[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 3005 Introduced in Senate (IS)]

113th CONGRESS
  2d Session
                                S. 3005

To amend the Internal Revenue Code of 1986 to provide for a progressive 
 consumption tax and to reform the income tax, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           December 11, 2014

  Mr. Cardin introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to provide for a progressive 
 consumption tax and to reform the income tax, 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) In General.--This Act may be cited as the ``Progressive 
Consumption Tax Act of 2014''.
    (b) Reference.--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 of this Act is as 
follows:

Sec. 1. Short title, etc.
                  TITLE I--PROGRESSIVE CONSUMPTION TAX

Sec. 101. Imposition of progressive consumption tax.
             TITLE II--INDIVIDUAL AND CORPORATE TAX REFORM

               Subtitle A--Individual Income Tax Reforms

Sec. 201. Individual income tax rate reductions.
Sec. 202. Family allowance amounts.
Sec. 203. Repeal of limitations relating to itemized deductions.
Sec. 204. Termination of separate treatment of capital gains.
Sec. 205. Repeals.
Sec. 206. Establishment of progressive tax rebate.
Sec. 207. Technical and conforming amendments.
                   Subtitle B--Corporate Tax Reforms

Sec. 211. Corporate income tax rate reduction.
          TITLE III--REFUND OF EXCESS CONSUMPTION TAX REVENUE

Sec. 301. Refunds of excess consumption tax revenue.

                  TITLE I--PROGRESSIVE CONSUMPTION TAX

SEC. 101. IMPOSITION OF PROGRESSIVE CONSUMPTION TAX.

    (a) In General.--Subtitle D is amended by inserting before chapter 
31 the following new chapter:

               ``CHAPTER 30--PROGRESSIVE CONSUMPTION TAX

                   ``subchapter a. imposition of tax

                     ``subchapter b. taxable supply

                   ``subchapter c. credit against tax

                     ``subchapter d. administration

             ``subchapter e. definitions and special rules

                   ``Subchapter A--Imposition of Tax

``Sec. 3901. Imposition of tax.
``Sec. 3902. Taxable amount.

``SEC. 3901. IMPOSITION OF TAX.

    ``(a) General Rule.--A tax is hereby imposed on every taxable 
supply.
    ``(b) Amount of Tax.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        amount of the tax shall be 10 percent of the taxable amount.
            ``(2) Special rate for exports.--The amount of the tax 
        shall be zero with respect to the provision of any supply which 
        is--
                    ``(A) a supply of tangible personal property that 
                is exported from the United States within 90 days after 
                the provider gives an invoice for the supply, or
                    ``(B) a supply, other than a supply of tangible 
                personal property--
                            ``(i) which is provided to a recipient that 
                        is not in the United States when the supply is 
                        performed or otherwise done, and
                            ``(ii) the use of which takes place outside 
                        of the United States.

``SEC. 3902. TAXABLE AMOUNT.

    ``(a) Amount Charged Customer.--For purposes of this chapter, the 
taxable amount for any taxable supply for which money is the only 
consideration shall be the price charged by the provider--
            ``(1) including all invoiced charges for transportation, 
        and other items payable to the provider with respect to the 
        supply, but
            ``(2) excluding the tax imposed by section 3901 with 
        respect to the supply and excluding any State and local sales 
        and use taxes with respect to the supply.
    ``(b) Barter Transactions.--For purposes of this chapter, the 
taxable amount for any taxable supply which includes consideration 
other than money shall be the fair market value of the consideration 
(including all invoiced charges for transportation and other items 
payable to the provider) plus the amount of any money paid in 
consideration.
    ``(c) Imports.--For purposes of this chapter, the taxable amount in 
the case of any import shall be--
            ``(1) the customs value plus customs duties and any other 
        duties which may be imposed, or
            ``(2) if there is no such customs value, the fair market 
        value (determined as if the importer had sold the supply).
For purposes of this subsection, the customs value of any import shall 
include all invoiced charges for transportation and other items payable 
to the importer with respect to the supply.
    ``(d) Special Rule in the Case of Sales of Certain Used Consumer 
Goods.--For purposes of this chapter, if--
            ``(1) a person acquires any tangible personal property in a 
        transaction which was not taxable under this chapter, and
            ``(2) such property had been used by an ultimate consumer 
        before such acquisition,
the taxable amount in the case of any sale of such property by such 
person (determined without regard to this subsection) shall be reduced 
by the amount paid for such property by such person.

                     ``Subchapter B--Taxable Supply

``Sec. 3911. Taxable supply.
``Sec. 3912. Supplies made in connection with the United States.
``Sec. 3913. Exempt supply.

``SEC. 3911. TAXABLE SUPPLY.

    ``(a) In General.--For purposes of this chapter, the term `taxable 
supply' means--
            ``(1) the importation of property into the United States, 
        and
            ``(2) any supply (other than an exempt supply)--
                    ``(A) which is provided--
                            ``(i) in the course of carrying on a trade 
                        or business,
                            ``(ii) in the case of an organization 
                        exempt from tax under section 501(a), in 
                        furtherance of the activities related to the 
                        purpose or function constituting the basis of 
                        its exemption under section 501, or
                            ``(iii) in the case of a State, an Indian 
                        tribal government, a possession of the United 
                        States, or any political subdivision of any of 
                        the foregoing, or the United States or the 
                        District of Columbia, in carrying out any 
                        activity that is not an essential governmental 
                        function,
                    ``(B) for which consideration is provided in 
                return, and
                    ``(C) which is made in connection with the United 
                States.
    ``(b) Supply.--For purposes of this chapter--
            ``(1) In general.--The term `supply' means any supply 
        whatsoever, including--
                    ``(A) the sale or provision (including through 
                renting, leasing, or licensing) of property,
                    ``(B) the performance of services,
                    ``(C) the grant, assignment, or surrender of real 
                property,
                    ``(D) the creation, grant, transfer, assignment, or 
                surrender of any right,
                    ``(E) financial supplies, and
                    ``(F) an entry into, or release from, an obligation 
                or agreement to perform or refrain from performing an 
                act.
            ``(2) Special rule for services for employer.--An 
        employee's services for the employee's employer shall not be 
        treated as a supply.

``SEC. 3912. SUPPLIES MADE IN CONNECTION WITH THE UNITED STATES.

    ``(a) Tangible Property.--For purposes of this chapter--
            ``(1) In general.--The supply of tangible property is made 
        in connection with the United States if--
                    ``(A) the property is delivered or made available 
                to the recipient in the United States, or
                    ``(B) the property is assembled in or removed from 
                any location in the United States.
            ``(2) Real property.--The supply of real property is made 
        in connection with the United States if the real property is 
        located in the United States.
    ``(b) Services, Intangible Property, and Other Supplies.--For 
purposes of this chapter, the supply of anything other than tangible 
property or real property is made in connection with the United States 
if--
            ``(1) the supply is used, performed, or otherwise done in 
        the United States, or
            ``(2) the supply is provided through a trade or business in 
        the United States.

``SEC. 3913. EXEMPT SUPPLY.

    ``(a) In General.--An exempt supply shall not be subject to tax 
under this chapter.
    ``(b) Exempt Supply.--For purposes of this chapter--
            ``(1) In general.--The term `exempt supply' means--
                    ``(A) the rental or leasing of residential real 
                property,
                    ``(B) any sale of qualified residential real 
                property,
                    ``(C) any financial supply, and
                    ``(D) any taxable supply (or category of such 
                supplies) treated as an exempt supply under section 
                3932(b).
            ``(2) Qualified residential real property.--For purposes of 
        paragraph (1), the term `qualified residential real property' 
        means residential real property--
                    ``(A) which--
                            ``(i) has previously been sold as 
                        residential real property, or
                            ``(ii) has been continuously rented for 5 
                        years or more, and
                    ``(B) to which substantial renovations have not 
                been made after the date of the enactment of this 
                chapter.

                   ``Subchapter C--Credit Against Tax

``Sec. 3916. Credit against tax.

``SEC. 3916. CREDIT AGAINST TAX.

    ``(a) General Rule.--There shall be allowed as a credit against the 
aggregate amount of tax imposed by section 3901 with respect to all 
taxable supplies made by the taxpayer during the taxable period an 
amount equal to the aggregate amount of tax imposed by section 3901 on 
creditable acquisitions of the taxpayer during such taxable period.
    ``(b) Creditable Acquisitions.--For purposes of this chapter, the 
term `creditable acquisition' means the acquisition or receipt of any 
supply--
            ``(1) which was subject to tax under section 3901 at the 
        time it was provided to the taxpayer,
            ``(2) which was used by the taxpayer--
                    ``(A) in the course of carrying on a trade or 
                business,
                    ``(B) in the case of a taxpayer exempt from tax 
                under section 501(a), in furtherance of the activities 
                related to the purpose or function constituting the 
                basis of the exemption under section 501, or
                    ``(C) in the case of a State, an Indian tribal 
                government, a possession of the United States, or any 
                political subdivision of any of the foregoing, or the 
                United States or the District of Columbia, in carrying 
                out any activity that is not an essential governmental 
                function, and
            ``(3) which was not used by the taxpayer to make an exempt 
        supply.
    ``(c) Exempt Supplies, etc.--If supplies are used partly for a use 
described in subsection (b)(2) and partly for another use, the credit 
shall be allowable only with respect to the supplies used as described 
in subsection (b)(2).
    ``(d) Excess Credit Treated as Overpayment.--
            ``(1) In general.--If for any taxable period the amount of 
        the credit allowable by subsection (a) exceeds the aggregate 
        amount of the tax imposed by section 3901 for such period, such 
        excess shall be treated as an overpayment of the tax imposed by 
        section 3901.
            ``(2) Time when overpayment arises.--Any overpayment under 
        paragraph (1) for any taxable period shall be treated as 
        arising on the later of--
                    ``(A) the due date for the return for such period, 
                or
                    ``(B) the date on which the return is filed.

                     ``Subchapter D--Administration

``Sec. 3921. Provider liable for tax.
``Sec. 3922. Tax invoices.
``Sec. 3923. Time for filing return and claiming credit; deposits of 
                            tax.
``Sec. 3924. Treatment of related businesses, etc.
``Sec. 3925. Reports.
``Sec. 3926. Regulations.

``SEC. 3921. PROVIDER LIABLE FOR TAX.

    ``(a) In General.--Except as provided in subsection (b), the person 
providing the supply shall be liable for the tax imposed by section 
3901.
    ``(b) Special Rule for Imports.--The person receiving the supply 
shall be liable for the tax imposed under section 3901--
            ``(1) in the case of any taxable supply described in 
        section 3911(a)(1), and
            ``(2) in the case of any taxable supply which is not a 
        supply of tangible property and which is--
                    ``(A) performed or otherwise done outside the 
                United States,
                    ``(B) used in the United States, and
                    ``(C) acquired for use--
                            ``(i) in carrying on a trade or business in 
                        the United States,
                            ``(ii) by an organization exempt from tax 
                        under section 501(a), in furtherance of 
                        activities related to the purpose or function 
                        constituting the basis of its exemption under 
                        section 501, or
                            ``(iii) by a State, an Indian tribal 
                        government, a possession of the United States, 
                        or any political subdivision of any of the 
                        foregoing, or the United States or the District 
                        of Columbia, in carrying out any activity that 
                        is not an essential governmental function.

``SEC. 3922. TAX INVOICES.

    ``(a) In General.--
            ``(1) Supplies made in connection with the united states.--
        Except as otherwise provided in this subsection, any person 
        providing a taxable supply shall give the recipient a tax 
        invoice with respect to such supply.
            ``(2) Certain services performed outside the united 
        states.--In the case of any taxable supply described in section 
        3921(b)(2), paragraph (1) shall not apply and the person 
        receiving the taxable supply shall generate a tax invoice with 
        respect to such supply.
            ``(3) Imports.--In the case of any taxable supply described 
        in section 3911(a), the Secretary, in consultation with the 
        Commissioner of Customs and Border Protection, shall promulgate 
        regulations governing the provision of tax invoices.
    ``(b) Content of Invoice.--The tax invoice required by subsection 
(a) with respect to any supply shall set forth--
            ``(1) the name and, in the case of an invoice under 
        subsection (a)(1), identification number of the provider,
            ``(2) the name of the recipient,
            ``(3) the date of the taxable supply,
            ``(4) the taxable amount with respect to the taxable 
        supply,
            ``(5) the amount of the tax imposed by section 3901, and
            ``(6) such other information as may be prescribed by 
        regulations.
    ``(c) No Credit Without Invoice.--
            ``(1) In general.--Except as provided in paragraph (2) or 
        (3), a taxpayer may claim a credit with respect to a creditable 
        acquisition only if the taxpayer--
                    ``(A) has in the taxpayer's possession a tax 
                invoice which meets the requirements of this section, 
                and
                    ``(B) is named as the recipient of the supply in 
                such invoice.
            ``(2) Employees or other agents named in invoices.--To the 
        extent provided in regulations, the naming of an employee or 
        other agent of the recipient of the supply shall be treated as 
        the naming of the recipient.
            ``(3) Waiver of invoice requirement in certain cases.--To 
        the extent provided in regulations, paragraph (1) shall not 
        apply--
                    ``(A) where the taxpayer can demonstrate that the 
                failure to receive or to have in the taxpayer's 
                possession a tax invoice was without fault on the 
                taxpayer's part, or
                    ``(B) to a taxable supply (or category of supplies) 
                where--
                            ``(i) the amount involved is de minimis, or
                            ``(ii) the information required by 
                        subsection (b) can be reliably established by 
                        sampling or by another method and can be 
                        adequately documented.
    ``(d) Time for Furnishing Invoice.--Any invoice required to be 
furnished by subsection (a) with respect to any supply shall be 
furnished not later than 15 business days after the tax point for such 
supply.

``SEC. 3923. TIME FOR FILING RETURN AND CLAIMING CREDIT; DEPOSITS OF 
              TAX.

    ``(a) Filing Return.--Before the last day of the fourth week (third 
week, in the case of any taxpayer to which subsection (c)(2) applies) 
after the close of each taxable period, each person liable for tax 
under this chapter shall file a return of the tax imposed by section 
3901 on taxable supplies having a tax point within such taxable period.
    ``(b) Credit Allowed for Taxable Period in Which Recipient Receives 
Invoice.--
            ``(1) In general.--Except as provided in paragraph (2), a 
        credit allowable by section 3916 with respect to a supply may 
        be allowed only for the first taxable period by the close of 
        which the taxpayer--
                    ``(A) has paid or accrued amounts properly 
                allocable to the tax imposed by section 3901 with 
                respect to such supply, and
                    ``(B) has a tax invoice (or equivalent) with 
                respect to such supply.
            ``(2) Use for later period.--Under regulations, a credit 
        allowable by section 3916 may be allowed for a period after the 
        period set forth in paragraph (1).
    ``(c) Taxable Period.--For purposes of this chapter--
            ``(1) In general.--Except as provided in paragraph (2), the 
        term `taxable period' means a calendar quarter.
            ``(2) Monthly period for certain taxpayers.--
                    ``(A) In general.--In the case of a taxpayer who 
                makes taxable supplies for any month in excess of 
                $20,000,000, the term `taxable period' means a calendar 
                month.
                    ``(B) Election of 1-month period.--If the taxpayer 
                so elects, the term `taxable period' means a calendar 
                month.
    ``(d) Tax Point.--For purposes of this chapter--
            ``(1) Chapter 1 rules with respect to provider govern.--
        Except as provided in paragraph (2), the tax point for any 
        supply is the earlier of--
                    ``(A) the time (or times) when any income from the 
                provision of the supply should be treated by the 
                provider as received or accrued (or any loss should be 
                taken into account by the seller) for purposes of 
                chapter 1, or
                    ``(B) the time (or times) when the provider 
                receives payment for the sale.
            ``(2) Imports.--In the case of the importing of property, 
        the tax point is when the property is entered, or withdrawn 
        from warehouse, for consumption in the United States.
    ``(e) Monthly Deposits Required.--To the extent provided in 
regulations, monthly deposits may be required of the estimated 
liability for any taxable period for the tax imposed by section 3901.

``SEC. 3924. TREATMENT OF RELATED BUSINESSES, ETC.

    ``For purposes of this chapter, to the extent provided in 
regulations, the taxpayer may elect--
            ``(1) to treat as 1 person 2 or more businesses which may 
        be treated under section 52(b) as 1 employer, and
            ``(2) to treat as separate persons separate divisions of 
        the same business.

``SEC. 3925. REPORTS.

    ``The Secretary shall submit to Congress semi-annual reports on the 
implementation and administration of this chapter, including the amount 
of revenue collected from the tax imposed under this chapter and 
estimates of the revenue to be collected from such tax for future 
period.

``SEC. 3926. REGULATIONS.

    ``The Secretary shall prescribe such regulations as may be 
necessary to carry out the purposes of this chapter.

             ``Subchapter E--Definitions and Special Rules

``Sec. 3931. Definitions.
``Sec. 3932. Special rules.

``SEC. 3931. DEFINITIONS.

    ``For purposes of this chapter--
            ``(1) Business.--The term `business' includes--
                    ``(A) a trade, and
                    ``(B) an activity regularly carried on for profit.
            ``(2) Business day.--The term `business day' means any day 
        other than Saturday and Sunday and other than a legal holiday 
        (within the meaning of section 7503).
            ``(3) Employee.--The term `employee' has the meaning such 
        term has for purposes of chapter 24.
            ``(4) Financial supplies.--The term `financial supplies' 
        means the provision, acquisition, or disposal of any of the 
        following: a bank account, a debit or credit arrangement, a 
        mortgage, a superannuation fund, an annuity, insurance, a 
        financial guarantee, an indemnity, currency, securities, or 
        derivatives.
            ``(5) Person.--The term `person' includes any governmental 
        entity.
            ``(6) Provide; provider.--The term `provide', when used in 
        reference to taxable supplies (other than in section 
        3911(a)(2)), includes the importation of property and the term 
        `provider' includes the importer of property.
            ``(7) United states.--The term `United States', when used 
        in a geographical sense, includes a Commonwealth and any 
        possession of the United States.

``SEC. 3932. SPECIAL RULES.

    ``(a) Coordination With Subtitle A.--For purposes of subtitle A--
            ``(1) Treatment of credit.--Any credit allowable to a 
        taxpayer under section 3916 which is attributable to any supply 
        shall be treated as a reduction in the amount paid or incurred 
        by the taxpayer for such supply.
            ``(2) Amount of deduction for tax.--The amount allowable as 
        a deduction for the tax imposed by section 3901 shall be 
        determined without regard to any credit allowable under section 
        3916.
            ``(3) Computation of percentage depletion.--For purposes of 
        sections 613 and 613A--
                    ``(A) gross income shall be reduced by the amount 
                of the tax imposed by section 3901, and
                    ``(B) taxable income shall be determined without 
                regard to any deduction allowed for such tax.
    ``(b) Authority to Zero Rate De Minimis Supplies, etc.--The 
Secretary may prescribe regulations treating as an exempt supply any 
taxable supply (or category of such supplies) where--
            ``(1) the amount involved is de minimis, or
            ``(2) the revenue raised by taxing the supply is not 
        sufficient to justify the administrative and other costs 
        involved in the payment and collection of the tax.''.
    (b) Clerical Amendment.--The table of chapters for subtitle D is 
amended by inserting before the item relating to chapter 31 the 
following:

              ``Chapter 30. Progressive Consumption Tax''.

    (c) Effective Date.--The amendments made by this section shall 
apply to supplies provided after December 31, 2015.

             TITLE II--INDIVIDUAL AND CORPORATE TAX REFORM

               Subtitle A--Individual Income Tax Reforms

SEC. 201. INDIVIDUAL INCOME TAX RATE REDUCTIONS.

    (a) In General.--
            (1) Married individuals filing joint returns and surviving 
        spouses.--Subsection (a) of section 1 is amended by striking 
        the table and inserting the following:

``If taxable income is:             The tax is:
    Not over $100,000..............
                                        15 percent of taxable income.
    Over $100,000 but not over 
        $500,000.
                                        $15,000, plus 25 percent of the 
                                                excess over $100,000.
    Over $500,000..................
                                        $115,000, plus 28 percent of 
                                                the excess over 
                                                $500,000.''.
            (2) Heads of households.--Subsection (b) of section 1 is 
        amended by striking the table and inserting the following:

``If taxable income is:             The tax is:
    Not over $50,000...............
                                        15 percent of taxable income.
    Over $50,000 but not over 
        $250,000.
                                        $7,500, plus 25 percent of the 
                                                excess over $50,000.
    Over $250,000..................
                                        $57,500, plus 28 percent of the 
                                                excess over 
                                                $250,000.''.
            (3) Unmarried individuals (other than surviving spouses and 
        heads of households).--Subsection (c) of section 1 is amended 
        by striking the table and inserting the following:

``If taxable income is:             The tax is:
    Not over $50,000...............
                                        15 percent of taxable income.
    Over $50,000 but not over 
        $250,000.
                                        $7,500, plus 25 percent of the 
                                                excess over $250,000.
    Over $250,000..................
                                        $57,500, plus 28 percent of the 
                                                excess over 
                                                $250,000.''.
            (4) Married individuals filing separate returns.--
        Subsection (d) of section 1 is amended by striking the table 
        and inserting the following:

``If taxable income is:             The tax is:
    Not over $50,000...............
                                        15 percent of taxable income.
    Over $50,000 but not over 
        $250,000.
                                        $7,500, plus 25 percent of the 
                                                excess over $250,000.
    Over $250,000..................
                                        $57,500, plus 28 percent of the 
                                                excess over 
                                                $250,000.''.
    (b) Conforming Amendments Relating to Cost-of-Living Adjustment.--
            (1) In general.--Paragraph (3) of section 1(f) is amended 
        by inserting ``, except as provided in paragraph (7),'' after 
        ``for any calendar year''.
            (2) Updated cost-of-living adjustment for new rates.--
        Section 1(f) is amended by striking paragraphs (7) and (8) and 
        inserting the following:
            ``(7) Cost-of-living adjustment for years after 2015.--
                    ``(A) Calendar year 2016.--In prescribing the 
                tables under paragraph (1) which apply in lieu of the 
                tables contained in subsections (a), (b), (c), and (d) 
                with respect to taxable years beginning in calendar 
                year 2016, the Secretary shall make no adjustment to 
                the dollar amounts in any such table.
                    ``(B) Later calendar years.--In prescribing tables 
                under paragraph (1) which apply in lieu of the tables 
                contained in subsections (a), (b), (c), and (d) with 
                respect to taxable years beginning after December 31, 
                2016, the cost-of-living adjustment used in making 
                adjustments to the dollar amounts in such tables shall 
                be determined under paragraph (3) by substituting 
                `2015' for `1992'.''.
            (3) Conforming amendments.--
                    (A) Paragraph (2) of section 1(f) is amended--
                            (i) by striking ``paragraph (8)'' in 
                        subparagraph (A) and inserting ``paragraph 
                        (7)(A)'', and
                            (ii) by striking ``by adjusting'' in 
                        subparagraph (C) and inserting ``except as 
                        provided in paragraph (7)(A), by adjusting''.
                    (B) The heading of subsection (f) of section 1 is 
                amended by striking ``Phaseout of Marriage Penalty in 
                15-percent Bracket; Adjustments'' and inserting 
                ``Adjustments''.
    (c) Conforming Amendment Relating to Rates.--Section 1 is amended 
by striking subsection (i).
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2015.

SEC. 202. FAMILY ALLOWANCE AMOUNTS.

    (a) In General.--Section 63 is amended to read as follows:

``SEC. 63. TAXABLE INCOME DEFINED.

    ``(a) In General.--For purposes of this subtitle, the term `taxable 
income' means adjusted gross income minus--
            ``(1) the deductions allowed by this chapter (other than 
        those taken into account in determining adjusted gross income), 
        and
            ``(2) the family allowance amount.
    ``(b) Family Allowance.--For purposes of this subtitle--
            ``(1) In general.--The family allowance amount with respect 
        to a taxpayer shall be determined in accordance with the 
        following table:

 
                                                           The family
                  ``If the taxpayer is:                     allowance
                                                           amount is:
 
    Single or married filing separately...............           $50,000
    Married filing jointly or a surviving spouse......          $100,000
    A head of a household.............................          $75,000.
 

            ``(2) Definitions.--For purposes of this subsection--
                    ``(A) the term `single or married filing 
                separately' means a taxpayer to whom subsection (c) or 
                (d) of section 1 applies,
                    ``(B) the term `married filing jointly or a 
                surviving spouse' means a taxpayer to whom subsection 
                (a) of section 1 applies, and
                    ``(C) the term `head of a household' means a 
                taxpayer to whom subsection (b) of section 1 applies.
            ``(3) Adjustment for inflation.--In the case of any taxable 
        year beginning after 2016, each of the dollar amounts in the 
        table under paragraph (1) 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 
                2015' for `calendar year 1992' in subparagraph (B) 
                thereof.
    ``(c) Cross References.--
            ``(1) For deductions of estates and trusts in lieu of the 
        family allowance amount, see section 642(b).
            ``(2) For calculation of family allowance relating to 
        nonresident aliens, see section 873(b)(3).
            ``(3) For determination of marital status, see section 
        7703.''.
    (b) Termination of Personal Exemptions.--
            (1) In general.--Subsection (a) of section 151 is amended 
        by inserting ``, for a taxable year beginning before January 1, 
        2016'' after ``In the case of an individual''.
            (2) Identifying information required to treat individual as 
        dependent.--Section 152 is amended by adding at the end the 
        following new subsection:
    ``(g) Identifying Information Required.--No individual shall be 
treated as a dependent of the taxpayer under this section for a taxable 
year unless the taxpayer includes the TIN of such individual on the 
return of tax for the taxable year.''.
            (3) Conforming amendments.--
                    (A) Section 2(a)(1)(B)(ii) is amended by striking 
                ``of a dependent'' and all that follows and inserting 
                ``of a dependent (as defined in section 152) who 
                (within the meaning of section 152, determined without 
                regard to subsections (b)(1), (b)(2), and (d)(1)(B) 
                thereof) is a son, stepson, daughter, or stepdaughter 
                of the taxpayer.''.
                    (B) Section 2(b)(1)(A)(ii) is amended by striking 
                ``if the taxpayer is entitled to a deduction for the 
                taxable year for such person under section 151'' and 
                inserting ``within the meaning of section 152''.
                    (C) Section 2(b)(1)(B) is amended by striking ``if 
                the taxpayer is entitled to a deduction for the taxable 
                year for such father or mother under section 151'' and 
                inserting ``if such father or mother is a dependent of 
                the taxpayer for the taxable year, within the meaning 
                of section 152''.
                    (D) Section 36B(b)(3)(B) is amended--
                            (i) by striking ``who is not allowed a 
                        deduction under section 151 for the taxable 
                        year with respect to a dependent'' in clause 
                        (ii)(I)(aa) and inserting ``with respect to 
                        whom no dependents are taken into account under 
                        section 152 for purposes of any provision of 
                        this title for the taxable year'', and
                            (ii) by striking ``unless a deduction is 
                        allowed under section 151 for the taxable year 
                        with respect to a dependent other than either 
                        spouse'' and inserting ``unless a dependent 
                        other than either spouse is taken into account 
                        under section 152 for purposes of any provision 
                        of this title for the taxable year''.
                    (E) Section 36B(c)(1)(D) is amended by striking 
                ``with respect to whom a deduction under section 151 is 
                allowable to another taxpayer'' and inserting ``who is 
                taken into account as a dependent by another taxpayer 
                under section 152 for purposes of any provision of this 
                title''.
                    (F) Section 36B(d)(1) is amended by striking ``for 
                whom the taxpayer is allowed a deduction under section 
                151 (relating to allowance of deduction for personal 
                exemptions)'' and inserting ``who is a dependent of the 
                taxpayer under section 152''.
                    (G) Section 36B(e)(1) is amended by striking ``for 
                whom a taxpayer is allowed a deduction under section 
                151 (relating to allowance of deduction for personal 
                exemptions)'' and inserting ``who is a dependent of the 
                taxpayer under section 152''.
                    (H) Section 152(d)(1)(B) is amended by striking 
                ``the exemption amount (as defined in section 151(d))'' 
                and inserting ``the family allowance amount applicable 
                to taxpayers who are single or married filing 
                separately under section 63(b)''.
                    (I) Section 152(f)(6)(B)(i) is amended by striking 
                ``the deduction under section 151(c)'' and inserting 
                ``the family allowance amount under section 63(b)''.
                    (J) Part V of subchapter B of chapter 1 is amended 
                by striking section 153.
                    (K) The table of sections for part V of subchapter 
                B of chapter 1 is amended by striking the item relating 
                to section 153.
                    (L) Section 172(d)(3) is amended to read as 
                follows:
            ``(3) Family allowance amount.--Taxable income under 
        section 63 shall be determined without regard to paragraph (2) 
        of section 63(a), relating to the family allowance amount. No 
        deduction in lieu of the exclusion of such family allowance 
        amount shall be allowed.''.
                    (M) Section 220(b)(6) is amended by striking ``with 
                respect to whom a deduction under section 151 is 
                allowable to another taxpayer'' and inserting ``who is 
                taken into account as a dependent by another taxpayer 
                under section 152 for purposes of any provision of this 
                title''.
                    (N) Section 223(b)(6) is amended by striking ``with 
                respect to whom a deduction under section 151 is 
                allowable to another taxpayer'' and inserting ``who is 
                taken into account as a dependent by another taxpayer 
                under section 152 for purposes of any provision of this 
                title''.
                    (O) Section 443(c) is amended by striking ``the 
                exemptions allowed as a deduction under section 151 
                (and any deduction in lieu thereof) shall be reduced to 
                amounts which bear the same ratio to the full 
                exemptions'' and inserting ``the family allowance 
                amount under section 63 (and any deduction in lieu 
                thereof) shall be reduced to an amount which bears the 
                same ratio to the full family allowance amount''.
                    (P) Section 642(b)(2)(C)(i) is amended--
                            (i) by striking ``151(d)'' and inserting 
                        ``151(d) (as in effect for taxable years 
                        beginning before January 1, 2016)'', and
                            (ii) by striking ``151(d)(3)(C)(iii)'' in 
                        subclause (I) and inserting ``151(d)(3)(C)(iii) 
                        (as so in effect)''.
                    (Q) Section 642(b)(3) is amended by striking ``the 
                deductions allowed under section 151 (relating to 
                deduction for personal exemption)'' and inserting ``the 
                family allowance amount under section 63''.
                    (R) Section 703(a) is amended--
                            (i) by striking ``and'' at the end of 
                        paragraph (1),
                            (ii) by striking subparagraph (A) of 
                        paragraph (2) and by redesignating 
                        subparagraphs (B), (C), (D), (E), and (F) of 
                        such paragraph as subparagraphs (A), (B), (C), 
                        (D), and (E),
                            (iii) by striking the period at the end of 
                        paragraph (2)(F) and inserting ``, and'', and
                            (iv) by adding at the end the following new 
                        paragraph:
            ``(3) taxable income under section 63 shall be determined 
        without regard to paragraph (2) of section 63(a), relating to 
        the family allowance amount.''.
                    (S) Section 773(b) is amended--
                            (i) by striking subparagraph (A) of 
                        paragraph (1) and by redesignating 
                        subparagraphs (B) and (C) of such paragraph as 
                        subparagraphs (A) and (B), and
                            (ii) by adding at the end the following new 
                        paragraph:
            ``(4) Family allowance amount.--Taxable income under 
        section 63 shall be determined without regard to paragraph (2) 
        of section 63(a), relating to the family allowance amount.''.
                    (T) Section 873(b) is amended--
                            (i) by striking ``deductions'' in the 
                        matter preceding paragraph (1), and
                            (ii) by striking paragraph (3) and 
                        inserting the following:
            ``(3) Family allowance amount.--The exclusion of the family 
        allowance amount under section 63(a)(2), except that the 
        taxpayer shall be treated for purposes of section 63(b) as 
        single or married filing separately unless the taxpayer is a 
        resident of a contiguous country or is a national of the United 
        States.''.
                    (U) The heading of section 873 is amended by 
                striking ``deductions'' and inserting ``deductions and 
                allowances''.
                    (V) The item relating to section 873 in the table 
                of sections for subpart A of part II of subchapter N of 
                chapter 1 is amended to read as follows:

``Sec. 873. Deductions and allowances.''.
                    (W) Section 874(b) is amended by striking 
                ``deduction for exemptions under section 151'' and 
                inserting ``exclusion of the family allowance amount 
                under section 63(a)(2)''.
                    (X) Section 891 is amended by striking ``deductions 
                allowable under section 151 and under'' and inserting 
                ``exclusion of the family allowance amount under 
                section 63(a)(2) and the deductions allowable under''.
                    (Y) Section 904(b)(1) is amended to read as 
                follows:
            ``(1) Family allowance and deductions.--For purposes of 
        subsection (a), the taxable income in the case of an 
        individual, estate, or trust shall be computed without regard 
        to the exclusion of the family allowance amount under section 
        63(a)(2) or any deduction in lieu of such exclusion.''.
                    (Z) Section 931(b)(1) is amended by striking 
                ``deductions (other than the deduction under section 
                151, relating to personal exemptions)'' and inserting 
                ``deductions''.
                    (AA) Section 933 is amended--
                            (i) by striking ``deductions (other than 
                        the deduction under section 151, relating to 
                        personal exemptions)'' in paragraph (1) and 
                        inserting ``deductions'', and
                            (ii) by striking ``deductions (other than 
                        the deduction for personal exemptions under 
                        section 151)'' in paragraph (2) and inserting 
                        ``deductions''.
                    (BB) Section 1212(b)(2)(B)(ii) is amended to read 
                as follows:
                            ``(ii) the family allowance amount for the 
                        taxable year under section 63(b) or any 
                        deduction allowed in lieu thereof.''.
                    (CC) Section 1402(a)(7) is amended to read as 
                follows:
            ``(7) taxable income under section 63 shall be determined 
        without regard to paragraph (2) of section 63(a), relating to 
        the family allowance amount;''.
                    (DD) Section 5000A(c)(4)(A) is amended by striking 
                ``for whom the taxpayer is allowed a deduction under 
                section 151 (relating to allowance of deduction for 
                personal exemptions)'' and inserting ``who are taken 
                into account as a dependent by the taxpayer under 
                section 152 for purposes of any provision of this 
                title''.
                    (EE) Section 6012(a)(1) is amended to read as 
                follows:
            ``(1)(A) Every individual--
                    ``(i) having for the taxable year gross income 
                which equals or exceeds the family allowance amount 
                applicable to the individual under section 63, or
                    ``(ii) in the case of individuals entitled to make 
                a joint return (but only if the individual and the 
                individual's spouse had the same household as their 
                home at the close of the taxable year), every 
                individual whose gross income, when combined with the 
                gross income of the individual's spouse, equals or 
                exceeds the family allowance amount applicable to 
                taxpayers who are married filing jointly under section 
                63.
            ``(B) Every individual not described in subparagraph (A) 
        who is taken into account as a dependent by another taxpayer 
        under section 152 for purposes of any provision of this title, 
        but only if such individual's gross income, when combined with 
        the gross income of all individuals taken into account in 
        determining the family allowance amount under section 63(b) of 
        the taxpayer, equals or exceeds the family allowance amount 
        applicable to the taxpayer under such section.''.
                    (FF) Section 6012(a)(8) is amended by striking ``is 
                not less than the sum of the exemption amount plus the 
                basic standard deduction under section 63(c)(2)(D)'' 
                and inserting ``equals or exceeds the family allowance 
                amount applicable to the estate under section 
                1398(c)(3)''.
                    (GG) Section 6013(b)(3)(A) is amended by striking 
                ``has the meaning given to such term'' and all that 
                follows and inserting ``means the family allowance 
                amount applicable to a taxpayer who is single or 
                married filing separately under section 63(b).''.
                    (HH) Section 6014(a) is amended by striking ``who 
                does not itemize his deductions and who is not 
                described in section 6012(a)(1)(C)(i)'' and inserting 
                ``who is not described in section 6012(a)(1)(B)''.
                    (II) Section 6103(l)(21)(A)(iii) is amended by 
                striking ``for whom a deduction is allowed under 
                section 151'' and inserting ``who is taken into account 
                as a dependent under section 152 for purposes of any 
                provision of this title''.
                    (JJ) Section 6334(d)(2)(A) is amended to read as 
                follows:
                    ``(A) the family allowance amount determined under 
                section 63(b) with respect to the taxpayer for the 
                taxable year in which such levy occurs, divided by''.
                    (KK) Section 7703(b)(1) is amended by striking 
                ``with respect to whom such individual is entitled to a 
                deduction for the taxable year under section 151 (or 
                would be so entitled but for section 152(e))'' and 
                inserting ``who is a dependent (within the meaning of 
                section 152) of the individual for the taxable year''.
            (4) Amendments relating to payroll withholding.--
                    (A) In general.--Paragraph (1) of section 3402(f) 
                is amended by striking subparagraph (A) and all that 
                follows and inserting the following:
                    ``(A) an exemption equal to the family allowance 
                exemption amount; and
                    ``(B) any allowance to which the employee is 
                entitled under subsection (m), but only if the 
                employee's spouse does not have in effect a withholding 
                exemption certificate claiming such allowance.''.
                    (B) Family allowance exemption amount.--Subsection 
                (f) of section 3402 is amended--
                            (i) by redesignating paragraphs (2), (3), 
                        (4), (5), (6), and (7) as paragraphs (3), (4), 
                        (5), (6), (7), and (8), respectively,
                            (ii) by striking ``paragraph (2)(C)'' in 
                        paragraph (3)(B)(iii) and inserting ``paragraph 
                        (3)(C)'', and
                            (iii) by inserting after paragraph (1) the 
                        following new paragraph:
            ``(2) Family allowance exemption amount.--For purposes of 
        this section--
                    ``(A) In general.--Except as provided in 
                subparagraphs (B) and (C), the term `family allowance 
                exemption amount' means the family allowance amount 
                with respect to the taxpayer under section 63(b) for 
                the taxable year in which the payroll period begins, 
                prorated to the payroll period.
                    ``(B) Married employees.--If the employee is 
                married filing jointly and the employee's spouse is an 
                employee receiving wages, the employee and the 
                employee's spouse may divide the family allowance 
                amount determined under section 63(b) in the proportion 
                of their choice for purposes of this paragraph, but the 
                sum of the family allowance exemption amounts claimed 
                by the employee and the employee's spouse shall not 
                exceed such family allowance amount.
                    ``(C) Employees with more than 1 employer.--In the 
                case of an employee that has withholding exemption 
                certificates in effect with respect to more than 1 
                employer, the employee may divide the family allowance 
                amount (or the employee's share of such amount after 
                the application of subparagraph (B), if applicable) 
                determined under section 63(b) among employers in the 
                proportion of the employee's choice for purposes of 
                this paragraph, but the sum of the family allowance 
                exemption amounts claimed by the employee with respect 
                to all employers shall not exceed such family allowance 
                amount (or the employee's share of such amount after 
                the application of subparagraph (B), if applicable).''.
                    (C) Conforming amendments.--
                            (i) Paragraph (2) of section 3402(a) is 
                        amended by striking ``the number of withholding 
                        exemptions claimed'' and all that follows and 
                        inserting ``the total amount of the withholding 
                        exemptions claimed.''.
                            (ii) Paragraph (3) of section 3402(f), as 
                        redesignated by subparagraph (B)(i) of this 
                        paragraph, is amended--
                                    (I) by striking ``the number of 
                                withholding exemptions'' and all that 
                                follows in subparagraph (A) and 
                                inserting ``the total amount of the 
                                withholding exemptions which the 
                                employee claims, which shall in no 
                                event exceed the amount to which the 
                                employee is entitled.'',
                                    (II) by striking ``the number of 
                                withholding exemptions'' each place it 
                                appears in subparagraphs (B) and (C) 
                                and inserting ``the total amount of the 
                                withholding exemptions'',
                                    (III) by striking ``the number to 
                                which he is entitled'' each place it 
                                appears in subparagraph (B) and 
                                inserting ``the amount to which the 
                                employee is entitled'',
                                    (IV) by striking ``the number to 
                                which the employee is entitled'' in 
                                subparagraph (C) and inserting ``the 
                                amount to which the employee is 
                                entitled'', and
                                    (V) by striking ``the number to 
                                which he will be, or reasonably may be 
                                expected to be, so entitled'' in 
                                subparagraph (C) and inserting ``the 
                                amount to which the employee will be, 
                                or reasonably may be expected to be, so 
                                entitled''.
                            (iii) Paragraph (7) of section 3402(f), as 
                        redesignated by subparagraph (B)(i) of this 
                        paragraph, is amended by striking ``shall be 
                        entitled to only one withholding exemption'' 
                        and inserting ``shall be treated as single or 
                        married filing separately for purposes of 
                        determining the family allowance exemption 
                        amount''.
                            (iv) Paragraph (8) of section 3402(f), as 
                        redesignated by subparagraph (B)(i) of this 
                        paragraph, is amended by inserting ``, except 
                        as provided in paragraph (2)(C)'' after ``with 
                        respect to one employer''.
                            (v) Paragraph (3) of section 3402(m) is 
                        amended by striking ``deductions (including the 
                        additional standard deduction under section 
                        63(c)(3) for the aged and blind)'' and 
                        inserting ``deductions''.
                            (vi) Paragraph (2) of section 3402(r) is 
                        amended striking ``the sum of'' and all that 
                        follows and inserting ``the family allowance 
                        amount determined under section 63(b) for a 
                        taxpayer who is single or married filing 
                        separately.''.
                            (vii) Section 6040(4) is amended by 
                        striking ``section 3402(f)(2), (3), (4), and 
                        (5)'' and inserting ``paragraphs (3), (4), (5), 
                        and (6) of section 3402(f)''.
    (c) Conforming Amendments.--
            (1) Section 1(f)(6) is amended--
                    (A) by striking ``63(c)(4)'' each place it appears 
                and inserting ``63(b)(3)'', and
                    (B) by inserting ``, subsection (g)(4)(B)'' after 
                ``paragraph (2)(A)'' in subparagraph (A).
            (2) Section 1(g)(4) is amended--
                    (A) by striking clause (ii) of subparagraph (A) and 
                inserting the following:
                            ``(ii) the sum of--
                                    ``(I) $500, plus
                                    ``(II) the greater of the amount 
                                described in subclause (I) or the 
                                amount of the itemized deductions 
                                allowed by this chapter which are 
                                directly connected with the production 
                                of the portion of adjusted gross income 
                                referred to in clause (i).'', and
                    (B) by redesignating subparagraphs (B) and (C) as 
                subparagraphs (C) and (D), respectively, and inserting 
                after subparagraph (A) the following new subparagraph:
                    ``(B) Adjustment for inflation.--In the case of any 
                taxable year beginning in a calendar year after 1988, 
                the $500 amount in subparagraph (A)(ii)(I) shall be 
                increased by an amount equal to--
                            ``(i) such dollar amount, multiplied by
                            ``(ii) the cost-of-living adjustment 
                        determined under subsection (f)(3) for the 
                        calendar year in which the taxable year begins, 
                        by substituting `calendar year 1987' for 
                        `calendar year 1992' in subparagraph (B) 
                        thereof.''.
            (3) Section 3(a) is amended to read as follows:
    ``(a)(1) In General.--In lieu of the tax imposed by section 1, 
there is hereby imposed for each taxable year on the taxable income of 
every individual whose taxable income does not exceed the ceiling 
amount a tax determined under tables, applicable to such taxable year, 
which shall be prescribed by the Secretary and which shall be in such 
form as the Secretary determines appropriate. In the table so 
prescribed, the amounts of the tax shall be computed on the basis of 
the rates prescribed by section 1.
    ``(2) Ceiling Amount Defined.--For purposes of paragraph (1), the 
term `ceiling amount' means, with respect to any taxpayer, the amount 
(not less than $20,000) determined by the Secretary for the tax rate 
category in which such taxpayer falls.''.
            (4) Section 861(b) is amended by striking the last 
        sentence.
            (5) Section 862(b) is amended by striking the last 
        sentence.
            (6) Section 1398(c) is amended--
                    (A) by striking paragraph (3) and inserting the 
                following:
            ``(3) Family allowance amount.--The family allowance amount 
        under section 63(b) taken into account for the estate for the 
        taxable year shall be the same as for a taxpayer who is single 
        or married filing separately.'', and
                    (B) by striking ``Basic Standard Deduction'' in the 
                heading and inserting ``Family Allowance Amount''.
            (7) Section 6212(c)(2) is amended by striking subparagraph 
        (A) and by redesignating subparagraphs (B) and (C) as 
        subparagraphs (A) and (B), respectively.
            (8) Section 6014(b)(4) is amended by striking 
        ``deductions'' and all that follows and inserting 
        ``deductions.''.
            (9) Section 6504 is amended by striking paragraph (2) and 
        by redesignating paragraphs (3), (4), (5), (6), (7), (8), (9), 
        (10), and (11) as paragraphs (2), (3), (4), (5), (6), (7), (8), 
        (9), and (10), respectively.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2015.

SEC. 203. REPEAL OF LIMITATIONS RELATING TO ITEMIZED DEDUCTIONS.

    (a) In General.--Sections 67 and 68 are repealed.
    (b) Conforming Amendments.--
            (1) Section 162(o) is amended by striking paragraph (2) and 
        redesignating paragraph (3) as paragraph (2).
            (2) Section 164(b)(5)(H)(ii) is amended--
                    (A) by striking the comma at the end of subclause 
                (I) and inserting ``, and'',
                    (B) by striking ``, and'' at the end of subclause 
                (II) and inserting a period, and
                    (C) by striking subclause (III).
            (3) Section 302(b)(5) is amended by inserting ``, as in 
        effect on December 31, 2015'' after ``67(c)(2)(B)''.
            (4) Section 562(c) is amended by inserting ``, as in effect 
        on December 31, 2015'' after ``67(c)(2)(B)''.
            (5) Section 642(b)(2)(C)(i)(II) is amended by inserting ``, 
        and as in effect on December 31, 2015'' after ``642(b)''.
            (6) Section 772(c)(3) is amended--
                    (A) by striking subparagraph (B), and
                    (B) by striking ``Income or loss from other 
                activities.--'' and all that follows through ``For 
                purposes of this chapter'' and inserting ``Income or 
                loss from other activities.--For purposes of this 
                chapter''.
            (7) Section 773(a)(3)(B) is amended by striking clause (i) 
        and by redesignating clauses (ii), (iii), and (iv) as clauses 
        (i), (ii), and (iii), respectively.
            (8) Section 773(b) is amended by striking paragraph (3).
            (9) Section 1411(a)(2)(B)(i) is amended by inserting ``, as 
        in effect on December 31, 2015'' after ``67(e)''.
            (10) Subparagraphs (C)(iii) and (D)(v) of section 
        6654(d)(1) are each amended by inserting ``, as in effect on 
        December 31, 2015'' before the period.
    (c) Effective Date.--The repeal and the amendments made by this 
section shall apply to taxable years beginning after December 31, 2015.

SEC. 204. TERMINATION OF SEPARATE TREATMENT OF CAPITAL GAINS.

    Subsection (h) of section 1 is amended by adding at the end the 
following new paragraph:
            ``(12) Termination.--This subsection shall not apply to any 
        taxable year beginning after December 31, 2015.''.

SEC. 205. REPEALS.

    (a) In General.--The following provisions of the Internal Revenue 
Code of 1986 are repealed:
            (1) Subpart A of part IV of subchapter A of chapter 1 
        (relating to nonrefundable personal credits).
            (2) Subpart B of part IV of subchapter A of chapter 1 
        (relating to other credits), other than section 27 (relating to 
        taxes of foreign countries and possessions of the United 
        States; possession tax credit).
            (3) Subpart C of part IV of subchapter A of chapter 1 
        (relating to refundable credits), other than sections 32 
        (relating to earned income) and 36B (relating to refundable 
        credit for coverage under a qualified health plan).
            (4) Part VI of subchapter A of chapter 1 (relating to 
        alternative minimum tax).
            (5) Section 217 (relating to moving expenses).
            (6) Section 221 (relating to interest on education loans).
            (7) Section 222 (relating to qualified tuition and related 
        expenses).
            (8) Chapter 2A (relating to unearned income medicare 
        contribution).
    (b) Effective Date.--The repeals made by subsection (a) shall take 
effect for taxable years beginning after December 31, 2015.

SEC. 206. ESTABLISHMENT OF PROGRESSIVE TAX REBATE.

    (a) In General.--Section 32 is amended to read as follows:

``SEC. 32. PROGRESSIVE TAX REBATE.

    ``(a) Allowance of Credit.--In the case of an eligible taxpayer, 
there shall be allowed as a credit against the tax imposed by this 
subtitle for the taxable year an amount equal to the sum of--
            ``(1) the earned income amount (as determined under 
        subsection (b)),
            ``(2) the child benefit amount (as determined under 
        subsection (c)), plus
            ``(3) the additional child benefit amount (as determined 
        under subsection (d)).
    ``(b) Earned Income Amount.--
            ``(1) Single workers.--In the case of an eligible taxpayer 
        (other than a head of a household as defined in section 2(b)) 
        who is not filing a joint return for the taxable year under 
        section 6013, the earned income amount shall be equal to--
                    ``(A) in the case of a taxpayer whose earned income 
                for the taxable year does not exceed $6,100, 25.1 
                percent of such earned income,
                    ``(B) in the case of a taxpayer whose earned income 
                for the taxable year exceeds $6,100 but does not exceed 
                $9,000, $1,530 plus 17.1 percent of such earned income 
                in excess of $6,100,
                    ``(C) in the case of a taxpayer whose earned income 
                (or, if greater, adjusted gross income) for the taxable 
                year exceeds $9,000, but does not exceed $49,494, 
                $2,025 minus 5 percent of such earned income or 
                adjusted gross income in excess of $9,000, or
                    ``(D) in the case of a taxpayer whose earned income 
                (or, if greater, adjusted gross income) for the taxable 
                year exceeds $49,494, $0.
            ``(2) Head of household.--In the case of an eligible 
        taxpayer who is a head of a household (as defined in section 
        2(b)), the earned income amount shall be equal to--
                    ``(A) in the case of a taxpayer whose earned income 
                for the taxable year does not exceed $9,150, 25.1 
                percent of such earned income,
                    ``(B) in the case of a taxpayer whose earned income 
                for the taxable year exceeds $9,150 but does not exceed 
                $13,500, $2,294 plus 17.1 percent of such earned income 
                in excess of $9,150,
                    ``(C) in the case of a taxpayer whose earned income 
                (or, if greater, adjusted gross income) for the taxable 
                year exceeds $13,500, but does not exceed $74,241, 
                $3,037 minus 5 percent of such earned income or 
                adjusted gross income in excess of $13,500, or
                    ``(D) in the case of a taxpayer whose earned income 
                (or, if greater, adjusted gross income) for the taxable 
                year exceeds $74,241, $0.
            ``(3) Married filing jointly.--In the case of an eligible 
        taxpayer filing a joint return under section 6013, the earned 
        income amount shall be determined pursuant to paragraph (1), 
        except that the dollar amounts in effect under such paragraph 
        shall be multiplied by 2.
    ``(c) Child Benefit Amount.--
            ``(1) In general.--In the case of an eligible taxpayer with 
        a qualifying child, the child benefit amount shall be equal to 
        15 percent of the earned income of such taxpayer for the 
        taxable year.
            ``(2) Limitations.--
                    ``(A) Limitation based on number of children.--The 
                child benefit amount determined under paragraph (1) 
                shall not exceed an amount equal to the product of--
                            ``(i) the number of qualifying children of 
                        the taxpayer, multiplied by
                            ``(ii) $1,590.
                    ``(B) Reduction based on earnings or adjusted gross 
                income.--The child benefit amount determined under this 
                subsection (as determined after application of 
                subparagraph (A)) shall be reduced (but not below zero) 
                by an amount equal to 5 percent of the earned income 
                (or, if greater, the adjusted gross income) of the 
                taxpayer for the taxable year in excess of $75,000 
                ($110,000 in the case of a joint return).
    ``(d) Additional Child Benefit Amount.--
            ``(1) In general.--In the case of an eligible taxpayer with 
        a qualifying child, the additional child benefit amount shall 
        be equal to--
                    ``(A) in the case of a taxpayer whose earned income 
                for the taxable year does not exceed $20,000, the 
                applicable percentage of such earned income,
                    ``(B) in the case of a taxpayer whose earned income 
                exceeds $20,000 but does not exceed $25,000, the 
                applicable percentage of $20,000,
                    ``(C) in the case of a taxpayer whose earned income 
                (or, if greater, adjusted gross income) exceeds $25,000 
                but does not exceed the applicable amount, an amount 
                equal to--
                            ``(i) the applicable percentage of $20,000, 
                        minus
                            ``(ii) 15 percent of such earned income or 
                        adjusted gross income in excess of $25,000, or
                    ``(D) in the case of a taxpayer whose earned income 
                (or, if greater, adjusted gross income) exceeds the 
                applicable amount, $0.
            ``(2) Applicable percentage.--For purposes of paragraph 
        (1), the applicable percentage is--
                    ``(A) in the case of a taxpayer with 1 qualifying 
                child, 11 percent,
                    ``(B) in the case of a taxpayer with 2 qualifying 
                children, 17 percent, and
                    ``(C) in the case of a taxpayer with 3 or more 
                qualifying children, 19 percent.
            ``(3) Applicable amount.--For purposes of paragraph (1), 
        the applicable amount is--
                    ``(A) in the case of a taxpayer with 1 qualifying 
                child, $39,667,
                    ``(B) in the case of a taxpayer with 2 qualifying 
                children, $47,667, and
                    ``(C) in the case of a taxpayer with 3 or more 
                qualifying children, $50,333.
    ``(e) Eligible Taxpayer.--
            ``(1) In general.--The term `eligible taxpayer' means an 
        individual--
                    ``(A) whose principal place of abode is in the 
                United States for more than one-half of such taxable 
                year, and
                    ``(B) is not a dependent (as defined under section 
                152) to another taxpayer for any taxable year beginning 
                in the same calendar year as such taxable year.
            ``(2) Qualifying child ineligible.--If an individual is the 
        qualifying child of a taxpayer for any taxable year of such 
        taxpayer beginning in a calendar year, such individual shall 
        not be treated as an eligible taxpayer for any taxable year of 
        such individual beginning in such calendar year.
            ``(3) Exception for taxpayer claiming benefits under 
        section 911.--The term `eligible taxpayer' does not include any 
        taxpayer who claims the benefits of section 911 for the taxable 
        year.
            ``(4) Limitation on eligibility of nonresident aliens.--The 
        term `eligible taxpayer' shall not include any individual who 
        is a nonresident alien individual for any portion of the 
        taxable year unless such individual is treated for such taxable 
        year as a resident of the United States for purposes of this 
        chapter by reason of an election under subsection (g) or (h) of 
        section 6013.
            ``(5) Identification number requirement.--No credit shall 
        be allowed under this section to an eligible taxpayer who does 
        not include on the return of tax for the taxable year--
                    ``(A) such individual's taxpayer identification 
                number, and
                    ``(B) if the individual is married (within the 
                meaning of section 7703), the taxpayer identification 
                number of such individual's spouse.
            ``(6) Taxpayers who do not include tin, etc., of any 
        qualifying child.--No credit shall be allowed under this 
        section to any eligible taxpayer who has one or more qualifying 
        children if no qualifying child of such taxpayer is taken into 
        account under subsection (c) or (d) by reason of subsection 
        (f)(4).
            ``(7) Treatment of military personnel stationed outside of 
        the united states.--For purposes of paragraph (1)(A) and 
        subsection (f)(3), the principal place of abode of a member of 
        the Armed Forces of the United States shall be treated as in 
        the United States during any period during which such member is 
        stationed outside the United States while serving on extended 
        active duty with the Armed Forces of the United States. For 
        purposes of the preceding sentence, the term `extended active 
        duty' means any period of active duty pursuant to a call or 
        order to such duty for a period in excess of 90 days or for an 
        indefinite period.
            ``(8) Joint return.--
                    ``(A) Married individuals.--In the case of an 
                individual who is married (within the meaning of 
                section 7703), this section shall apply only if a joint 
                return is filed for the taxable year under section 
                6013.
                    ``(B) Other.--In the case of taxpayer filing a 
                joint return under section 6013, such taxpayer shall 
                not be treated as an eligible taxpayer for purposes of 
                this section unless either the taxpayer or the 
                taxpayer's spouse satisfies each of the requirements 
                under this subsection.
    ``(f) Qualifying Child.--
            ``(1) In general.--The term `qualifying child' means a 
        qualifying child of the taxpayer (as defined in section 152(c), 
        determined without regard to paragraph (1)(D) thereof and 
        section 152(e)).
            ``(2) Married individual.--The term `qualifying child' 
        shall not include an individual who is married as of the close 
        of the eligible taxpayer's taxable year unless the individual 
        qualifies as a dependent (as defined under section 152) of the 
        taxpayer for such taxable year.
            ``(3) Place of abode.--For purposes of paragraph (1), the 
        requirements of section 152(c)(1)(B) shall be met only if the 
        principal place of abode is in the United States.
            ``(4) Identification requirements.--
                    ``(A) In general.--A qualifying child shall not be 
                taken into account under subsection (c) or (d) unless 
                the taxpayer includes the name, age, and TIN of the 
                qualifying child on the return of tax for the taxable 
                year.
                    ``(B) Other methods.--The Secretary may prescribe 
                other methods for providing the information described 
                in subparagraph (A).
    ``(g) Earned Income.--
            ``(1) In general.--The term `earned income' means--
                    ``(A) wages, salaries, tips, and other employee 
                compensation, but only if such amounts are includible 
                in gross income for the taxable year, plus
                    ``(B) the amount of the taxpayer's net earnings 
                from self-employment for the taxable year (within the 
                meaning of section 1402(a)), but such net earnings 
                shall be determined with regard to the deduction 
                allowed to the taxpayer by section 164(f).
            ``(2) Special rules.--For purposes of paragraph (1)--
                    ``(A) no amount received as a pension or annuity 
                shall be taken into account,
                    ``(B) no amount to which section 871(a) applies 
                (relating to income of nonresident alien individuals 
                not connected with United States business) shall be 
                taken into account,
                    ``(C) no amount received for services provided by 
                an individual while the individual is an inmate at a 
                penal institution shall be taken into account,
                    ``(D) no amount described in paragraph (1) received 
                for service performed in work activities as defined in 
                paragraph (4) or (7) of section 407(d) of the Social 
                Security Act to which the taxpayer is assigned under 
                any State program under part A of title IV of such Act 
                shall be taken into account, but only to the extent 
                such amount is subsidized under such State program, and
                    ``(E) a taxpayer may elect to treat amounts 
                excluded from gross income by reason of section 112 as 
                earned income.
    ``(h) Taxable Year Must Be Full Taxable Year.--Except in the case 
of a taxable year closed by reason of the death of the eligible 
taxpayer, no credit shall be allowable under this section in the case 
of a taxable year covering a period of less than 12 months.
    ``(i) Coordination With Certain Means-Tested Programs.--For 
purposes of--
            ``(1) the United States Housing Act of 1937,
            ``(2) title V of the Housing Act of 1949,
            ``(3) section 101 of the Housing and Urban Development Act 
        of 1965,
            ``(4) sections 221(d)(3), 235, and 236 of the National 
        Housing Act, and
            ``(5) the Food and Nutrition Act of 2008,
any refund made to a taxpayer by reason of this section shall not be 
treated as income (and shall not be taken into account in determining 
resources for the month of its receipt and the following month).
    ``(j) Amount of Credit To Be Determined Under Tables.--The amount 
of the credit allowed by this section shall be determined under tables 
prescribed by the Secretary.
    ``(k) Denial of Credit for Individuals Having Excessive Investment 
Income.--
            ``(1) In general.--No credit shall be allowed under 
        subsection (a) for the taxable year if the aggregate amount of 
        disqualified income of the taxpayer for the taxable year 
        exceeds $5,000.
            ``(2) Disqualified income.--For purposes of paragraph (1), 
        the term `disqualified income' means--
                    ``(A) interest or dividends to the extent 
                includible in income for the taxable year,
                    ``(B) interest received or accrued during the 
                taxable year which is exempt from tax imposed by this 
                chapter,
                    ``(C) the excess (if any) of--
                            ``(i) gross income from rents or royalties 
                        not derived in the ordinary course of a trade 
                        or business, over
                            ``(ii) the sum of--
                                    ``(I) the deductions (other than 
                                interest) which are clearly and 
                                directly allocable to such gross 
                                income, plus
                                    ``(II) interest deductions properly 
                                allocable to such gross income,
                    ``(D) the capital gain net income (as defined in 
                section 1222) of the taxpayer for such taxable year, 
                and
                    ``(E) the excess (if any) of--
                            ``(i) the aggregate income from all passive 
                        activities for the taxable year (determined 
                        without regard to any amount included in earned 
                        income under subsection (f) or described in a 
                        preceding subparagraph), over
                            ``(ii) the aggregate losses from all 
                        passive activities for the taxable year (as so 
                        determined).
            ``(3) Passive activity.--For purposes of paragraph (2)(E), 
        the term `passive activity' has the meaning given such term by 
        section 469.
    ``(l) Inflation Adjustments.--
            ``(1) In general.--In the case of any taxable year 
        beginning after 2015, each of the dollar amounts in subsections 
        (b), (c), (d), and (j)(1) shall each 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, determined by substituting 
                `calendar year 2014' for `calendar year 1992' in 
                subparagraph (B) thereof.
            ``(2) Rounding.--If any dollar amount in subsections (b), 
        (c), (d), and (j)(1), after being increased under paragraph 
        (1), is not a multiple of $100, such dollar amount shall be 
        rounded to the nearest multiple of $100.
    ``(m) Restrictions on Taxpayers Who Improperly Claimed Credit in 
Prior Year.--
            ``(1) Taxpayers making prior fraudulent or reckless 
        claims.--
                    ``(A) In general.--No credit shall be allowed under 
                this section for any taxable year in the disallowance 
                period.
                    ``(B) Disallowance period.--For purposes of 
                subparagraph (A), the disallowance period is--
                            ``(i) the period of 10 taxable years after 
                        the most recent taxable year for which there 
                        was a final determination that the taxpayer's 
                        claim of credit under this section was due to 
                        fraud, and
                            ``(ii) the period of 2 taxable years after 
                        the most recent taxable year for which there 
                        was a final determination that the taxpayer's 
                        claim of credit under this section was due to 
                        reckless or intentional disregard of rules and 
                        regulations (but not due to fraud).
            ``(2) Taxpayers making improper prior claims.--In the case 
        of a taxpayer who is denied credit under this section for any 
        taxable year as a result of the deficiency procedures under 
        subchapter B of chapter 63, no credit shall be allowed under 
        this section for any subsequent taxable year unless the 
        taxpayer provides such information as the Secretary may require 
        to demonstrate eligibility for such credit.''.
    (b) Conforming Amendments.--
            (1) Section 86(f)(2) is amended by striking ``section 
        32(c)(2)'' and inserting ``section 32(g)''.
            (2) Section 129(e)(2) is amended by striking ``section 
        32(c)(2)'' and inserting ``section 32(g)''.
            (3) Section 6213(g)(2) is amended--
                    (A) in subparagraph (G), by striking ``section 
                32(c)(2)(A)'' and inserting ``section 32(g)(1)'', and
                    (B) in subparagraph (K), by striking ``section 
                32(k)(2)'' and inserting ``section 32(m)(2)''.
            (4) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting ``32,'' after ``25A,''.
            (5) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 of subtitle A is amended by striking 
        the item relating to section 32 and inserting the following:

``Sec. 32. Progressive tax rebate.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2015.

SEC. 207. TECHNICAL AND CONFORMING AMENDMENTS.

    The Secretary of the Treasury or the Secretary's delegate shall, 
not later than 90 days after the date of the enactment of this Act, 
submit to the Committee on Ways and Means of the House of 
Representatives and the Committee on Finance of the Senate a draft of 
any technical and conforming changes in the Internal Revenue Code of 
1986 which are necessary to reflect throughout such Code the purposes 
of the provisions of, and amendments made by, this title.

                   Subtitle B--Corporate Tax Reforms

SEC. 211. CORPORATE INCOME TAX RATE REDUCTION.

    (a) In General.--Subsection (b) of section 11 is amended to read as 
follows:
    ``(b) Amount of Tax.--The amount of the tax imposed by subsection 
(a) shall be an amount equal to 17 percent of the taxable income.''.
    (b) Conforming Amendment.--Section 1551 is amended--
            (1) by striking ``benefits of the graduated corporate rates 
        and'' in the heading,
            (2) by striking ``the benefits of the rates contained in 
        section 11(b) which are lower than the highest rate specified 
        in such section, or'' in subsection (a), and
            (3) by striking ``such benefits or credit'' in subsection 
        (a) and inserting ``such credit''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2015.

          TITLE III--REFUND OF EXCESS CONSUMPTION TAX REVENUE

SEC. 301. REFUNDS OF EXCESS CONSUMPTION TAX REVENUE.

    (a) In General.--Subchapter B of chapter 65 is amended by adding at 
the end the following new section:

``SEC. 6433. REFUNDS OF EXCESS CONSUMPTION TAX REVENUE.

    ``(a) In General.--In the case of any qualifying excess consumption 
tax revenue year, the Secretary shall pay to each eligible filer an 
amount equal to the consumption tax refund amount.
    ``(b) Qualifying Excess Consumption Tax Revenue Year.--For purposes 
of this section--
            ``(1) In general.--The term `qualifying excess consumption 
        tax revenue year' means any calendar year for which the net 
        consumption tax revenues exceed 10 percent of gross domestic 
        product for such year.
            ``(2) Net consumption tax revenues.--The net consumption 
        tax revenues for any calendar year shall be the excess of--
                    ``(A) the tax imposed under section 3901 with 
                respect to taxable supplies the tax point for which is 
                during such calendar year, over
                    ``(B) the credits allowed under section 3916 for 
                such calendar year.
            ``(3) Gross domestic product.--The gross domestic product 
        for any calendar year shall be the last estimate of the gross 
        domestic product for such calendar year by the Department of 
        Commerce which is published before the date that is 3 months 
        after the close of such calendar year.
    ``(c) Eligible Filer.--For purposes of this section--
            ``(1) Definition.--
                    ``(A) In general.--The term `eligible filer' means, 
                with respect to any qualifying excess consumption tax 
                revenue year, any individual (other than an individual 
                described in paragraph (2)) who filed a return of 
                income tax for the individual's qualifying rebate 
                taxable year.
                    ``(B) Exclusion.--The term `eligible filer' shall 
                not include--
                            ``(i) any nonresident alien individual,
                            ``(ii) any individual who is a dependent 
                        (as defined in section 152) of another taxpayer 
                        for the individual's qualifying rebate taxable 
                        year, or
                            ``(iii) an estate or trust.
            ``(2) Qualifying rebate taxable year.--The term `qualifying 
        rebate taxable year' means, with respect to any individual in 
        connection with a qualifying excess consumption tax revenue 
        year, the taxable year of such individual which contains 6 or 
        more months of such qualifying excess consumption tax revenue 
        year.
            ``(3) Identification requirement.--
                    ``(A) In general.--An individual shall not be 
                treated as an eligible filer for any year unless such 
                individual includes on the return of tax for such 
                year--
                            ``(i) such individual's valid 
                        identification number,
                            ``(ii) in the case of a joint return, the 
                        valid identification number of such 
                        individual's spouse, and
                            ``(iii) the valid identification number of 
                        any qualifying child (as defined in section 
                        32(f)) claimed on such return.
                    ``(B) Valid identification number.--For purposes of 
                subparagraph (A), the term `valid identification 
                number' means a social security number issued to an 
                individual by the Social Security Administration. Such 
                term shall not include a TIN issued by the Internal 
                Revenue Service.
                    ``(C) Special rule for members of the armed 
                forces.--Subparagraph (A) shall not apply to a joint 
                return where at least 1 spouse was a member of the 
                Armed Forces of the United States at any time during 
                the taxable year.
    ``(d) Consumption Tax Refund Amount.--
            ``(1) In general.--The consumption tax refund amount for 
        any eligible filer for any qualifying excess consumption tax 
        year shall be the product of--
                    ``(A) the applicable amount, times
                    ``(B) the applicable shares of the eligible filer.
            ``(2) Applicable amount.--The applicable amount for any 
        qualifying excess revenue consumption tax year is an amount 
        equal to--
                    ``(A) the excess described in subsection (b)(1), 
                divided by
                    ``(B) the total number of applicable shares of all 
                eligible filers for such year.
            ``(3) Applicable share.--The number of applicable shares 
        for any eligible filer shall be the sum of--
                    ``(A) 1 (2 in the case of a joint return), plus
                    ``(B) \1/2\ of the number of qualifying children 
                (as defined in section 32(f)) claimed on the eligible 
                filer's return for the filer's qualifying rebate 
                taxable year.
    ``(e) Time for Payment.--Payments under subsection (a) shall be 
made as soon as practical after the Secretary has determined the 
consumption tax refund amount.''.
    (b) Conforming Amendments.--
            (1) Section 1324(b)(2) of title 31, United States Code, is 
        amended by striking ``or 6431'' and inserting ``6431, or 
        6433''.
            (2) The table of sections for subchapter B of chapter 65 is 
        amended by adding at the end the following new item:

``Sec. 6433. Refunds of excess consumption tax revenue.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to calendar years beginning after the date of the enactment of 
this Act.
                                 <all>