[Congressional Record Volume 146, Number 48 (Tuesday, April 25, 2000)]
[Senate]
[Pages S2874-S2875]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          AMENDMENT SUBMITTED

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                MARRIAGE TAX PENALTY RELIEF ACT OF 2000

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                  BAYH (AND OTHERS) AMENDMENT NO. 3102

  (Ordered to lie on the table)
  Mr. BAYH (for himself and Mr. Durbin, Mr. Johnson, Mrs. Feinstein, 
Ms. Landrieu, Mr. Edwards, and Mrs. Murray) submitted an amendment 
intended to be proposed by them to the bill (H.R. 6) to amend the 
Internal Revenue Code of 1986 to eliminate the marriage penalty by 
providing that the income tax rate bracket amounts, and the amount of 
the standard deduction, for joint returns shall be twice the amounts 
applicable to unmarried individuals; as follows:

       In lieu of the matter proposed to be inserted, insert the 
     following:

     SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.

       (a) Short Title.--This Act may be cited as the ``Targeted 
     Marriage Tax Penalty Relief Act of 2000''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in this Act an amendment or repeal is 
     expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of the Internal 
     Revenue Code of 1986.
       (c) Section 15 Not To Apply.--No amendment made by section 
     2 shall be treated as a change in a rate of tax for purposes 
     of section 15 of the Internal Revenue Code of 1986 .

     SEC. 2. MARRIAGE CREDIT.

       (a) In General.--Subpart A of part IV of subchapter A of 
     chapter 1 (relating to nonrefundable personal credits) is 
     amended by inserting after section 25A the following new 
     section:

     ``SEC. 25B. MARRIAGE CREDIT.

       ``(a) Allowance of Credit.--In the case of a joint return 
     under section 6013, there shall be allowed as a credit 
     against the tax imposed by this chapter for the taxable year 
     an amount equal to the lesser of the amount determined under 
     subsection (b) or (c) for the taxable year.
       ``(b) Amount Under Subsection (b).--For purposes of 
     subsection (a), the amount under this subsection for any 
     taxable year with respect to a taxpayer is determined in 
     accordance with the following table:

                                                                Amount:
``Taxable year:
  2001........................................................$500 ....

  2002........................................................$900 ....

  2003......................................................$1,300 ....

  2004 and thereafter.......................................$1,700.....

       ``(c) Determination of Amount.--
       ``(1) In general.--For purposes of subsection (a), the 
     amount determined under this subsection for any taxable year 
     with respect to a taxpayer is equal to the excess (if any) 
     of--
       ``(A) the joint tentative tax of such taxpayer for such 
     year, over
       ``(B) the combined tentative tax of such taxpayer for such 
     year.
       ``(2) Joint tentative tax.--For purposes of paragraph 
     (1)(A)--
       ``(A) In general.--The joint tentative tax of a taxpayer 
     for any taxable year is equal to the tax determined in 
     accordance with the

[[Page S2875]]

     table contained in section 1(a) on the joint tentative 
     taxable income of the taxpayer for such year.
       ``(B) Joint tentative taxable income.--For purposes of 
     subparagraph (A), the joint tentative taxable income of a 
     taxpayer for any taxable year is equal to the excess of--
       ``(i) the sum of--

       ``(I) the earned income (as defined in section 32(c)(2)) of 
     such taxpayer for such year, and
       ``(II) any income received as a pension or annuity which 
     arises from an employer-employee relationship (including any 
     social security benefit (as defined in section 86(d)(1)) 
     which is includible in gross income of such taxpayer for such 
     year, over

       ``(ii) the sum of--

       ``(I) either--

       ``(aa) the standard deduction determined under section 
     63(c)(2)(A)(i) for such taxpayer for such year, or
       ``(bb) in the case of an election under section 63(e), the 
     total itemized deductions determined under section 63(d) for 
     such taxpayer for such year, and

       ``(II) the total exemption amount for such taxpayer for 
     such year determined under section 151.

       ``(3) Combined tentative tax.--For purposes of paragraph 
     (1)(A)--
       ``(A) In general.--The combined tentative tax of a taxpayer 
     for any taxable year is equal to the sum of the taxes 
     determined in accordance with the table contained in section 
     1(c) on the individual tentative taxable income of each 
     spouse for such year.
       ``(B) Individual tentative taxable income.--For purposes of 
     subparagraph (A), the individual tentative taxable income of 
     a spouse for any taxable year is equal to the excess of--
       ``(i) the sum of--

       ``(I) the earned income (as defined in section 32(c)(2)) of 
     such spouse for such year, and
       ``(II) any income received as a pension or annuity which 
     arises from an employer-employee relationship (including any 
     social security benefit (as defined in section 86(d)(1)) 
     which is includible in gross income of such spouse for such 
     year, over

       ``(ii) the sum of--

       ``(I) either--

       ``(aa) the standard deduction determined under section 
     63(c)(2)(C) for such spouse for such year, or
       ``(bb) in the case of an election under section 63(e), one-
     half of the total itemized deductions determined under 
     paragraph (2)(B)(ii)(I)(bb) for such spouse for such year, 
     and

       ``(II) one-half of the total exemption amount determined 
     under paragraph (2)(B)(ii)(II) for such year.

       ``(C) Includible social security benefit.--For purposes of 
     subparagraph (B)(i)(II), the amount of social security 
     benefit (as so defined) which is includible in gross income 
     of a spouse for any taxable year is equal to--
       ``(i) the amount which bears the same ratio to the amount 
     of social security benefit determined under paragraph 
     (2)(B)(i)(II) for such year, as
       ``(ii) such spouse's total social security benefit for such 
     year bears to the total social security benefit for both 
     spouses for such year.
       ``(d) Phaseout of Credit.--
       ``(1) In general.--The amount which would (but for this 
     subsection) be taken into account under subsection (a) shall 
     be reduced (but not below zero) by the amount determined 
     under paragraph (2).
       ``(2) Amount of reduction.--The amount determined under 
     this paragraph is the amount which bears the same ratio to 
     the amount which would be so taken into account as--
       ``(A) the excess of--
       ``(i) the taxpayer's adjusted gross income for such taxable 
     year, over
       ``(ii) $120,000, bears to
       ``(B) $20,000.
       ``(e) Inflation Adjustment.--
       ``(1) In general.--In the case of any taxable year 
     beginning after 2004, the $1,700 amount referred to in 
     subsection (b) and the $120,000 amount referred to in 
     subsection (d)((2)(A)(ii) 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 `2003' for `1992'.
       ``(2) Rounding.--If the $1,700 amount (as so referred) and 
     the $120,000 amount (as so referred) as adjusted under 
     paragraph (1) is not a multiple of $25 and $50, respectively, 
     such amount shall be rounded to the nearest multiple of $25 
     and $50, respectively.''.
       (b) Conforming Amendment.--The table of sections for 
     subpart A of part IV of subchapter A of chapter 1 is amended 
     by inserting after the item relating to section 25A the 
     following new item:

``Sec. 25B. Marriage credit.''
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2000.

     SEC. 3. MARRIAGE PENALTY RELIEF FOR EARNED INCOME CREDIT.

       (a) In General.--Section 32(b) (relating to percentages and 
     amounts) is amended--
       (1) by striking ``Percentages.--The credit'' in paragraph 
     (1) and inserting ``Percentages.--
       ``(A) In general.--Subject to subparagraph (B), the 
     credit'',
       (2) by adding at the end of paragraph (1) the following new 
     subparagraph:
       ``(B) Joint returns.--In the case of a joint return, the 
     phaseout percentage determined under subparagraph (A)--
       ``(i) in the case of an eligible individual with 1 
     qualifying child shall be decreased by 1.87 percentage 
     points, and
       ``(ii) in the case of an eligible individual with 2 or more 
     qualifying child shall be decreased by 2.01 percentage 
     points.'',
       (3) by striking ``amounts.--The earned'' in paragraph (2) 
     and inserting ``amounts.--
       ``(A) In general.--Subject to subparagraph (B), the 
     earned'', and
       (4) by adding at the end the following new subparagraph:
       ``(B) Joint returns.--In the case of a joint return, the 
     phaseout amount determined under subparagraph (A) shall be 
     increased by $2,000.''.
       (b) Inflation Adjustment.--Paragraph (1)(B) of section 
     32(j) (relating to inflation adjustments) is amended to read 
     as follows:
       ``(B) the cost-of-living adjustment determined under 
     section 1(f)(3) for the calendar year in which the taxable 
     year begins, determined--
       ``(i) in the case of amounts in subsections (b)(2)(A) and 
     (i)(1), by substituting `calendar year 1995' for `calendar 
     year 1992' in subparagraph (B) thereof, and
       ``(ii) in the case of the $2,000 amount in subsection 
     (b)(2)(B), by substituting `calendar year 2000' for `calendar 
     year 1992' in subparagraph (B) of such section 1.''.
       (c) Rounding.--Section 32(j)(2)(A) (relating to rounding) 
     is amended by striking ``subsection (b)(2)'' and inserting 
     ``subsection (b)(2)(A) (after being increased under 
     subparagraph (B) thereof)''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2000.

     SEC. 4. PRESERVE FAMILY TAX CREDITS FROM THE ALTERNATIVE 
                   MINIMUM TAX.

       (a) In General.--Subsection (a) of section 26 of the 
     Internal Revenue Code of 1986 (relating to limitation based 
     on tax liability; definition of tax liability) is amended to 
     read as follows:
       ``(a) Limitation Based on Amount of Tax.--The aggregate 
     amount of credits allowed by this subpart for the taxable 
     year shall not exceed the sum of--
       ``(1) the taxpayer's regular tax liability for the taxable 
     year reduced by the foreign tax credit allowable under 
     section 27(a), and
       ``(2) the tax imposed for the taxable year by section 
     55(a).''.
       (b) Conforming Amendments.--
       (1) Subsection (d) of section 24 of such Code is amended by 
     striking paragraph (2) and by redesignating paragraph (3) as 
     paragraph (2).
       (2) Section 32 of such Code is amended by striking 
     subsection (h).
       (3) Section 904 of such Code is amended by striking 
     subsection (h) and by redesignating subsections (i), (j), and 
     (k) as subsections (h), (i), and (j), respectively.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

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