[Congressional Record Volume 158, Number 112 (Wednesday, July 25, 2012)]
[Senate]
[Pages S5352-S5357]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
MIDDLE CLASS TAX CUT ACT
The PRESIDING OFFICER. The clerk will state the bill by title.
The bill clerk read as follows:
A bill (S. 3412) to amend the Internal Revenue Code of 1986
to provide tax relief to middle-class families.
The PRESIDING OFFICER. The Senator from Utah.
Amendment No. 2573
Mr. HATCH. Madam President, I call up amendment No. 2573 and ask for
its immediate consideration.
The PRESIDING OFFICER. The clerk will report.
The bill clerk read as follows:
The Senator from Utah [Mr. Hatch], for himself and Mr.
McConnell, proposes an amendment numbered 2573.
The amendment is as follows:
(Purpose: In the nature of a substitute)
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Tax Hike Prevention Act of
2012''.
SEC. 2. TEMPORARY EXTENSION OF 2001 TAX RELIEF.
(a) In General.--Section 901 of the Economic Growth and Tax
Relief Reconciliation Act of 2001 is amended by striking
``December 31, 2012'' both places it appears and inserting
``December 31, 2013''.
(b) Effective Date.--The amendment made by this section
shall take effect as if included in the enactment of the
Economic Growth and Tax Relief Reconciliation Act of 2001.
SEC. 3. TEMPORARY EXTENSION OF 2003 TAX RELIEF.
(a) In General.--Section 303 of the Jobs and Growth Tax
Relief Reconciliation Act of 2003 is amended by striking
``December 31, 2012'' and inserting ``December 31, 2013''.
(b) Effective Date.--The amendment made by this section
shall take effect as if included in the enactment of the Jobs
and Growth Tax Relief Reconciliation Act of 2003.
SEC. 4. ALTERNATIVE MINIMUM TAX RELIEF.
(a) Temporary Extension of Increased Alternative Minimum
Tax Exemption Amount.--
(1) In general.--Paragraph (1) of section 55(d) of the
Internal Revenue Code of 1986 is amended--
(A) by striking ``$72,450'' and all that follows through
``2011'' in subparagraph (A) and inserting ``$78,750 in the
case of taxable years beginning in 2012 and $79,850 in the
case of taxable years beginning in 2013'', and
(B) by striking ``$47,450'' and all that follows through
``2011'' in subparagraph (B) and inserting ``$50,600 in the
case of taxable years beginning in 2012 and $51,150 in the
case of taxable years beginning in 2013''.
(b) Temporary Extension of Alternative Minimum Tax Relief
for Nonrefundable Personal Credits.--
(1) In general.--Paragraph (2) of section 26(a) of the
Internal Revenue Code of 1986 is amended--
(A) by striking ``or 2011'' and inserting ``2011, 2012, or
2013'', and
(B) by striking ``2011'' in the heading thereof and
inserting ``2013''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2011.
SEC. 5. EXTENSION OF INCREASED EXPENSING LIMITATIONS AND
TREATMENT OF CERTAIN REAL PROPERTY AS SECTION
179 PROPERTY.
(a) In General.--
(1) Dollar limitation.--Section 179(b)(1) of the Internal
Revenue Code of 1986 is amended--
(A) by striking ``2010 or 2011,'' in subparagraph (B) and
inserting ``2010, 2011, 2012, or 2013, and'',
(B) by striking subparagraph (C),
(C) by redesignating subparagraph (D) as subparagraph (C),
and
[[Page S5353]]
(D) in subparagraph (C), as so redesignated, by striking
``2012'' and inserting ``2013''.
(2) Reduction in limitation.--Section 179(b)(2) of such
Code is amended--
(A) by striking ``2010 or 2011,'' in subparagraph (B) and
inserting ``2010, 2011, 2012, or 2013, and'',
(B) by striking subparagraph (C),
(C) by redesignating subparagraph (D) as subparagraph (C),
and
(D) in subparagraph (C), as so redesignated, by striking
``2012'' and inserting ``2013''.
(3) Conforming amendment.--Subsection (b) of section 179 of
such Code is amended by striking paragraph (6).
(b) Computer Software.--Section 179(d)(1)(A)(ii) of the
Internal Revenue Code of 1986 is amended by striking ``2013''
and inserting ``2014''.
(c) Election.--Section 179(c)(2) of the Internal Revenue
Code of 1986 is amended by striking ``2013'' and inserting
``2014''.
(d) Special Rules for Treatment of Qualified Real
Property.--
(1) In general.--Section 179(f)(1) of the Internal Revenue
Code of 1986 is amended by striking ``2010 or 2011'' and
inserting ``2010, 2011, 2012, or 2013''.
(2) Carryover limitation.--
(A) In general.--Section 179(f)(4) of such Code is amended
by striking ``2011'' each place it appears and inserting
``2013''.
(B) Conforming amendment.--The heading for subparagraph (C)
of section 179(f)(4) of such Code is amended by striking
``2010'' and inserting ``2010, 2011 and 2012''.
(e) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2011.
SEC. 6. INSTRUCTIONS FOR TAX REFORM.
(a) In General.--The Senate Committee on Finance shall
report legislation not later than 12 months after the date of
the enactment of this Act that consists of changes in laws
within its jurisdiction which meet the requirements of
subsection (b).
(b) Requirements.--Legislation meets the requirements of
this subsection if the legislation--
(1) simplifies the Internal Revenue Code of 1986 by
reducing the number of tax preferences and reducing
individual tax rates proportionally, with the highest
individual tax rate significantly below 35 percent;
(2) permanently repeals the alternative minimum tax;
(3) is projected, when compared to the current tax policy
baseline, to be revenue neutral or result in revenue losses;
(4) has a dynamic effect which is projected to stimulate
economic growth and lead to increased revenue;
(5) applies any increased revenue from stimulated economic
growth to additional rate reductions and does not permit any
such increased revenue to be used for additional Federal
spending;
(6) retains a progressive tax code; and
(7) provides for revenue-neutral reform of the taxation of
corporations and businesses by--
(A) providing a top tax rate on corporations of no more
than 25 percent; and
(B) implementing a competitive territorial tax system.
Mr. HATCH. Madam President, I ask for the yeas and nays on the
amendment.
The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second.
The question is on agreeing to the amendment.
The clerk will call the roll.
The bill clerk called the roll.
Mr. KYL. The following Senator is necessarily absent: the Senator
from Illinois (Mr. Kirk).
The VICE PRESIDENT. Are there any other Senators in the Chamber
desiring to vote?
The result was announced--yeas 45, nays 54, as follows:
[Rollcall Vote No. 183 Leg.]
YEAS--45
Alexander
Ayotte
Barrasso
Blunt
Boozman
Burr
Chambliss
Coats
Coburn
Cochran
Corker
Cornyn
Crapo
DeMint
Enzi
Graham
Grassley
Hatch
Heller
Hoeven
Hutchison
Inhofe
Isakson
Johanns
Johnson (WI)
Kyl
Lee
Lugar
McCain
McConnell
Moran
Murkowski
Paul
Portman
Pryor
Risch
Roberts
Rubio
Sessions
Shelby
Snowe
Thune
Toomey
Vitter
Wicker
NAYS--54
Akaka
Baucus
Begich
Bennet
Bingaman
Blumenthal
Boxer
Brown (MA)
Brown (OH)
Cantwell
Cardin
Carper
Casey
Collins
Conrad
Coons
Durbin
Feinstein
Franken
Gillibrand
Hagan
Harkin
Inouye
Johnson (SD)
Kerry
Klobuchar
Kohl
Landrieu
Lautenberg
Leahy
Levin
Lieberman
Manchin
McCaskill
Menendez
Merkley
Mikulski
Murray
Nelson (NE)
Nelson (FL)
Reed
Reid
Rockefeller
Sanders
Schumer
Shaheen
Stabenow
Tester
Udall (CO)
Udall (NM)
Warner
Webb
Whitehouse
Wyden
NOT VOTING--1
Kirk
The amendment (No. 2573) was rejected.
The VICE PRESIDENT. The majority leader.
Mr. REID. Mr. President, the Republicans' tax hike on the middle
class has just been defeated. Their plan would have raised taxes by
about $1,000 for 25 million middle-class families while giving
millionaires an average of a $160,000 tax break. So let's look at that.
Their bill would have raised taxes on 25 million middle-class families
by about $1,000 a year, and it would have given millionaires a $160,000
tax break. Those numbers are staggering. Their bill would have raised
taxes on parents trying to pay for college, on families--especially
large families--with children. So it is no wonder a majority of
Senators opposed that legislation.
In just a short time there will be a bill that will pass cut taxes
for 98 percent of Americans, including every middle-class taxpayer and
more than 97 percent of small businesses. This plan, proposed by
President Obama, would cut taxes for 114 million American families.
Theirs raises taxes for 25 million middle-class families. This is the
only bill that has a chance of becoming law, so it is the only plan
that would actually give a middle-class family the security of avoiding
their fiscal cliff. The House should take up this legislation and pass
it.
President Obama believes we must keep taxes low for 98 percent of
Americans. Democrats agree. So do the majority of Americans. A majority
of Americans, including a majority of Republicans, around this country
believe taxes should remain low for the middle class but the top 2
percent should pay their fair share to reduce the debt. The bill the
Senate is about to pass respects the will of the American people,
including a majority of Republicans in America outside the Halls of
this Congress. Republican Members of Congress disagree with a majority
of Republicans.
The President, of course, has said he will sign the bill immediately.
But now Republicans are threatening to hide behind yet another arcane
procedural maneuver to stall this crucial legislation, and this will
get the attention of the American people. They are threatening to do
something called blue slip this because revenue-raising resolutions
must be originated in the House of Representatives. But my Republican
colleagues have very short memories. Senate Republicans are all too
happy to bypass the procedural hoop when it suits their purposes. They
are willing to go around it when it is time to reauthorize the FAA.
They were willing to sidestep it when we passed the Violence Against
Women Act. We did that here in the Senate. They were willing to dodge
it when we passed the Transportation bill that was so important to this
country. But now their excuse for stalling a tax cut for 98 percent of
the American people is an old procedural trick that the American people
do not understand, and rightfully so.
If Republicans in the House fail to act on this bill, taxes will rise
by $2,200 for the typical middle-class family of four. That is $2,200
less to spend on gas, groceries, rent, and life in general for these
people. This tax hike on ordinary families couldn't come at a worse
time--just as our economy is doing its utmost to get back on its feet.
Republicans should not force middle-class families off their fiscal
cliff to protect more wasteful giveaways to millionaires and
billionaires--an average of $160,000 a year per millionaire. Democrats
believe this country can't afford more budget-busting giveaways for the
top 2 percent of earners. Again, Republicans in America agree with us.
It is only here in the Senate that the Republicans don't agree. But
that is a debate we are willing to have, and the House Republicans need
not hold tax cuts for the middle class hostage in order to have that
debate. They can and should pass our middle-class tax cuts immediately.
Once we give middle-class families security, we can spend the next 5
months debating whether wealthy families need more tax breaks. We know
how the American people feel--just like we do.
The VICE PRESIDENT. The Republican leader.
[[Page S5354]]
Mr. McCONNELL. Mr. President, first let me welcome the Vice President
here today, our good friend who served for so many years in the Senate.
It reminds me of the negotiation he and I conducted in December of
2010. I got a call from the Vice President one day, and he said: The
President thought we ought to talk about the possibility of extending
the current tax rates for everyone because the economy is not doing
very well, and the worst thing we could do would be to raise taxes on
anyone in the middle of this economic situation.
I said: Mr. Vice President, I think that is something we would be
interested in.
So the Vice President and I negotiated for a period of time and
agreed that because the economy was not doing well in December 2010, we
ought to extend the current tax rates for everyone.
I can remember the signing ceremony. I was there. The majority leader
was not. The Speaker of the House was not. The President made a speech
in signing an extension of the current tax rates for everyone that I
could have made myself. Forty Members of the Senate on the Democratic
side voted for it.
Today, my colleagues, the economy is growing slower than it was in
December of 2010. So we know this is not about the economy; we know
this is about the election. We all know there is an election going on.
There is politics from time to time practiced here in the Senate. I am
not offended by that. But I think what the American people would like
to hear from us is a response to the economic situation.
This proposal guarantees that taxes will go up on roughly 1 million
of our most successful small businesses. Over 50 percent of small
business income--25 percent of the workforce--will be affected by it.
It guarantees that taxes will go up on capital gains, on dividends,
which provide the income for a huge number of our senior citizens. This
is a uniquely bad idea. It may poll well, as my friend the majority
leader indicated, but, of course, the fact that he needed to mention
that illustrates the point that this is more about the election than it
is about the economy.
So I would predict there will probably be bipartisan opposition to
this proposal. I am sure a few arms have been twisted in order to get
the result. The Vice President is at a disadvantage: he can't speak,
being an occupant of the chair. But in this particular instance, he is
actually better not to because he would have the dilemma of trying to
explain the difference between the economic situation the country
confronts today and the condition the country confronted in December of
2010 when the economy was doing better. So be grateful, I say to my
friend the Vice President. This is a debate I don't think you would
want to lead.
With that, my colleagues and friends, I urge a ``no'' vote on this
very, very bad idea for the U.S. economy.
The VICE PRESIDENT. The majority leader.
Mr. REID. Mr. President, in 2010 the country was staring at what had
taken place the prior 8 years--8 million jobs lost. What has happened
in the years since 2010 that my friend the Republican leader talks
about? This administration has created 4.5 million jobs. We haven't
filled the hole we lost during the 8 years of the prior President, but
we have made some progress. We all acknowledge we need to do more, but
don't ever compare today with 2010.
First of all, everyone understands, all you folks who love to give
tax cuts to the millionaires, our bill does that also. The first
$250,000 they make is treated just like a middle-class family.
I would also point everyone to this. I have talked about the
Republicans around the country supporting this legislation. Of course
they do. They know the deficit needs to be handled, and they know that
about $1 trillion is what our legislation will do to fill the hole of
the debt.
But also, people who are in this great country of ours who have done
so well understand that they are supposed to contribute more. They know
that. My friend doesn't like to hear polls, but let me give him another
one. Sixty-five percent of these really rich people are willing to pay
more taxes. Again, the people who are unwilling to do this are people
who signed a pledge for this person, Grover Norquist. And remember,
there was a little vacillating about a month ago, so he came up here
and had somebody renew their vows with him.
So we are on the side of the angels; we are on the side of the
American people because this legislation that is going to pass is what
is good for the American people. And I ask that we have that vote now.
Mr. McCONNELL addressed the Chair.
Mr. REID. Remember, I always get the last word.
Mr. McCONNELL. Let me briefly add that I listened carefully to what
my friend the majority leader said. He once again was making it clear
this is about the campaign. It is about the campaign and not about the
economy.
But if you listen carefully to the rhetoric, what he is saying here
is that these million businesses didn't create this success; that we
somehow need to take this money because we will spend it better on
their behalf.
Now, I know my colleague is going to get the last word, and that is
fine. I am happy for him to have it. But the fact is this: The economy
is in worse shape today than it was in December of 2010--worse shape
today. The growth rate is slower. The President signed this bill,
advocated its passage back then because the economy didn't need to get
hit with a big tax increase. The growth rate is slower today. The
economic situation remains largely the same. The worst we could do in
the middle of this economic condition is to pass this tax increase.
Now my friend the majority leader can have the last word, and then we
will be happy to go to a vote.
The VICE PRESIDENT. The majority leader.
Mr. REID. Mr. President, they may have different newspapers in
Kentucky than I read. I get my Nevada clips every day. I try to read
some papers from back home. We have now 28 months of job growth in the
private sector, 20 months in a row. That is pretty good.
This legislation is about the debt. It is about the debt. We have to
do something about the debt, and we have tried mightily to do that. We
have tried mightily.
We had the Conrad-Judd Gregg legislation. Seven people who are
Republican Senators who cosponsored that wouldn't vote for it and allow
me to get it on the floor because they had adopted the Republican
leader's philosophy that the most important thing we can do is defeat
President Obama for reelection. Then we went to Bowles-Simpson, which
was a program we put together when we couldn't get that legislation.
That was so good, by two of our best financial minds in the Senate,
Judd Gregg and Kent Conrad. And Bowles-Simpson didn't make it. Then we
had a series of talks with the President and the Speaker. Always, we
could never quite get it done. Why? Even though my friend and I care
about him, John Boehner said, I want to do big things, not little
things. One of the little things he couldn't do is get his caucus to
agree to just a little bit of revenue so we could have a deal, the
grand bargain. Then we tried the Biden talks. The majority leader in
the House of Representatives walked out on those talks. Then we had the
supercommittee, and about 1 week before, by statute, Patty Murray and
her troops were supposed to offer the legislation, I got a letter
signed by virtually every Republican Senator saying: No thanks. Grover
wins again. No revenues.
This is about our country, about doing something about a debt. It
will contribute about $1 trillion to the debt. That is not bad.
The VICE PRESIDENT. The Republican leader.
Mr. McCONNELL. Mr. President, I heard my good friend the majority
leader say this is about the deficit. This will produce enough revenue
to operate the government for about 1 week. This would produce about
enough revenue to operate the government for about 1 week.
This is not about the deficit or the debt, this is about the
campaign. We all know there is a campaign going on, but why don't we do
serious legislating here? No budget, no appropriation bills, no DOD
authorization bill. When are we going to actually pass things in the
Senate?
This is a uniquely bad idea for the economy. The good news that I can
say to the American people is that it isn't going to happen today. It
ought not to
[[Page S5355]]
happen anytime. This is part of the fiscal cliff we are facing at the
end of the year. The Chairman of the Fed is concerned about it, the
Congressional Budget Office, which Republicans certainly don't run, is
concerned about it. We have heard talk on the other side that we should
have Thelma and Louise economics and just drive the country right off
the cliff. We all get in the car and go right off the cliff together
and see what it is like.
The American people know a campaign is going on, but why don't we in
here try to do something important for the country now. The campaign
will take care of itself. This is not a serious piece of legislation
because it is not going anywhere, and thank goodness it is not going
anywhere because it would be bad for the economy and the single worst
thing we could do to the country.
The VICE PRESIDENT. The majority leader.
Mr. REID. Mr. President, required reading for decades now has been
George Orwell. College students read it now just like I did when I was
in college. George Orwell came to the conclusion that we have arrived
at a time where up is down and down is up, and that is what my friend,
the Republican leader, has done. If there were ever a statement
Orwellian, it is his.
We haven't done the appropriations bill. Stop and think just 1
minute. Does the minority leader think 85 filibusters had anything to
do with that? Eighty-five filibusters. We haven't done a budget. That
is poppycock. We have one. We did it, and my Republican friends--I
appreciate it--voted with us. We have our numbers right now. We could
have done every appropriations bill. Chairman Inouye marked them up. We
can't do them because we have to overcome 85 filibusters.
For my friend to say, let's do something important, please--is this
bill we are going to pass important? You bet it is. He said it would
only pay for the government for 1 week or whatever the number was. Over
10 years, it is $1 trillion. Over 1 year, it is $100 billion. Even in
Las Vegas that is not chump change.
I wish we would vote now.
The VICE PRESIDENT. The question is on the engrossment and third
reading of the bill.
The bill was ordered to be engrossed for a third reading and was read
the third time.
The VICE PRESIDENT. The question is on the passage of S. 3412.
Mr. McCONNELL. I ask for the yeas and nays.
The VICE PRESIDENT. Is there a sufficient second?
There appears to be a sufficient second.
The clerk will call the roll.
Mr. KYL. The following Senator is necessarily absent: the Senator
from Illinois (Mr. Kirk).
The VICE PRESIDENT. Are there any other Senators in the Chamber
desiring to vote?
The result was announced--yeas 51, nays 48, as follows:
[Rollcall Vote No. 184 Leg.]
YEAS--51
Akaka
Baucus
Begich
Bennet
Bingaman
Blumenthal
Boxer
Brown (OH)
Cantwell
Cardin
Carper
Casey
Conrad
Coons
Durbin
Feinstein
Franken
Gillibrand
Hagan
Harkin
Inouye
Johnson (SD)
Kerry
Klobuchar
Kohl
Landrieu
Lautenberg
Leahy
Levin
Manchin
McCaskill
Menendez
Merkley
Mikulski
Murray
Nelson (NE)
Nelson (FL)
Pryor
Reed
Reid
Rockefeller
Sanders
Schumer
Shaheen
Stabenow
Tester
Udall (CO)
Udall (NM)
Warner
Whitehouse
Wyden
NAYS--48
Alexander
Ayotte
Barrasso
Blunt
Boozman
Brown (MA)
Burr
Chambliss
Coats
Coburn
Cochran
Collins
Corker
Cornyn
Crapo
DeMint
Enzi
Graham
Grassley
Hatch
Heller
Hoeven
Hutchison
Inhofe
Isakson
Johanns
Johnson (WI)
Kyl
Lee
Lieberman
Lugar
McCain
McConnell
Moran
Murkowski
Paul
Portman
Risch
Roberts
Rubio
Sessions
Shelby
Snowe
Thune
Toomey
Vitter
Webb
Wicker
NOT VOTING--1
Kirk
The bill (S. 3412) was passed, as follows:
S. 3412
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; ETC.
(a) Short Title.--This Act may be cited as the ``Middle
Class Tax Cut Act''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is
expressed in terms of an amendment to, or repeal of, a
section or other provision, the reference shall be considered
to be made to a section or other provision of the Internal
Revenue Code of 1986.
(c) Table of Contents.--The table of contents of this Act
is as follows:
Sec. 1. Short title; etc.
TITLE I--TEMPORARY EXTENSION OF TAX RELIEF
Sec. 101. Temporary extension of 2001 tax relief.
Sec. 102. Temporary extension of 2003 tax relief.
Sec. 103. Temporary extension of 2010 tax relief.
Sec. 104. Temporary extension of election to expense certain
depreciable business assets.
TITLE II--ALTERNATIVE MINIMUM TAX RELIEF
Sec. 201. Temporary extension of increased alternative minimum tax
exemption amount.
Sec. 202. Temporary extension of alternative minimum tax relief for
nonrefundable personal credits.
TITLE III--BUDGETARY EFFECTS
Sec. 301. Budgetary effects.
TITLE I--TEMPORARY EXTENSION OF TAX RELIEF
SEC. 101. TEMPORARY EXTENSION OF 2001 TAX RELIEF.
(a) Temporary Extension.--
(1) In general.--Section 901(a)(1) of the Economic Growth
and Tax Relief Reconciliation Act of 2001 is amended by
striking ``December 31, 2012'' and inserting ``December 31,
2013''.
(2) Effective date.--The amendment made by this subsection
shall take effect as if included in the enactment of the
Economic Growth and Tax Relief Reconciliation Act of 2001.
(b) Application to Certain High-Income Taxpayers.--
(1) Income tax rates.--
(A) Treatment of 25- and 28-percent rate brackets.--
Paragraph (2) of section 1(i) is amended to read as follows:
``(2) 25- and 28-percent rate brackets.--The tables under
subsections (a), (b), (c), (d), and (e) shall be applied--
``(A) by substituting `25%' for `28%' each place it appears
(before the application of subparagraph (B)), and
``(B) by substituting `28%' for `31%' each place it
appears.''.
(B) 33-percent rate bracket.--Subsection (i) of section 1
is amended by redesignating paragraph (3) as paragraph (4)
and by inserting after paragraph (2) the following new
paragraph:
``(3) 33-percent rate bracket.--
``(A) In general.--In the case of taxable years beginning
after December 31, 2012--
``(i) the rate of tax under subsections (a), (b), (c), and
(d) on a taxpayer's taxable income in the fourth rate bracket
shall be 33 percent to the extent such income does not exceed
an amount equal to the excess of--
``(I) the applicable amount, over
``(II) the dollar amount at which such bracket begins, and
``(ii) the 36 percent rate of tax under such subsections
shall apply only to the taxpayer's taxable income in such
bracket in excess of the amount to which clause (i) applies.
``(B) Applicable amount.--For purposes of this paragraph,
the term `applicable amount' means the excess of--
``(i) the applicable threshold, over
``(ii) the sum of the following amounts in effect for the
taxable year:
``(I) the basic standard deduction (within the meaning of
section 63(c)(2)), and
``(II) the exemption amount (within the meaning of section
151(d)(1) (or, in the case of subsection (a), 2 such
exemption amounts).
``(C) Applicable threshold.--For purposes of this
paragraph, the term `applicable threshold' means--
``(i) $250,000 in the case of subsection (a),
``(ii) $225,000 in the case of subsection (b),
``(iii) $200,000 in the case of subsections (c), and
``(iv) \1/2\ the amount applicable under clause (i) (after
adjustment, if any, under subparagraph (E)) in the case of
subsection (d).
``(D) Fourth rate bracket.--For purposes of this paragraph,
the term `fourth rate bracket' means the bracket which would
(determined without regard to this paragraph) be the 36-
percent rate bracket.
``(E) Inflation adjustment.--For purposes of this
paragraph, with respect to taxable years beginning in
calendar years after 2012, each of the dollar amounts under
clauses (i), (ii), and (iii) of subparagraph (C) shall be
adjusted in the same manner as under paragraph (1)(C), except
that subsection (f)(3)(B) shall be applied by substituting
`2008' for `1992'.''.
(2) Phaseout of personal exemptions and itemized
deductions.--
(A) Overall limitation on itemized deductions.--Section 68
is amended--
(i) by striking ``the applicable amount'' the first place
it appears in subsection (a) and inserting ``the applicable
threshold in effect under section 1(i)(3)'',
[[Page S5356]]
(ii) by striking ``the applicable amount'' in subsection
(a)(1) and inserting ``such applicable threshold'',
(iii) by striking subsection (b) and redesignating
subsections (c), (d), and (e) as subsections (b), (c), and
(d), respectively, and
(iv) by striking subsections (f) and (g).
(B) Phaseout of deductions for personal exemptions.--
(i) In general.--Paragraph (3) of section 151(d) is
amended--
(I) by striking ``the threshold amount'' in subparagraphs
(A) and (B) and inserting ``the applicable threshold in
effect under section 1(i)(3)'',
(II) by striking subparagraph (C) and redesignating
subparagraph (D) as subparagraph (C), and
(III) by striking subparagraphs (E) and (F).
(ii) Conforming amendments.--Paragraph (4) of section
151(d) is amended--
(I) by striking subparagraph (B),
(II) by redesignating clauses (i) and (ii) of subparagraph
(A) as subparagraphs (A) and (B), respectively, and by
indenting such subparagraphs (as so redesignated)
accordingly, and
(III) by striking all that precedes ``in a calendar year
after 1989,'' and inserting the following:
``(4) Inflation adjustment.--In the case of any taxable
year beginning''.
(c) Effective Date.--Except as otherwise provided, the
amendments made by this section shall apply to taxable years
beginning after December 31, 2012.
(d) Application of EGTRRA Sunset.--Each amendment made by
subsection (b) shall be subject to title IX of the Economic
Growth and Tax Relief Reconciliation Act of 2001 to the same
extent and in the same manner as if such amendment was
included in title I of such Act.
SEC. 102. TEMPORARY EXTENSION OF 2003 TAX RELIEF.
(a) Extension.--
(1) In general.--Section 303 of the Jobs and Growth Tax
Relief Reconciliation Act of 2003 is amended by striking
``December 31, 2012'' and inserting ``December 31, 2013''.
(2) Effective date.--The amendment made by this subsection
shall take effect as if included in the enactment of the Jobs
and Growth Tax Relief Reconciliation Act of 2003.
(b) 20-Percent Capital Gains Rate for Certain High Income
Individuals.--
(1) In general.--Paragraph (1) of section 1(h) is amended
by striking subparagraph (C), by redesignating subparagraphs
(D) and (E) as subparagraphs (E) and (F) and by inserting
after subparagraph (B) the following new subparagraphs:
``(C) 15 percent of the lesser of--
``(i) so much of the adjusted net capital gain (or, if
less, taxable income) as exceeds the amount on which a tax is
determined under subparagraph (B), or
``(ii) the excess (if any) of--
``(I) the amount of taxable income which would (without
regard to this paragraph) be taxed at a rate below 36
percent, over
``(II) the sum of the amounts on which a tax is determined
under subparagraphs (A) and (B),
``(D) 20 percent of the adjusted net capital gain (or, if
less, taxable income) in excess of the sum of the amounts on
which tax is determined under subparagraphs (B) and (C),''.
(2) Minimum tax.--Paragraph (3) of section 55(b) is amended
by striking subparagraph (C), by redesignating subparagraph
(D) as subparagraph (E), and by inserting after subparagraph
(B) the following new subparagraphs:
``(C) 15 percent of the lesser of--
``(i) so much of the adjusted net capital gain (or, if
less, taxable excess) as exceeds the amount on which tax is
determined under subparagraph (B), or
``(ii) the excess described in section 1(h)(1)(C)(ii), plus
``(D) 20 percent of the adjusted net capital gain (or, if
less, taxable excess) in excess of the sum of the amounts on
which tax is determined under subparagraphs (B) and (C),
plus''.
(c) Conforming Amendments.--
(1) The following provisions are each amended by striking
``15 percent'' and inserting ``20 percent'':
(A) Section 531.
(B) Section 541.
(C) Section 1445(e)(1).
(D) The second sentence of section 7518(g)(6)(A).
(E) Section 53511(f)(2) of title 46, United States Code.
(2) Sections 1(h)(1)(B) and 55(b)(3)(B) are each amended by
striking ``5 percent (0 percent in the case of taxable years
beginning after 2007)'' and inserting ``0 percent''.
(3) Section 1445(e)(6) is amended by striking ``15 percent
(20 percent in the case of taxable years beginning after
December 31, 2010)'' and inserting ``20 percent''.
(d) Effective Dates.--
(1) In general.--Except as otherwise provided, the
amendments made by subsections (b) and (c) shall apply to
taxable years beginning after December 31, 2012.
(2) Withholding.--The amendments made by paragraphs (1)(C)
and (3) of subsection (c) shall apply to amounts paid on or
after January 1, 2013.
(e) Application of JGTRRA Sunset.--Each amendment made by
subsections (b) and (c) shall be subject to section 303 of
the Jobs and Growth Tax Relief Reconciliation Act of 2003 to
the same extent and in the same manner as if such amendment
was included in title III of such Act.
SEC. 103. TEMPORARY EXTENSION OF 2010 TAX RELIEF.
(a) American Opportunity Tax Credit.--
(1) In general.--Section 25A(i) is amended by striking ``or
2012'' and inserting ``2012, or 2013''.
(2) Treatment of possessions.--Section 1004(c)(1) of
division B of the American Recovery and Reinvestment Tax Act
of 2009 is amended by striking ``and 2012'' each place it
appears and inserting ``2012, and 2013''.
(b) Child Tax Credit.--Section 24(d)(4) is amended--
(1) by striking ``and 2012'' in the heading and inserting
``2012, and 2013'', and
(2) by striking ``or 2012'' and inserting ``2012, or
2013''.
(c) Earned Income Tax Credit.--Section 32(b)(3) is
amended--
(1) by striking ``and 2012'' in the heading and inserting
``2012, and 2013'', and
(2) by striking ``or 2012'' and inserting ``2012, or
2013''.
(d) Temporary Extension of Rule Disregarding Refunds in the
Administration of Federal Programs and Federally Assisted
Programs.--Subsection (b) of section 6409 is amended by
striking ``December 31, 2012'' and inserting ``December 31,
2013''.
(e) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to taxable years
beginning after December 31, 2012.
(2) Rule disregarding refunds in the administration of
certain programs.--The amendment made by subsection (d) shall
apply to amounts received after December 31, 2012.
SEC. 104. TEMPORARY EXTENSION OF ELECTION TO EXPENSE CERTAIN
DEPRECIABLE BUSINESS ASSETS.
(a) In General.--
(1) Dollar limitation.--Section 179(b)(1) is amended--
(A) by striking ``and'' at the end of subparagraph (C),
(B) by redesignating subparagraph (D) as subparagraph (E),
(C) by inserting after subparagraph (C) the following new
subparagraph:
``(D) $250,000 in the case of taxable years beginning in
2013, and'', and
(D) in subparagraph (E), as so redesignated, by striking
``2012'' and inserting ``2013''.
(2) Reduction in limitation.--Section 179(b)(2) is
amended--
(A) by striking ``and'' at the end of subparagraph (C),
(B) by redesignating subparagraph (D) as subparagraph (E),
(C) by inserting after subparagraph (C) the following new
subparagraph:
``(D) $800,000 in the case of taxable years beginning in
2013, and'', and
(D) in subparagraph (E), as so redesignated, by striking
``2012'' and inserting ``2013''.
(b) Computer Software.--Section 179(d)(1)(A)(ii) is amended
by striking ``2013'' and inserting ``2014''.
(c) Election.--Section 179(c)(2) is amended by striking
``2013'' and inserting ``2014''.
(d) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2012.
TITLE II--ALTERNATIVE MINIMUM TAX RELIEF
SEC. 201. TEMPORARY EXTENSION OF INCREASED ALTERNATIVE
MINIMUM TAX EXEMPTION AMOUNT.
(a) In General.--Paragraph (1) of section 55(d) is
amended--
(1) by striking ``$72,450'' and all that follows through
``2011'' in subparagraph (A) and inserting ``$78,750 in the
case of taxable years beginning in 2012'', and
(2) by striking ``$47,450'' and all that follows through
``2011'' in subparagraph (B) and inserting ``$50,600 in the
case of taxable years beginning in 2012''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2011.
SEC. 202. TEMPORARY EXTENSION OF ALTERNATIVE MINIMUM TAX
RELIEF FOR NONREFUNDABLE PERSONAL CREDITS.
(a) In General.--Paragraph (2) of section 26(a) is
amended--
(1) by striking ``or 2011'' and inserting ``2011, or
2012'', and
(2) by striking ``2011'' in the heading thereof and
inserting ``2012''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2011.
TITLE III--BUDGETARY EFFECTS
SEC. 301. BUDGETARY EFFECTS.
(a) PAYGO Scorecard.--The budgetary effects of this Act
shall not be entered on either PAYGO scorecard maintained
pursuant to section 4(d) of the Statutory Pay-As-You-Go Act
of 2010.
(b) Senate PAYGO Scorecard.--The budgetary effects of this
Act shall not be entered on any PAYGO scorecard maintained
for purposes of section 201 of S. Con. Res. 21 (110th
Congress).
Mr. REID. Mr. President, I move to reconsider the vote.
Mr. DURBIN. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
Ms. KLOBUCHAR. Mr. President, I rise today in support of the Middle
Class Tax Relief Act. This afternoon, I voted for legislation that
would have extended the middle-class tax cuts through 2013.
[[Page S5357]]
In Minnesota, 2 million families and small businesses will see their
Federal income taxes increase by an average of $1,600 unless the
middle-class tax cuts are extended. Instead of waiting until the
eleventh hour, this legislation would have provided certainty for
families and small businesses that their already squeezed budgets won't
have to be trimmed further in the coming year.
I would like to make clear that extending the middle-class tax cuts
is just the first step. There is a growing majority here that favors
comprehensive tax reform that would simplify the Tax Code, broaden the
base, and lower tax rates. Passing the middle-class tax cuts today
would give us time to reach consensus on the details of reform that
would streamline our Tax Code, pay down our debt, and ensure the United
States remains competitive.
We also must take action on the estate tax. If Congress does nothing,
the exemption would drop to $1 million and the rate would rise to 55
percent. This is not an acceptable outcome and would hurt farmers and
small businesses in Minnesota who have worked hard to build a legacy
they can pass on to their children and grandchildren. In the past we
have come together to pass compromise levels that don't harm farmers
and small business owners, while still being mindful of our deficit. I
will work to ensure it happens again.
Mr. BENNET. Mr. President, I rise to talk briefly about the estate
tax and Colorado's agricultural community and small businesses. While I
voted in favor of the Middle Class Tax Cut Act, I do not believe that
this legislation represents an end to the tax reform debate in
Washington. In particular, it is important that we find a bipartisan
and responsible path forward on the estate tax that provides the
necessary certainty for businesses and families across Colorado. This
is vital for Colorado's economy. I am committed to working with my
colleagues in Congress to establish an estate tax policy that works for
small businesses, family farms and ranches, and all Coloradans.
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