[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