[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6467 Introduced in House (IH)]
111th CONGRESS
2d Session
H. R. 6467
To amend the Internal Revenue Code of 1986 to provide middle class tax
relief, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
December 1, 2010
Mr. Levin introduced the following bill; which was referred to the
Committee on Ways and Means, and in addition to the Committee on the
Budget, for a period to be subsequently determined by the Speaker, in
each case for consideration of such provisions as fall within the
jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to provide middle class tax
relief, 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; ETC.
(a) Short Title.--This Act may be cited as the ``Middle Class Tax
Relief Act of 2010''.
(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.
(c) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; etc.
TITLE I--MIDDLE CLASS TAX RELIEF MADE PERMANENT
Sec. 101. Middle class tax relief made permanent.
Sec. 102. Certain provisions not applicable to high income individuals.
Sec. 103. Related amendments.
TITLE II--EXPENSING BY SMALL BUSINESSES OF CERTAIN DEPRECIABLE ASSETS
Sec. 201. Increased limitations on expensing by small businesses of
certain depreciable assets.
TITLE III--EXTENSION OF ALTERNATIVE MINIMUM TAX RELIEF
Sec. 301. Extension of alternative minimum tax relief for nonrefundable
personal credits.
Sec. 302. Extension of increased alternative minimum tax exemption
amount.
TITLE IV--BUDGETARY PROVISION
Sec. 401. PAYGO compliance.
TITLE I--MIDDLE CLASS TAX RELIEF MADE PERMANENT
SEC. 101. MIDDLE CLASS TAX RELIEF MADE PERMANENT.
(a) In General.--Section 901 of the Economic Growth and Tax Relief
Reconciliation Act of 2001 shall not apply to the following provisions
of such Act (and to the amendments made by such provisions):
(1) Title I (relating to individual income tax rate
reductions).
(2) Title II (relating to tax benefits related to
children).
(3) Title III (relating to marriage penalty relief).
(4) Title IV (relating to affordable education provisions).
(b) Reduced Rates on Capital Gains and Dividends.--The Jobs and
Growth Tax Relief Reconciliation Act of 2003 is amended by striking
section 303.
SEC. 102. CERTAIN PROVISIONS NOT APPLICABLE TO HIGH INCOME INDIVIDUALS.
(a) Individual Income Tax Rates.--Subsection (i) of section 1 is
amended by striking paragraph (2), by redesignating paragraph (3) as
paragraph (4), and by inserting after paragraph (1) the following new
paragraphs:
``(2) 25- and 28-Percent rate brackets.--The tables under
subsections (a), (b), (c), (d), and (e) shall be applied--
``(A) by substituting `25%' for `28%' each place it
appears (before the application of subparagraph (B)),
and
``(B) by substituting `28%' for `31%' each place it
appears.
``(3) 33-Percent rate bracket.--
``(A) In general.--In the case of taxable years
beginning after December 31, 2010--
``(i) the rate of tax under subsections
(a), (b), (c), and (d) on a taxpayer's taxable
income in the fourth rate bracket shall be 33
percent to the extent such income does not
exceed an amount equal to the excess of--
``(I) the applicable amount, over
``(II) the dollar amount at which
such bracket begins, and
``(ii) the 36 percent rate of tax under
such subsections shall apply only to the
taxpayer's taxable income in such bracket in
excess of the amount to which clause (i)
applies.
``(B) Applicable amount.--For purposes of this
paragraph, the term `applicable amount' means the
excess of--
``(i) the applicable threshold, over
``(ii) the sum of the following amounts in
effect for the taxable year:
``(I) the basic standard deduction
(within the meaning of section
63(c)(2)), and
``(II) the exemption amount (within
the meaning of section 151(d)(1)) (or,
in the case of subsection (a), 2 such
exemption amounts).
``(C) Applicable threshold.--For purposes of this
paragraph, the term `applicable threshold' means--
``(i) $250,000 in the case of subsection
(a),
``(ii) $200,000 in the case of subsections
(b) and (c), and
``(iii) \1/2\ the amount applicable under
clause (i) (after adjustment, if any, under
subparagraph (E)) in the case of subsection
(d).
``(D) Fourth rate bracket.--For purposes of this
paragraph, the term `fourth rate bracket' means the
bracket which would (determined without regard to this
paragraph) be the 36-percent rate bracket.
``(E) Inflation adjustment.--For purposes of this
paragraph, a rule similar to the rule of paragraph
(1)(C) shall apply with respect to taxable years
beginning in calendar years after 2010, applied by
substituting `2008' for `1992' in subsection
(f)(3)(B).''.
(b) Phaseout of Personal Exemptions and Itemized Deductions.--
(1) Overall limitation on itemized deductions.--Section 68
is amended--
(A) by striking ``the applicable amount'' the first
place it appears in subsection (a) and inserting ``the
applicable threshold in effect under section 1(i)(3)'',
(B) by striking ``the applicable amount'' in
subsection (a)(1) and inserting ``such applicable
threshold'',
(C) by striking subsection (b) and redesignating
subsections (c), (d), and (e) as subsections (b), (c),
and (d), respectively, and
(D) by striking subsections (f) and (g).
(2) Phaseout of deductions for personal exemptions.--
(A) In general.--Paragraph (3) of section 151(d) is
amended--
(i) by striking ``the threshold amount'' in
subparagraphs (A) and (B) and inserting ``the
applicable threshold in effect under section
1(i)(3)'',
(ii) by striking subparagraph (C) and
redesignating subparagraph (D) as subparagraph
(C), and
(iii) by striking subparagraphs (E) and
(F).
(B) Conforming amendment.--Paragraph (4) of section
151(d) is amended--
(i) by striking subparagraph (B),
(ii) by redesignating clauses (i) and (ii)
of subparagraph (A) as subparagraphs (A) and
(B), respectively, and by indenting such
subparagraphs (as so redesignated) accordingly,
and
(iii) by striking all that precedes ``in a
calendar year after 1989,'' and inserting the
following:
``(4) Inflation adjustment.--In the case of any taxable
year beginning''.
(c) Reduced Rate on Capital Gains and Dividends.--
(1) In general.--Paragraph (1) of section (1)(h) is amended
by striking subparagraph (C), by redesignating subparagraphs
(D) and (E) as subparagraphs (E) and (F) and by inserting after
subparagraph (B) the following new subparagraphs:
``(C) 15 percent of the lesser of--
``(i) so much of the adjusted net capital
gain (or, if less, taxable income) as exceeds
the amount on which a tax is determined under
subparagraph (B), or
``(ii) the excess (if any) of--
``(I) the amount of taxable income
which would (without regard to this
subsection) be taxed at a rate below 36
percent, over
``(II) the sum of the amounts on
which tax is determined under
subparagraphs (A) and (B),
``(D) 20 percent of the adjusted net capital gain
(or, if less, taxable income) in excess of the sum of
the amounts on which tax is determined under
subparagraphs (B) and (C),''.
(2) Dividends.--Subparagraph (A) of section 1(h)(11) is
amended by striking ``qualified dividend income'' and inserting
``so much of the qualified dividend income as does not exceed
the excess (if any) of--
``(i) the amount of taxable income which
would (without regard to this subsection) be
taxed at a rate below 36 percent, over
``(ii) taxable income reduced by qualified
dividend income.''.
(3) Minimum tax.--Section 55 is amended by adding at the
end the following new subsection:
``(f) Application of Maximum Rate of Tax on Net Capital Gain of
Noncorporate Taxpayers.--In the case of taxable years beginning after
December 31, 2010, the amount determined under subparagraph (C) of
subsection (b)(3) shall be the sum of--
``(1) 15 percent of the lesser of--
``(A) so much of the adjusted net capital gain (or,
if less, taxable excess) as exceeds the amount on which
tax is determined under subparagraph (B) of subsection
(b)(3), or
``(B) the excess described in section
1(h)(1)(C)(ii), plus
``(2) 20 percent of the adjusted net capital gain (or, if
less, taxable excess) in excess of the sum of the amounts on
which tax is determined under subsection (b)(3)(B) and
paragraph (1).''.
(4) Conforming amendments.--
(A) The following provisions are amended by
striking ``15 percent'' and inserting ``20 percent'':
(i) Section 1445(e)(1).
(ii) The second sentence of section
7518(g)(6)(A).
(iii) Section 53511(f)(2) of title 46,
United States Code.
(B) Sections 531 and 541 are each amended by
striking ``15 percent of'' and inserting ``the product
of the highest rate of tax under section 1(c) and''.
(C) Section 1445(e)(6) is amended by striking ``15
percent (20 percent in the case of taxable years
beginning after December 31, 2010)'' and inserting ``20
percent''.
(d) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to taxable years
beginning after December 31, 2010.
(2) Withholding.--The amendments made by subparagraphs
(A)(i) and (C) of subsection (c)(4) shall apply to amounts paid
on or after January 1, 2011.
SEC. 103. RELATED AMENDMENTS.
(a) Application of Increase in Refundable Portion of Child Tax
Credit.--
(1) In general.--Subsection (d) of section 24 is amended--
(A) by striking ``$10,000'' in paragraph (1)(B)(i)
and inserting ``$3,000'', and
(B) by striking paragraphs (3) and (4).
(2) Effective date.--The amendments made by this subsection
shall apply to taxable years beginning after December 31, 2010.
(b) Application of Increase in Earned Income Tax Credit.--
(1) In general.--Subparagraph (B) of section 32(b)(2) is
amended to read as follows:
``(B) Joint returns.--
``(i) In general.--In the case of a joint
return filed by an eligible individual and such
individual's spouse, the phaseout amount
determined under subparagraph (A) shall be
increased by $5,000.
``(ii) Inflation adjustment.--In the case
of any taxable year beginning after 2010, the
$5,000 amount in clause (i) shall be increased
by an amount equal to--
``(I) such dollar amount,
multiplied by
``(II) 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 2008' for
`calendar year 1992' in subparagraph
(B) thereof.
Subparagraph (A) of subsection (j)(2) shall
apply after taking into account any increase
under the preceding sentence.''.
(2) Conforming amendment.--Subsection (b) of section 32 is
amended by striking paragraph (3).
(3) Effective date.--The amendments made by this subsection
shall apply to taxable years beginning after December 31, 2010.
(c) Application to Adoption Credit and Adoption Assistance
Programs.--Subsection (c) of section 10909 of the Patient Protection
and Affordable Care Act is amended to read as follows:
``(c) The amendments made by this section shall not apply to
taxable years beginning after December 31, 2011.''.
TITLE II--EXPENSING BY SMALL BUSINESSES OF CERTAIN DEPRECIABLE ASSETS
SEC. 201. INCREASED LIMITATIONS ON EXPENSING BY SMALL BUSINESSES OF
CERTAIN DEPRECIABLE ASSETS.
(a) Dollar Limitation.--Subparagraph (C) of section 179(b)(1) is
amended by striking ``$25,000'' and inserting ``$125,000''.
(b) Threshold at Which Phaseout Begins.--Subparagraph (C) of
section 179(b)(2) is amended by striking ``$200,000'' and inserting
``$500,000''.
(c) Inflation Adjustment.--Subsection (b) of section 179 is amended
by adding at the end the following new paragraph:
``(6) Inflation adjustments.--
``(A) In general.--In the case of any taxable
beginning in a calendar year after 2011, the $125,000
and $500,000 amounts in paragraphs (1)(C) and (2)(C)
shall each be increased by an amount equal to--
``(i) such dollar amount, multiplied by
``(ii) 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 2006'
for `calendar year 1992' in subparagraph (B)
thereof.
``(B) Rounding.--
``(i) Dollar limitation.--If the amount in
paragraph (1) as increased under subparagraph
(A) is not a multiple of $1,000, such amount
shall be rounded to the nearest multiple of
$1,000.
``(ii) Phaseout amount.--If the amount in
paragraph (2) as increased under subparagraph
(A) is not a multiple of $10,000, such amount
shall be rounded to the nearest multiple of
$10,000.''.
(d) Authority To Revoke Election Made Permanent.--Paragraph (2) of
section 179(c) is amended by striking ``and before 2012''.
(e) Treatment of Certain Computer Software as Section 179 Property
Made Permanent.--Clause (ii) of section 179(d)(1)(A) is amended by
striking ``and before 2012''.
(f) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2011.
TITLE III--EXTENSION OF ALTERNATIVE MINIMUM TAX RELIEF
SEC. 301. EXTENSION OF ALTERNATIVE MINIMUM TAX RELIEF FOR NONREFUNDABLE
PERSONAL CREDITS.
(a) In General.--Paragraph (2) of section 26(a) is amended--
(1) by striking ``2000, 2001, 2002, 2003, 2004, 2005, 2006,
2007, 2008, or 2009'' and inserting ``the period beginning with
calendar year 2000 and ending with calendar year 2011'', and
(2) by striking ``2009'' in the heading thereof and
inserting ``2011''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2009.
SEC. 302. EXTENSION OF INCREASED ALTERNATIVE MINIMUM TAX EXEMPTION
AMOUNT.
(a) In General.--Paragraph (1) of section 55(d) is amended--
(1) by striking ``($70,950 in the case of taxable years
beginning in 2009)'' in subparagraph (A) and inserting
``($72,450 in the case of taxable years beginning in 2010 or
2011)'', and
(2) by striking ``($46,700 in the case of taxable years
beginning in 2009)'' in subparagraph (B) and inserting
``($47,450 in the case of taxable years beginning in 2010 or
2011)''.
(b) Nonapplication of EGTRRA Sunset.--Section 901 of the Economic
Growth and Tax Relief Reconciliation Act of 2001 shall not apply to the
amendments made by section 701 of such Act.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2009.
TITLE IV--BUDGETARY PROVISION
SEC. 401. PAYGO COMPLIANCE.
The budgetary effects of this Act, for the purpose of complying
with the Statutory Pay-As-You-Go Act of 2010, shall be determined by
reference to the latest statement titled ``Budgetary Effects of PAYGO
Legislation'' for this Act, submitted for printing in the Congressional
Record by the Chairman of the House Budget Committee, provided that
such statement has been submitted prior to the vote on passage.
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