[Congressional Record Volume 166, Number 213 (Wednesday, December 16, 2020)]
[Senate]
[Pages S7544-S7553]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTION

      By Mr. CARDIN:
  S. 5031. 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; to the Committee on Finance.
  Mr. CARDIN. Mr. President, today I introduced the Progressive 
Consumption Tax Act of 2020.
  We need a tax code that is fair for American families and for 
employers. We need a tax code that rethinks how our Nation collects the 
revenue that allows us to build our roads and bridges and keeps our 
Nation safe. We need a system that values our most vulnerable 
Americans, small businesses, and makes our U.S.-based businesses more 
competitive.
  In our recent history, comprehensive tax reform has been out of 
grasp. Congressional leaders have long called for a 1986-style tax 
reform in which the tax code would be streamlined and simplified to 
broaden the tax base and lower income tax rates. The 2017 tax law was a 
representation of how hard this type of tax reform is. It kept in place 
much of what makes the tax code complicated and inefficient, did not 
secure permanent income tax rate reductions for working families, and 
it increased the deficit by nearly $2 trillion. It is time we take a 
new approach.
  As we look to the future and work towards the goal of a sustainable 
economy that works for all, my colleagues and I will need to think 
creatively about how to raise revenues and provide for the services the 
government must and can deliver.
  Austere and regressive spending cuts are not the answer to the 
question of how to set the country on a sustainable path and support 
working families. Instead, we should look at ways to raise reasonable 
revenues and make the tax code work better for all. The Progressive 
Consumption Tax Act should be part of that conversation.
  I introduced versions of this bill in the past to provide an opening 
for discussion and an opportunity to review legislative language for 
this type of comprehensive tax reform. Now more than ever it is 
critical Congress revisit the thinking about comprehensive tax reform 
that is lasting and progressive.
  The 2017 tax law was constructed with many temporary policies that 
will require future action on tax policies as these provisions expire.
  While some of those will be years from now, this conversation can 
never start early enough. We know that good ideas can take time to 
become mainstream. In a world where about 150 countries now have a 
consumption tax, it is time the U.S. join this mainstream thinking.
  The legislation I have introduced today is an example of truly 
progressive, fiscally responsible, pro-growth tax reform could look 
like.
  It also provides an opportunity for the U.S. to catch up with the 
rest of the world. All OECD countries except the U.S. have a 
consumption tax.
  The Progressive Consumption Tax Act would put this country on a level 
playing field by providing for a progressive consumption tax, or PCT, 
at a rate of 10 percent. The PCT would generate revenue by taxing goods 
and services, rather than income.
  The revenues collected by the PCT would eliminate an income tax 
liability for most households in this Nation. Lower income individuals, 
those currently eligible for the Earned Income Tax Credit and the Child 
Tax Credit, would receive rebates to cover the cost of their PCT 
burden, cementing the progressivity of this new system.
  For those who do still have an income tax liability under this Act 
would have lower rates and a simplified income tax. Under current law, 
the top marginal income tax rate is 37 percent. Under the Progressive 
Consumption Tax Act, the top income rate would be just 28 percent.
  The 2017 tax law reduced the corporate tax rate to 21 percent. This 
Act would further reduce that rate to 17 percent. Businesses would be 
more competitive and this would contribute to a pro-growth economy in 
the U.S., all while collecting reasonable revenues.
  As we discuss this proposal, you will hear me say this over and over 
again: An overarching goal of the Progressive Consumption Tax Act is 
ensuring the tax code is progressive, meaning that those who make less 
in income don't have a higher tax burden than wealthy people. The 
provisions included in this Act--removing an income tax liability for 
most households and providing rebates--are meant to maintain 
progressivity in the tax code for families.
  For those who worry that a consumption tax will bring in ``too much'' 
money, my legislation remains balanced. It is designed to raise stable 
and reasonable tax revenues. However, if more revenues than envisioned 
are collected under this legislation, a ``circuit breaker'' would 
return additional revenues to taxpayers. Again, we put money back into 
the hands of the taxpayers.
  In 2017, I offered the Progressive Consumption Tax Act as an 
alternative to the tax legislation considered that year. While it would 
have been a responsible choice to enact then, it could still provide a 
fresh start now.
  Since that law was passed, there has been increased interest in 
looking at ways to reform the nation's tax laws to tilt any benefit 
more towards those who were left behind and raise reasonable revenues. 
My colleagues in Congress and stakeholders are searching for forward-
looking ideas for how to modernize the tax code. I am excited that 
President-elect Biden has put forward tax reform proposals and 
Congressional leaders have done the same. The longer we wait to put 
this country in a better, more competitive, progressive position, the 
harder it will be.
  That's why I am reintroducing the Progressive Consumption Tax this 
year. As this Congress closes and the new Congress convenes, I hope we 
will seriously consider the tax system in this country and consider the 
types of reforms proposed in the Progressive Consumption Tax Act.
  Mr. President, I ask unanimous consent that the text of my bill 
appear in the Record following these remarks.

                                S. 5031

       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 2020''.
       (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 and inflation 
              adjustments.
Sec. 202. Family allowance amounts; repeal of personal exemption 
              deduction.
Sec. 203. Repeal of limitations relating to itemized deductions.
Sec. 204. Restoration of certain deductions.
Sec. 205. Termination of separate treatment of capital gains.
Sec. 206. Repeals.
Sec. 207. Establishment of progressive tax rebate.
Sec. 208. 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:

[[Page S7545]]

  


               ``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,
       ``(D) any nonparticipating small supplier supply, and
       ``(E) 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.
       ``(3) Nonparticipating small supplier supply.--
       ``(A) In general.--For purposes of paragraph (1), the term 
     `nonparticipating small supplier supply' means any supply 
     provided by a supplier during--
       ``(i) any taxable period during which such supplier was a 
     nonparticipating small supplier, or
       ``(ii) the four-week period beginning on the first day 
     after the close of the last calendar quarter in which such 
     supplier was a nonparticipating small supplier.
       ``(B) Nonparticipating small supplier.--
       ``(i) In general.--For purposes of subparagraph (A), the 
     term `nonparticipating small supplier' means any person for 
     any taxable period if--

       ``(I) such person has aggregate taxable revenues of not 
     more than $100,000 for the four-calendar quarter period 
     ending immediately before the taxable period, and
       ``(II) has not made an election under clause (iii) for such 
     taxable period.

       ``(ii) Taxable revenue.--For purposes of this paragraph, 
     the term `taxable revenue' means revenue from supplies which 
     are taxable supplies, determined without regard to paragraph 
     (1)(D).
       ``(iii) Election.--Under regulations prescribed by the 
     Secretary, any person who meets the requirements of clause 
     (i)(I) may make an election not to be treated as a 
     nonparticipating small supplier for any taxable period.
       ``(C) Aggregation rules.--For purposes of determining 
     aggregate taxable revenues under subparagraph (B)(i)(I), all 
     members of the same controlled group of corporations (within 
     the meaning of section 267(f)) and all persons under common 
     control (within the meaning of section 52(b) but determined 
     by treating an interest of more than 50 percent as a 
     controlling interest) shall be treated as 1 person.

                   ``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 which--
       ``(1) was subject to tax under section 3901 at the time it 
     was provided to the taxpayer,
       ``(2) 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

[[Page S7546]]

     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) except as provided in subsection (c), was not used by 
     the taxpayer to make an exempt supply.
       ``(c) Certain Acquisitions Related to Financial Supplies.--
       ``(1) Acquisitions by qualified small financial 
     suppliers.--
       ``(A) In general.--Solely for purposes of subsections 
     (b)(3) and (d)(1), a financial supply which is provided by a 
     qualified small financial supplier shall not be treated as an 
     exempt supply.
       ``(B) Qualified small financial supplier.--
       ``(i) In general.--For purposes of this paragraph, the term 
     `qualified small financial supplier' means any person for any 
     month if, for the 12-month period ending with the month 
     preceding such month, the amount of credits which, but for 
     this paragraph, would be allowable to such person under 
     subsection (a) for taxable supplies which are used for the 
     purpose of making financial supplies does not exceed the 
     lesser of--

       ``(I) $150,000, or
       ``(II) 10 percent of the amount of credits allowable to 
     such person under subsection (a) (determined without regard 
     to this paragraph) for all taxable supplies during such 12-
     month period.

       ``(ii) Aggregation rules.--For purposes of determining the 
     amount of credits for any period under clause (i), all 
     members of the same controlled group of corporations (within 
     the meaning of section 267(f)) and all persons under common 
     control (within the meaning of section 52(b) but determined 
     by treating an interest of more than 50 percent as a 
     controlling interest) shall be treated as 1 person.
       ``(2) Partially creditable acquisitions.--
       ``(A) In general.--In the case of any partially creditable 
     acquisition by a person other than a qualified small 
     financial supplier--
       ``(i) subsection (b) shall be applied without regard to 
     paragraph (3) thereof, and
       ``(ii) only 60 percent of the amount of tax imposed by 
     section 3901 shall be taken account under subsection (a) in 
     determining the amount of the credit under this section.
       ``(B) Partially creditable acquisition.--For purposes of 
     this section--
       ``(i) In general.--The term `partially creditable 
     acquisition' means the acquisition of any supply described in 
     clause (ii) if such acquisition is used to provide a 
     financial supply.
       ``(ii) Supplies described.--A supply is described in this 
     clause if such supply is a supply of--

       ``(I) banking or cash management services, including 
     services related to issuing, closing, operating, and 
     maintaining accounts, and the processing of account 
     information and applications,
       ``(II) payment and fund transfer services, including for 
     the operation of a payment system and processing account 
     transactions,
       ``(III) securities transaction services for the provision, 
     acquisition, or disposal of an interest in a security,
       ``(IV) loan and debt collection services, including 
     mortgage brokerage services, services related to mortgage 
     insurance and loan protection insurance, and loan 
     application, management, and processing services,
       ``(V) capital markets, financial instruments, or fund 
     management services,
       ``(VI) insurance services, including brokerage services, or
       ``(VII) such other services as the Secretary may specify in 
     regulations.

       ``(d) Exempt Supplies, etc.--
       ``(1) In general.--If acquisitions (other than partially 
     creditable acquisitions) are used partly for a use which is 
     not for an exempt supply and partly for an exempt supply, the 
     credit shall be allowable only with respect to the 
     acquisitions which are not used for an exempt supply.
       ``(2) Partially creditable acquisitions.--If partially 
     creditable acquisition is used partly to provide a supply 
     described in subsection (c)(2)(B)(ii) and partly for another 
     use, subsection (c)(2) shall apply only with respect to 
     acquisitions used to provide supplies described in subsection 
     (c)(2)(B)(ii).
       ``(e) 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

[[Page S7547]]

     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, except as provided in 
     sections 3913(b)(3)(C) and 3916(c)(1)(B)(ii) and in 
     regulations established by the Secretary, 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, 2021.

             TITLE II--INDIVIDUAL AND CORPORATE TAX REFORM

               Subtitle A--Individual Income Tax Reforms

     SEC. 201. INDIVIDUAL INCOME TAX RATE REDUCTIONS AND INFLATION 
                   ADJUSTMENTS.

       (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:

The tax is:e income is:
15 percent of taxable income...........................................
$15,000, plus 25 percent of the excess over $100,000...................
$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:

The tax is:e income is:
15 percent of taxable income...........................................
$7,500, plus 25 percent of the excess over $50,000.....................
$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:

The tax is:e income is:
15 percent of taxable income...........................................
$7,500, plus 25 percent of the excess 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:

The tax is:e income is:
15 percent of taxable income...........................................
$7,500, plus 25 percent of the excess over $250,000....................
$57,500, plus 28 percent of the excess over $250,000.''................
       (5) Conforming amendments.--Section 1 is amended by 
     striking subsections (i) and (j).
       (b) Inflation Adjustments Applied Based on CPI.--Paragraph 
     (3) of section 1(f) is amended to read as follows:
       ``(3) Cost-of-living adjustment.--For purposes of this 
     subsection--
       ``(A) In general.--The cost-of-living adjustment for any 
     calendar year is the percentage (if any) by which--
       ``(i) the CPI for the preceding calendar year, exceeds
       ``(ii) the CPI for calendar year 2016, multiplied by the 
     amount determined under subparagraph (B).
       ``(B) Amount determined.--The amount determined under this 
     subparagraph is the product of--
       ``(i) the amount obtained by dividing--

       ``(I) the C-CPI-U for calendar year 2016, by
       ``(II) the CPI for calendar year 2016, and

       ``(ii) the amount obtained by dividing--

       ``(I) the CPI for calendar year 2021, by
       ``(II) the C-CPI-U for calendar year 2021.

       ``(C) Special rule for adjustments with a base years after 
     2016.--
       ``(i) Base years after 2021.--For purposes of any provision 
     of this title which provides for the substitution of a year 
     after 2021 for `2016' in subparagraph (A)(ii), such 
     subparagraph shall be applied without regard to `, multiplied 
     by the amount determined under subparagraph (B)'.
       ``(ii) Base years after 2016 and before 2022.--For purposes 
     of any provision of this title which provides for the 
     substitution of a year after 2016 and before 2021 for `2016' 
     in subparagraph (A)(ii)--

       ``(I) subparagraph (A)(ii) shall be applied by substituting 
     `C-CPI-U' for `CPI', and
       ``(II) the amount determined under subparagraph (B) shall 
     be the amount obtained by dividing--

       ``(aa) the CPI for calendar year 2021, by
       ``(bb) the C-CPI-U for calendar year 2021.''.
       (c) Conforming Amendments Related to Rate Changes.--
       (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 (8) and 
     inserting the following:
       ``(8) Cost-of-living adjustment for years after 2021.--
       ``(A) Calendar year 2022.--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 2022, 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, 2022, the cost-of-living 
     adjustment used in making adjustments to the dollar amounts 
     in such tables shall be determined under paragraph (3) by 
     substituting `2021' for `2016' in subparagraph (A)(ii) 
     thereof.''.
       (3) Other conforming amendments.--
       (A) Paragraph (2) of section 1(f) is amended--

[[Page S7548]]

       (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''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2021.

     SEC. 202. FAMILY ALLOWANCE AMOUNTS; REPEAL OF PERSONAL 
                   EXEMPTION DEDUCTION.

       (a) Family Allowance Amount.--
       (1) 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 Amount.--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 2022, 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 `2021' for `2016' in 
     subparagraph (A)(ii) 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.''.
       (2) Application of family allowance to certain rules.--
       (A) Source rules.--
       (i) Section 861(b) is amended by striking ``the standard 
     deduction'' and inserting ``the family allowance''.
       (ii) Section 862(b) is amended by striking ``the standard 
     deduction'' and inserting ``the family allowance''.
       (B) Threshold for requirement to make return.--
       (i) 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 7706 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.''.
       (ii) 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)''.
       (iii) Section 6012 is amended by striking subsection (f).
       (C) Other rules.--
       (i) Section 1398(c) is amended--

       (I) 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

       (II) by striking ``Basic Standard Deduction'' in the 
     heading and inserting ``Family Allowance Amount''.

       (ii) Section 6014 is amended--

       (I) by striking ``who dos not itemize his deductions and 
     who is not described in section 6012(a)(1)(C)(i)'' in 
     subsection (a) and inserting ``who is not described in 
     section 6012(a)(1)(B)'', and
       (II) by striking subsection (b)(4) and inserting the 
     following:

       ``(4) to cases where the taxpayer claims deductions in 
     addition to the family allowance.''.
       (b) Permanent Repeal of Deduction for Personal 
     Exemptions.--
       (1) In general.--Part V of subchapter B of chapter 1 is 
     hereby repealed.
       (2) Definition of dependent retained.--
       (A) In general.--Section 152, prior to the repeal made by 
     subsection (a), is hereby redesignated as section 7706 and 
     moved to the end of chapter 79.
       (B) Identifying information required to treat individual as 
     dependent.--Section 7706, as redesignated by subparagraph 
     (A), 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) Application of repeal to certain rules.--
       (A) Determination of dependent.--Section 7706, as 
     redesignated by subparagraph (A), is amended--
       (i) in subsection (d)--

       (I) by striking ``the exemption amount (as defined in 
     section 151(d))'' in subparagraph (1)(B) and inserting 
     ``$4,150'', and
       (II) by adding at the end the following new paragraph:

       ``(6) Inflation adjustment.--In the case of any taxable 
     year beginning in a calendar year beginning after 2018, the 
     $4,150 amount in paragraph (1)(B) shall be increased by an 
     amount equal to--
       ``(A) such dollar amount, multiplied by
       ``(B) the cost-of-living adjustment determined under 
     section 1(c)(2)(A) for the calendar year in which such 
     taxable year begins, determined by substituting `calendar 
     year 2017' for `calendar year 2016' in clause (ii) 
     thereof.'', and
       (ii) in subsection (f)(6)(B)(i), by striking ``the 
     deduction under section 151(c)'' and inserting ``the family 
     allowance amount under section 63(b)''.
       (B) Net operating loss.--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 such family allowance amount 
     shall be allowed.''.
       (C) Short taxable years.--
       (i) Section 443(c) is amended--

       (I) 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'', and
       (II) by striking ``Deduction for Personal Exemptions'' in 
     the heading and inserting ``Family Allowance Amount''.

       (ii) Section 441(f)(2)(B)(iii) is amended by striking ``of 
     the deductions for personal exemptions as described in 
     section 443(c)'' and inserting ``of the family allowance 
     amount''.
       (D) Application to trusts and estates.--
       (i) Section 642(b)(2)(C) is amended--

       (I) by striking ``the exemption amount under section 
     151(d)'' in clause (i) and inserting ``the dollar amount in 
     effect under section 7706(d)(1)(B)'', and
       (II) by striking clause (iii).

       (ii) Section 642(b)(3) is amended--

[[Page S7549]]

       (I) by striking ``the deductions allowed under section 151 
     (relating to deduction for personal exemption)'' and 
     inserting ``the family allowance amount'', and
       (II) by striking ``personal exemption'' in the heading and 
     inserting ``family allowance amount''.

       (E) Partnership computations.--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 the family allowance amount.''.
       (F) Nonresident aliens.--
       (i) 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 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.''.
       (ii)(I) The heading of section 873 is amended by striking 
     ``deductions'' and inserting ``deductions and allowances''.
       (II) 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.''.
       (iii) Section 874(b) is amended by striking ``deduction for 
     exemptions under section 151'' and inserting ``the family 
     allowance amount under section 63''.
       (iv) Section 891 is amended by striking ``deductions 
     allowable under section 151 and under'' and inserting ``the 
     family allowance amount under section 63(a)(2) and the 
     deductions allowable under''.
       (G) Foreign tax credit.--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 family allowance amount under section 63(a)(2) or any 
     deduction in lieu of such amount under section 642(b)(3).''.
       (H) Treatment of possessions.--
       (i) Section 931(b)(1) is amended by striking ``the 
     deduction under section 151, relating to personal 
     exemptions'' and inserting ``the family allowance amount 
     under section 63(c)''.
       (ii) Section 933 is amended--

       (I) by striking ``the deduction under section 151, relating 
     to personal exemptions'' in paragraph (1) and inserting ``the 
     family allowance amount under section 63(c)'', and
       (II) by striking ``the deduction for personal exemptions 
     under section 151'' in paragraph (2) and inserting ``the 
     family allowance amount under section 63(c)''.

       (I) Capital losses.--Section 1212(b)(2)(B)(ii) is amended 
     to read as follows:
       ``(ii) in the case of an estate or trust, the deduction 
     allowed for such year under section 642(b).''.
       (J) Net earnings from self-employment.--Section 1402(a) is 
     amended by striking paragraph (7).
       (K) Payroll withholding.--
       (i) In general.--Paragraph (1) of section 3402(f) is 
     amended by striking subparagraph (A) and all that follows and 
     inserting the following:
       ``(A) the family allowance amount; and
       ``(B) any additional amounts to which the employee elects 
     to take into account under subsection (m), but only if the 
     employee's spouse does not have in effect a withholding 
     allowance certificate claiming such allowance.''.
       (ii) 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).''.
       (iii) Conforming amendments.--

       (I) 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''.
       (II) 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''.
       (III) 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''.
       (IV) 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.''.
       (V) 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)''.

       (L) Joint returns.--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).''.
       (M) Amounts subject to levy.--
       (i) Section 6334(d)(2)(A) is amended to read as follows:
       ``(A) 50 percent of 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''.
       (ii) Section 6334(d) is amended by striking paragraph (4).
       (c) Other Conforming Amendments.--
       (1) Section 1(f)(7) is amended--
       (A) by striking ``section 63(c)(4), section 68(b)(2) or 
     section 151(d)(4)'' in subparagraph (A) and inserting 
     ``subsection (g)(4)(B), section 63(b)(3), section 68(b)(2), 
     or section 7706(d)(6)'', and
       (B) by striking ``sections 63(c)(4) and section 
     151(d)(4)(A)'' in subparagraph (B) and inserting ``sections 
     63(b)(3) and 7706(d)(6)''.
       (2) Section 1(g)(4) is amended--
       (A) by striking subparagraph (A)(ii)(I) and inserting the 
     following:

       ``(I) $500, plus'', 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 `1987' for `2016' in 
     subparagraph (A)(ii) thereof.''.
       (3) Section 1(g)(5)(A) is amended by striking ``section 
     152(e)'' and inserting ``section 7706(e)''.
       (4) Section 2(a)(1)(B) is amended--
       (A) by striking ``section 152'' and inserting ``section 
     7706'', and
       (B) by striking ``with respect to whom the taxpayer is 
     entitled to a deduction for the taxable year under section 
     151'' and inserting ``whose TIN is included on the taxpayer's 
     return of tax for the taxable year''.
       (5) Section 2(b)(1)(A)(i) is amended--
       (A) in the matter preceding subclause (I)--
       (i) by striking ``section 152(c)'' and inserting ``section 
     7706(c)'', and
       (ii) by striking ``section 152(e)'' and inserting ``section 
     7706(e)'', and
       (B) in subclause (II), by striking ``section 152(b)(2) or 
     152(b)(3)'' and inserting ``section 7706(b)(2) or 
     7706(b)(3)''.
       (6) 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 ``if the 
     taxpayer included such person's TIN on the return of tax for 
     the taxable year''.
       (7) 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 and the 
     taxpayer included such father or mother's TIN on the return 
     of tax for the taxable year''.
       (8) Section 2(b)(3)(B) is amended--
       (A) by striking ``section 152(d)(2)'' in clause (i) and 
     inserting ``section 7706(d)(2)'', and
       (B) by striking ``section 152(d)'' in clause (ii) and 
     inserting ``section 7706(d)''.
       (9) Section 36B(b)(2)(A) is amended by striking ``section 
     152'' and inserting ``section 7706''.
       (10) Section 36B(b)(3)(B) is amended by striking ``unless a 
     deduction is allowed under section 151 for the taxable year 
     with respect

[[Page S7550]]

     to a dependent'' in the flush matter at the end and inserting 
     ``unless the taxpayer has a dependent for the taxable year 
     (and the taxpayer included such dependent's TIN on the return 
     of tax for the taxable year)''.
       (11) 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 a dependent of 
     another taxpayer''.
       (12) Section 36B(d)(1) is amended by striking ``equal to 
     the number of individuals for whom the taxpayer is allowed a 
     deduction under section 151 (relating to allowance of 
     deduction for personal exemptions) for the taxable year'' and 
     inserting ``the sum of 1 (2 in the case of a joint return) 
     plus the number of individuals who are dependents of the 
     taxpayer for the taxable year''.
       (13) Section 36B(e)(1) is amended by striking ``1 or more 
     individuals for whom a taxpayer is allowed a deduction under 
     section 151 (relating to allowance of deduction for personal 
     exemptions) for the taxable year (including the taxpayer or 
     his spouse)'' and inserting ``1 or more of the taxpayer, the 
     taxpayer's spouse, or any dependent of the taxpayer''.
       (14) Section 42(i)(3)(D)(ii)(I) is amended by striking 
     ``section 152'' and inserting ``section 7706''.
       (15) Section 45R(e)(1)(A)(iv) is amended--
       (A) by striking ``section 152(d)(2)'' and inserting 
     ``section 7706(d)(2)'', and
       (B) by striking ``section 152(d)(2)(H)'' and inserting 
     ``section 7706(d)(2)(H)''.
       (16) Section 51(i)(1) is amended--
       (A) by striking ``section 152(d)(2)'' in subparagraphs (A) 
     and (B) and inserting ``section 7706(d)(2)'', and
       (B) by striking ``section 152(d)(2)(H)'' in subparagraph 
     (C) and inserting ``section 7706(d)(2)(H)''.
       (17) Section 72(t)(2)(D)(i)(III) is amended by striking 
     ``section 152'' and inserting ``section 7706''.
       (18) Section 72(t)(7)(A)(iii) is amended by striking 
     ``section 152(f)(1)'' and inserting ``section 7706(f)(1)''.
       (19) Section 105(b) is amended--
       (A) by striking ``as defined in section 152'' and inserting 
     ``as defined in section 7706'',
       (B) by striking ``section 152(f)(1)'' and inserting 
     ``section 7706(f)(1)'' and
       (C) by striking ``section 152(e)'' and inserting ``section 
     7706(e)''.
       (20) Section 105(c)(1) is amended by striking ``section 
     152'' and inserting ``section 7706''.
       (21) Section 125(e)(1)(D) is amended by striking ``section 
     152'' and inserting ``section 7706''.
       (22) Section 129(c)(1) is amended to read as follows:
       ``(1) who is a dependent of such employee or of such 
     employee's spouse, or''.
       (23) Section 129(c)(2) is amended by striking ``section 
     152(f)(1)'' and inserting ``section 7706(f)(1)''.
       (24) Section 132(h)(2)(B) is amended--
       (A) by striking ``section 152(f)(1)'' and inserting 
     ``section 7706(f)(1)'', and
       (B) by striking ``section 152(e)'' and inserting ``section 
     7706(e)''.
       (25) Section 139D(c)(5) is amended by striking ``section 
     152'' and inserting ``section 7706''.
       (26) Section 139E(c)(2) is amended by striking ``section 
     152'' and inserting ``section 7706''.
       (27) Section 162(l)(1)(D) is amended by striking ``section 
     152(f)(1)'' and inserting ``section 7706(f)(1)''.
       (28) Section 170(g)(1) is amended by striking ``section 
     152'' and inserting ``section 7706''.
       (29) Section 170(g)(3) is amended by striking ``section 
     152(d)(2)'' and inserting ``section 7706(d)(2)''.
       (30) Section 213(a) is amended by striking ``section 152'' 
     and inserting ``section 7706''.
       (31) Section 213(d)(5) is amended by striking ``section 
     152(e)'' and inserting ``section 7706(e)''.
       (32) Section 213(d)(11) is amended by striking ``section 
     152(d)(2)'' in the matter following subparagraph (B) and 
     inserting ``section 7706(d)(2)''.
       (33) Section 220(b)(6) is amended by striking ``with 
     respect to whom a deduction under section 151 is allowable 
     to'' and inserting ``who is a dependent of''.
       (34) Section 220(d)(2)(A) is amended by striking ``section 
     152'' and inserting ``section 7706''.
       (35) Section 223(b)(6) is amended by striking ``with 
     respect to whom a deduction under section 151 is allowable 
     to'' and inserting ``who is a dependent of''.
       (36) Section 223(d)(2)(A) is amended by striking ``section 
     152'' and inserting ``section 7706''.
       (37) Section 401(h) is amended by striking ``section 
     152(f)(1)'' in the last sentence and inserting ``section 
     7706(f)(1)''.
       (38) Section 402(l)(4)(D) is amended by striking ``section 
     152'' and inserting ``section 7706''.
       (39) Section 409A(a)(2)(B)(ii)(I) is amended by striking 
     ``section 152(a)'' and inserting ``section 7706(a)''.
       (40) Section 501(c)(9) is amended by striking ``section 
     152(f)(1)'' and inserting ``section 7706(f)(1)''.
       (41) Section 529(e)(2)(B) is amended by striking ``section 
     152(d)(2)'' and inserting ``section 7706(d)(2)''.
       (42) Section 529A(e)(4) is amended--
       (A) by striking ``section 152(d)(2)(B)'' and inserting 
     ``section 7706(d)(2)(B)'', and
       (B) by striking ``section 152(f)(1)(B)'' and inserting 
     ``section 7706(f)(1)(B)''.
       (43) Section 643(a)(2) is amended--
       (A) by striking ``(relating to deduction for personal 
     exemptions)'' and inserting ``(relating to basic 
     deduction)'', and
       (B) by striking ``Deduction for personal exemption'' in the 
     heading thereof and inserting ``Basic deduction''.
       (44) Section 1361(c)(1)(C) is amended by striking ``section 
     152(f)(1)(C)'' and inserting ``section 7706(f)(1)(C)''.
       (45) Section 2032A(c)(7)(D) is amended by striking 
     ``section 152(f)(2)'' and inserting ``section 7706(f)(2)''.
       (46) Section 5000A(b)(3)(A) is amended by striking 
     ``section 152'' and inserting ``section 7706''.
       (47) Section 5000A(c)(4)(A) is amended by striking ``the 
     number of individuals for whom the taxpayer is allowed a 
     deduction under section 151 (relating to allowance of 
     deduction for personal exemptions) for the taxable year'' and 
     inserting ``the sum of 1 (2 in the case of a joint return) 
     plus the number of the taxpayer's dependents for the taxable 
     year''.
       (48) 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 7706 for purposes of any provision of this title''.
       (49) Section 6213(g)(2)(H) is amended by striking ``section 
     21 (relating to expenses for household and dependent care 
     services necessary for gainful employment) or section 151 
     (relating to allowance of deductions for personal 
     exemptions)'' and inserting ``subsection (a)(1)(B), 
     (b)(1)(A)(ii), or (b)(1)(B) of section 2 or section 
     36B(b)(3)(B)''.
       (50) Section 7702B(f)(2)(C)(iii) is amended by striking 
     ``section 152(d)(2)'' and inserting ``section 7706(d)(2)''.
       (51) Section 7703(a) is amended by striking ``part V of 
     subchapter B of chapter 1 and''.
       (52) Section 7703(b)(1) is amended by striking ``section 
     152(f)(1))'' and all that follows and inserting ``section 
     7706(f)(1)) who is a dependent of such individual for the 
     taxable year (or would be but for section 7706(e)),''.
       (53) Section 7706(a), as redesignated by this section, is 
     amended by striking ``this subtitle'' and inserting 
     ``subtitle A''.
       (54) Section 7706(e)(3), as redesignated by this section, 
     is amended by inserting ``(as in effect before its repeal)'' 
     after ``section 151''.
       (55) The table of parts for subchapter B of chapter 1 is 
     amended by striking the item relating to part V.
       (56) The table of sections for chapter 79 is amended by 
     adding at the end the following new item:

``Sec. 7706. Dependent defined.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2021.

     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, 2021'' after ``67(c)(2)(B)''.
       (4) Section 562(c) is amended by inserting ``, as in effect 
     on December 31, 2021'' after ``67(c)(2)(B)''.
       (5) Section 642(b)(2)(C)(i)(II) is amended by inserting ``, 
     and as in effect on December 31, 2021'' after ``642(b)''.
       (6) Section 6654(d)(1)(C)(iii) is amended by inserting ``, 
     as in effect on December 31, 2021'' before the period.
       (c) Effective Date.--The repeal and the amendments made by 
     this section shall apply to taxable years beginning after 
     December 31, 2021.

     SEC. 204. RESTORATION OF CERTAIN DEDUCTIONS.

       (a) Deduction for Qualified Residence Interest.--Section 
     163(h)(3) is amended by striking subparagraph (F).
       (b) Deduction for State and Local Taxes.--Section 164(b) is 
     amended by striking paragraph (6).
       (c) Deduction for Personal Casualty Losses.--Section 165(h) 
     is amended by striking paragraph (5).
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2021.

     SEC. 205. 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, 2021.''.

     SEC. 206. 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).

[[Page S7551]]

       (3) Sections 34, 35, and 36.
       (4) Part VI of subchapter A of chapter 1 (relating to 
     alternative minimum tax).
       (5) Section 199A (relating to deduction for qualified 
     business income).
       (6) Section 217 (relating to moving expenses).
       (7) Section 221 (relating to interest on education loans).
       (8) Section 222 (relating to qualified tuition and related 
     expenses).
       (9) 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, 2021.

     SEC. 207. 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

[[Page S7552]]

     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 2022, 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 `2021' for `2016' in 
     subparagraph (A)(ii) 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, 
     2021.

     SEC. 208. 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, 
     2021.

          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'

[[Page S7553]]

     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.
                                 ______
                                 
      By Mr. WYDEN (for himself, Mr. Bennet, Mr. Brown, Mr. Casey, Ms. 
        Cortez Masto, Mr. Durbin, Ms. Klobuchar, and Mrs. Murray):
  S. 5035. A bill to amend the Internal Revenue Code of 1986 to provide 
matching payments for retirement savings contributions by certain 
individuals; to the Committee on Finance.
  Mr. WYDEN. Mr. President, today I have introduced the Encouraging 
Americans to Save Act (EASA). This legislation makes common sense 
reforms to the saver's tax credit by making the credit refundable and 
restructuring it as a government matching contribution that is directly 
deposited into a worker's retirement savings account.
  This bill would offer matching contributions for the first time to 
millions of middle and lower income individuals not covered by an 
employer-sponsored retirement plan, including those who save through an 
IRA under a State or local government savings program-such as workers 
in my home State of Oregon under the OregonSaves program. The 
government match is also available to middle and lower income savers 
who participate in an employer-sponsored plan.
  The government match provided by the bill would both encourage saving 
and help middle and low income earners build assets by providing an 
immediate, meaningful return on their personal contributions. The 
legislation would also establish a coronavirus bonus recovery credit 
that would provide an additional government match of up to $5,000 to 
workers on their retirement saving for a five year period beginning in 
2022. I urge my colleagues to support this legislation.
                                 ______
                                 
      By Mr. GRAHAM:
  S. 5036. A bill to amend the Overtime Pay for Protective Services Act 
of 2016 to extend the Secret Service overtime pay exception through 
2023, and for other purposes; considered and passed.

                                S. 5036

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Secret Service Overtime Pay 
     Extension Act''.

     SEC. 2. EXTENSION OF OVERTIME PAY EXCEPTION THROUGH 2023 FOR 
                   PROTECTIVE SERVICES.

       (a) In General.--Section 2 of the Overtime Pay for 
     Protective Services Act of 2016 (5 U.S.C. 5547 note) is 
     amended--
       (1) in the section heading, by striking ``2020'' and 
     inserting ``2023'';
       (2) in subsection (a), by striking ``during 2016, 2017, 
     2018, 2019, or 2020'' and inserting ``during any of calendar 
     years 2016 through 2023''; and
       (3) in subsection (b)(1)--
       (A) by inserting ``for a given calendar year'' after ``for 
     premium pay''; and
       (B) by striking ``during 2016, 2017, 2018, 2019, and 2020'' 
     and inserting ``during each of calendar years 2016 through 
     2023''.
       (b) Reports.--
       (1) Definition.--In this subsection, the term ``appropriate 
     committees of Congress'' means the Committee on 
     Appropriations, the Committee on Homeland Security and 
     Governmental Affairs, and the Committee on the Judiciary of 
     the Senate and the Committee on Appropriations, the Committee 
     on Oversight and Reform, and the Committee on the Judiciary 
     of the House of Representatives.
       (2) Report on extensions.--Not later than January 30 of 
     each of calendar years 2021, 2022, and 2023, the Director of 
     the United States Secret Service shall submit to the 
     appropriate committees of Congress a report on the effects of 
     the amendments made by subsection (a) and the amendments made 
     by section 2(a) of the Secret Service Overtime Pay Extension 
     Act (Public Law 115-383; 132 Stat. 5121), which shall 
     include, with respect to the previous calendar year, the 
     information described under paragraphs (1) through (7) of 
     section 2(c) of the Secret Service Recruitment and Retention 
     Act of 2018 (Public Law 115-160; 132 Stat. 1246).
       (3) Open recommendations.--Not later than 60 days after the 
     date of enactment of this Act, the Director of the United 
     States Secret Service shall submit to the appropriate 
     committees of Congress a report discussing the progress of 
     the United States Secret Service in implementing each 
     recommendation of the Government Accountability Office to the 
     United States Secret Service that has not been designated as 
     closed by the Comptroller General of the United States.
       (4) Protective mission panel.--Not later than 1 year after 
     the date of enactment of this Act, the Comptroller General of 
     the United States shall submit to the appropriate committees 
     of Congress a report on the extent of the progress made by 
     the United States Secret Service in implementing the 
     recommendations of the United States Secret Service 
     Protective Mission Panel, including in particular those items 
     pertaining to training and personnel enumerated in the 
     Executive Summary to Report from the United States Secret 
     Service Protective Mission Panel to the Secretary of Homeland 
     Security dated December 15, 2014.
       (c) Repeal of Superseded Reporting Requirement.--Section 
     2(b) of the Secret Service Overtime Pay Extension Act (Public 
     Law 115-383; 132 Stat. 5121) is repealed.

                          ____________________