning after December 
31, 2006, and the tentative minimum tax of any taxpayer other than a 
corporation for any such taxable year shall be zero for purposes of 
this title.''.
    (b) Conforming Amendments.--
            (1) Section 26(c) of such Code is amended by striking ``the 
        term `tentative minimum tax' means the amount determined under 
        section 55(b)(1)'' and inserting ``the tentative minimum tax is 
        zero.''.
            (2) Section 911(f)(2) of such Code is amended to read as 
        follows:
            ``(2) the tentative minimum tax under section 55 for the 
        taxable year shall be zero.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2006.

SEC. 3. SIMPLIFIED INDIVIDUAL INCOME TAX SYSTEM.

    (a) In General.--Part I of subchapter A of chapter 1 of the 
Internal Revenue Code of 1986 (relating to tax on individuals) is 
amended by redesignating section 5 as section 6 and by inserting after 
section 4 the following new section:

``SEC. 5. SIMPLIFIED INDIVIDUAL INCOME TAX SYSTEM.

    ``(a) Election.--
            ``(1) In general.--A taxpayer other than a corporation may 
        elect in accordance with this subsection to be subject to the 
        tax imposed by this section in lieu of the tax imposed by 
        section 1 for a taxable year and all subsequent taxable years.
            ``(2) Effect of election.--For purposes of this title, if 
        an election is in effect under paragraph (1) for any taxable 
        year, the tax imposed by this section shall be treated as the 
        tax imposed by section 1 for the taxable year.
            ``(3) Election.--
                    ``(A) In general.--
                            ``(i) In general.--Except as provided in 
                        clause (ii) of this subparagraph and clauses 
                        (ii) and (iii) of subparagraph (B), the 
                        election under paragraph (1) may only be made 
                        with respect to any taxable year beginning 
                        before January 1, 2017, on a timely filed 
                        return for the first taxable year for which the 
                        election applies.
                            ``(ii) New taxpayers.--In the case of an 
                        individual with no tax liability under this 
                        title before January 1, 2017, the election 
                        under paragraph (1) may only be made for the 
                        first taxable year beginning after December 31, 
                        2016, for which such individual has tax 
                        liability under this title.
                    ``(B) Effect of election.--
                            ``(i) In general.--Except as provided in 
                        clauses (ii) and (iii), the election under 
                        paragraph (1), once made, shall be irrevocable.
                            ``(ii) One-time revocation of election.--A 
                        taxpayer may revoke an election under paragraph 
                        (1) for a taxable year and all subsequent 
                        taxable years. The preceding sentence shall not 
                        apply if the taxpayer has made a revocation 
                        under such sentence for any prior taxable year.
                            ``(iii) Filing status changes due to major 
                        life events.--In the case of any major life 
                        event described in clause (iv), a taxpayer may 
                        make an election under paragraph (1) or revoke 
                        such an election under clause (ii). Any such 
                        election or revocation shall apply for the 
                        taxable year for which made and all subsequent 
                        taxable years until the taxpayer makes an 
                        election under the preceding sentence for any 
                        subsequent (and all succeeding) taxable year.
                            ``(iv) Major life event.--For purposes of 
                        clause (iii), a major life event described in 
                        this clause is marriage, divorce, and death.
    ``(b) Tax Imposed.--
            ``(1) Married individuals and surviving spouses.--In the 
        case of a taxpayer for whom an election under subsection (a) is 
        in effect and who is a married individual (as defined in 
        section 7703) who makes a single return jointly with his spouse 
        under section 6013 or a surviving spouse (as defined in section 
        2(a)), there is hereby imposed on the alternative taxable 
        income of such individual a tax determined in accordance with 
        the following table:

``If taxable income is:             The tax is:
    Not over $100,000..............
                                        10% of alternative taxable 
                                                income. 
    Over $100,000..................
                                        $10,000, plus 25% of the excess 
                                                over $100,000.
            ``(2) Unmarried individuals (other than surviving 
        spouses).--In the case of a taxpayer for whom an election under 
        subsection (a) is in effect and who is not described in 
        paragraph (1), there is hereby imposed on the alternative 
        taxable income of such individual a tax determined in 
        accordance with the following table:

``If taxable income is:             The tax is:
    Not over $50,000...............
                                        10% of alternative taxable 
                                                income. 
    Over $50,000...................
                                        $5,000, plus 25% of the excess 
                                                over $50,000.
    ``(c) Maximum of Tax on Net Capital Gain of Noncorporate 
Taxpayers.--If a taxpayer has a net capital gain for the taxable year, 
the tax imposed by subsection (b) for such taxable year shall not 
exceed the sum of--
            ``(1) the amount determined under subsection (b) computed 
        at the rate and in the same manner as if this paragraph had not 
        been enacted on modified taxable income reduced by the lesser 
        of--
                    ``(A) the net capital gain, or
                    ``(B) the adjusted net capital gain, plus
            ``(2) 5 percent (0 percent in the case of taxable years 
        beginning after 2007) of so much of the adjusted net capital 
        gain (or, if less, modified taxable income) as does not exceed 
        an amount equal to the excess described in section 1(h)(1)(B), 
        plus
            ``(3) 15 percent of the adjusted net capital gain (or, if 
        less, modified taxable income) in excess of the amount on which 
        tax is determined under paragraph (2).
Terms used in this paragraph which are also used in section 1(h) shall 
have the respective meanings given such terms by section 1(h) but 
computed with the adjustments under this section.
    ``(d) Alternative Taxable Income.--For purposes of this section--
            ``(1) In general.--The term `alternative taxable income' 
        means--
                    ``(A) gross income, minus
                    ``(B) the sum of--
                            ``(i) the personal exemption,
                            ``(ii) the dependent allowance, plus
                            ``(iii) the alternative standard deduction.
            ``(2) Personal exemption.--The personal exemption is--
                    ``(A) 200 percent of the dollar amount in effect 
                under subparagraph (B) in the case of--
                            ``(i) a joint return, or
                            ``(ii) a surviving spouse (as defined in 
                        section 2(a)), and
                    ``(B) $3,500 in the case of an individual--
                            ``(i) who is not married and is not a 
                        surviving spouse, or
                            ``(ii) who is a married individual filing a 
                        separate return.
            ``(3) Dependent allowance.--The dependent allowance is 
        $3,500 for each dependent (as defined in section 152).
            ``(4) Alternative standard deduction.--The alternative 
        standard deduction means--
                    ``(A) $25,000 in the case of--
                            ``(i) a joint return, or
                            ``(ii) a surviving spouse (as defined in 
                        section 2(a)), and
                    ``(B) $12,500 in the case of an individual--
                            ``(i) who is not married and is not a 
                        surviving spouse, or
                            ``(ii) who is a married individual filing a 
                        separate return.
    ``(e) Inflation Adjustments.--
            ``(1) In general.--In the case of any taxable year 
        beginning in a calendar year after 2007, each of the dollar 
        amounts for the rate brackets in subsection (b) and each of the 
        dollar amounts in subsection (d)(2)(B), (d)(3), and (d)(4) 
        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, by substituting `calendar year 
                2006' for `calendar year 1992' in subparagraph (B) 
                thereof.
            ``(2) Rounding.--If any amount as adjusted under clause (i) 
        is not a multiple of $100, such amount shall be rounded to the 
        nearest multiple of $100.''.
    (b) Conforming Amendment.--The table of sections for part I of 
subchapter A of chapter 1 of such Code is amended by striking the item 
relating to section 5 and inserting after the item relating to section 
4 the following:

``Sec. 5. Simplified Individual Income Tax System.
``Sec. 6. Cross references relating to tax on individuals.''.
    (c) Capital Gains and Dividends Rate Made Permanent.--The Jobs and 
Growth Tax Relief Reconciliation Act of 2003 is amended by striking 
section 303.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2006.
                                                       Calendar No. 524

110th CONGRESS

  1st Session

                                S. 2416

_______________________________________________________________________

                                 A BILL

 To amend the Internal Revenue Code of 1986 to repeal the alternative 
   minimum tax on individuals and replace it with an alternative tax 
                        individuals may choose.

_______________________________________________________________________

                            December 6, 2007

            Read the second time and placed on the calendar