[Congressional Record (Bound Edition), Volume 158 (2012), Part 9]
[Senate]
[Pages 12107-12112]
[From the U.S. Government Publishing Office, www.gpo.gov]




                        MIDDLE CLASS TAX CUT ACT

  The PRESIDING OFFICER. The clerk will state the bill by title.
  The bill clerk read as follows:

       A bill (S. 3412) to amend the Internal Revenue Code of 1986 
     to provide tax relief to middle-class families.

  The PRESIDING OFFICER. The Senator from Utah.


                           Amendment No. 2573

  Mr. HATCH. Madam President, I call up amendment No. 2573 and ask for 
its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The bill clerk read as follows:

       The Senator from Utah [Mr. Hatch], for himself and Mr. 
     McConnell, proposes an amendment numbered 2573.

  The amendment is as follows:

                (Purpose: In the nature of a substitute)

       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Tax Hike Prevention Act of 
     2012''.

     SEC. 2. TEMPORARY EXTENSION OF 2001 TAX RELIEF.

       (a) In General.--Section 901 of the Economic Growth and Tax 
     Relief Reconciliation Act of 2001 is amended by striking 
     ``December 31, 2012'' both places it appears and inserting 
     ``December 31, 2013''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in the enactment of the 
     Economic Growth and Tax Relief Reconciliation Act of 2001.

     SEC. 3. TEMPORARY EXTENSION OF 2003 TAX RELIEF.

       (a) In General.--Section 303 of the Jobs and Growth Tax 
     Relief Reconciliation Act of 2003 is amended by striking 
     ``December 31, 2012'' and inserting ``December 31, 2013''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in the enactment of the Jobs 
     and Growth Tax Relief Reconciliation Act of 2003.

     SEC. 4. ALTERNATIVE MINIMUM TAX RELIEF.

       (a) Temporary Extension of Increased Alternative Minimum 
     Tax Exemption Amount.--
       (1) In general.--Paragraph (1) of section 55(d) of the 
     Internal Revenue Code of 1986 is amended--
       (A) by striking ``$72,450'' and all that follows through 
     ``2011'' in subparagraph (A) and inserting ``$78,750 in the 
     case of taxable years beginning in 2012 and $79,850 in the 
     case of taxable years beginning in 2013'', and
       (B) by striking ``$47,450'' and all that follows through 
     ``2011'' in subparagraph (B) and inserting ``$50,600 in the 
     case of taxable years beginning in 2012 and $51,150 in the 
     case of taxable years beginning in 2013''.
       (b) Temporary Extension of Alternative Minimum Tax Relief 
     for Nonrefundable Personal Credits.--
       (1) In general.--Paragraph (2) of section 26(a) of the 
     Internal Revenue Code of 1986 is amended--
       (A) by striking ``or 2011'' and inserting ``2011, 2012, or 
     2013'', and
       (B) by striking ``2011'' in the heading thereof and 
     inserting ``2013''.
       (c)  Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2011.

     SEC. 5. EXTENSION OF INCREASED EXPENSING LIMITATIONS AND 
                   TREATMENT OF CERTAIN REAL PROPERTY AS SECTION 
                   179 PROPERTY.

       (a) In General.--

[[Page 12108]]

       (1) Dollar limitation.--Section 179(b)(1) of the Internal 
     Revenue Code of 1986 is amended--
       (A) by striking ``2010 or 2011,'' in subparagraph (B) and 
     inserting ``2010, 2011, 2012, or 2013, and'',
       (B) by striking subparagraph (C),
       (C) by redesignating subparagraph (D) as subparagraph (C), 
     and
       (D) in subparagraph (C), as so redesignated, by striking 
     ``2012'' and inserting ``2013''.
       (2) Reduction in limitation.--Section 179(b)(2) of such 
     Code is amended--
       (A) by striking ``2010 or 2011,'' in subparagraph (B) and 
     inserting ``2010, 2011, 2012, or 2013, and'',
       (B) by striking subparagraph (C),
       (C) by redesignating subparagraph (D) as subparagraph (C), 
     and
       (D) in subparagraph (C), as so redesignated, by striking 
     ``2012'' and inserting ``2013''.
       (3) Conforming amendment.--Subsection (b) of section 179 of 
     such Code is amended by striking paragraph (6).
       (b) Computer Software.--Section 179(d)(1)(A)(ii) of the 
     Internal Revenue Code of 1986 is amended by striking ``2013'' 
     and inserting ``2014''.
       (c) Election.--Section 179(c)(2) of the Internal Revenue 
     Code of 1986 is amended by striking ``2013'' and inserting 
     ``2014''.
       (d) Special Rules for Treatment of Qualified Real 
     Property.--
       (1) In general.--Section 179(f)(1) of the Internal Revenue 
     Code of 1986 is amended by striking ``2010 or 2011'' and 
     inserting ``2010, 2011, 2012, or 2013''.
       (2) Carryover limitation.--
       (A) In general.--Section 179(f)(4) of such Code is amended 
     by striking ``2011'' each place it appears and inserting 
     ``2013''.
       (B) Conforming amendment.--The heading for subparagraph (C) 
     of section 179(f)(4) of such Code is amended by striking 
     ``2010'' and inserting ``2010, 2011 and 2012''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2011.

     SEC. 6. INSTRUCTIONS FOR TAX REFORM.

       (a) In General.--The Senate Committee on Finance shall 
     report legislation not later than 12 months after the date of 
     the enactment of this Act that consists of changes in laws 
     within its jurisdiction which meet the requirements of 
     subsection (b).
       (b) Requirements.--Legislation meets the requirements of 
     this subsection if the legislation--
       (1) simplifies the Internal Revenue Code of 1986 by 
     reducing the number of tax preferences and reducing 
     individual tax rates proportionally, with the highest 
     individual tax rate significantly below 35 percent;
       (2) permanently repeals the alternative minimum tax;
       (3) is projected, when compared to the current tax policy 
     baseline, to be revenue neutral or result in revenue losses;
       (4) has a dynamic effect which is projected to stimulate 
     economic growth and lead to increased revenue;
       (5) applies any increased revenue from stimulated economic 
     growth to additional rate reductions and does not permit any 
     such increased revenue to be used for additional Federal 
     spending;
       (6) retains a progressive tax code; and
       (7) provides for revenue-neutral reform of the taxation of 
     corporations and businesses by--
       (A) providing a top tax rate on corporations of no more 
     than 25 percent; and
       (B) implementing a competitive territorial tax system.

  Mr. HATCH. Madam President, I ask for the yeas and nays on the 
amendment.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The question is on agreeing to the amendment.
  The clerk will call the roll.
  The bill clerk called the roll.
  Mr. KYL. The following Senator is necessarily absent: the Senator 
from Illinois (Mr. Kirk).
  The VICE PRESIDENT. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 45, nays 54, as follows:

                      [Rollcall Vote No. 183 Leg.]

                                YEAS--45

     Alexander
     Ayotte
     Barrasso
     Blunt
     Boozman
     Burr
     Chambliss
     Coats
     Coburn
     Cochran
     Corker
     Cornyn
     Crapo
     DeMint
     Enzi
     Graham
     Grassley
     Hatch
     Heller
     Hoeven
     Hutchison
     Inhofe
     Isakson
     Johanns
     Johnson (WI)
     Kyl
     Lee
     Lugar
     McCain
     McConnell
     Moran
     Murkowski
     Paul
     Portman
     Pryor
     Risch
     Roberts
     Rubio
     Sessions
     Shelby
     Snowe
     Thune
     Toomey
     Vitter
     Wicker

                                NAYS--54

     Akaka
     Baucus
     Begich
     Bennet
     Bingaman
     Blumenthal
     Boxer
     Brown (MA)
     Brown (OH)
     Cantwell
     Cardin
     Carper
     Casey
     Collins
     Conrad
     Coons
     Durbin
     Feinstein
     Franken
     Gillibrand
     Hagan
     Harkin
     Inouye
     Johnson (SD)
     Kerry
     Klobuchar
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Manchin
     McCaskill
     Menendez
     Merkley
     Mikulski
     Murray
     Nelson (NE)
     Nelson (FL)
     Reed
     Reid
     Rockefeller
     Sanders
     Schumer
     Shaheen
     Stabenow
     Tester
     Udall (CO)
     Udall (NM)
     Warner
     Webb
     Whitehouse
     Wyden

                             NOT VOTING--1

       
     Kirk
       
  The amendment (No. 2573) was rejected.
  The VICE PRESIDENT. The majority leader.
  Mr. REID. Mr. President, the Republicans' tax hike on the middle 
class has just been defeated. Their plan would have raised taxes by 
about $1,000 for 25 million middle-class families while giving 
millionaires an average of a $160,000 tax break. So let's look at that. 
Their bill would have raised taxes on 25 million middle-class families 
by about $1,000 a year, and it would have given millionaires a $160,000 
tax break. Those numbers are staggering. Their bill would have raised 
taxes on parents trying to pay for college, on families--especially 
large families--with children. So it is no wonder a majority of 
Senators opposed that legislation.
  In just a short time there will be a bill that will pass cut taxes 
for 98 percent of Americans, including every middle-class taxpayer and 
more than 97 percent of small businesses. This plan, proposed by 
President Obama, would cut taxes for 114 million American families. 
Theirs raises taxes for 25 million middle-class families. This is the 
only bill that has a chance of becoming law, so it is the only plan 
that would actually give a middle-class family the security of avoiding 
their fiscal cliff. The House should take up this legislation and pass 
it.
  President Obama believes we must keep taxes low for 98 percent of 
Americans. Democrats agree. So do the majority of Americans. A majority 
of Americans, including a majority of Republicans, around this country 
believe taxes should remain low for the middle class but the top 2 
percent should pay their fair share to reduce the debt. The bill the 
Senate is about to pass respects the will of the American people, 
including a majority of Republicans in America outside the Halls of 
this Congress. Republican Members of Congress disagree with a majority 
of Republicans.
  The President, of course, has said he will sign the bill immediately. 
But now Republicans are threatening to hide behind yet another arcane 
procedural maneuver to stall this crucial legislation, and this will 
get the attention of the American people. They are threatening to do 
something called blue slip this because revenue-raising resolutions 
must be originated in the House of Representatives. But my Republican 
colleagues have very short memories. Senate Republicans are all too 
happy to bypass the procedural hoop when it suits their purposes. They 
are willing to go around it when it is time to reauthorize the FAA. 
They were willing to sidestep it when we passed the Violence Against 
Women Act. We did that here in the Senate. They were willing to dodge 
it when we passed the Transportation bill that was so important to this 
country. But now their excuse for stalling a tax cut for 98 percent of 
the American people is an old procedural trick that the American people 
do not understand, and rightfully so.
  If Republicans in the House fail to act on this bill, taxes will rise 
by $2,200 for the typical middle-class family of four. That is $2,200 
less to spend on gas, groceries, rent, and life in general for these 
people. This tax hike on ordinary families couldn't come at a worse 
time--just as our economy is doing its utmost to get back on its feet.
  Republicans should not force middle-class families off their fiscal 
cliff to protect more wasteful giveaways to millionaires and 
billionaires--an average of $160,000 a year per millionaire. Democrats 
believe this country can't afford more budget-busting giveaways for the 
top 2 percent of earners. Again, Republicans in America agree with us. 
It is only here in the Senate that the Republicans don't agree. But 
that is a

[[Page 12109]]

debate we are willing to have, and the House Republicans need not hold 
tax cuts for the middle class hostage in order to have that debate. 
They can and should pass our middle-class tax cuts immediately.
  Once we give middle-class families security, we can spend the next 5 
months debating whether wealthy families need more tax breaks. We know 
how the American people feel--just like we do.
  The VICE PRESIDENT. The Republican leader.
  Mr. McCONNELL. Mr. President, first let me welcome the Vice President 
here today, our good friend who served for so many years in the Senate.
  It reminds me of the negotiation he and I conducted in December of 
2010. I got a call from the Vice President one day, and he said: The 
President thought we ought to talk about the possibility of extending 
the current tax rates for everyone because the economy is not doing 
very well, and the worst thing we could do would be to raise taxes on 
anyone in the middle of this economic situation.
  I said: Mr. Vice President, I think that is something we would be 
interested in.
  So the Vice President and I negotiated for a period of time and 
agreed that because the economy was not doing well in December 2010, we 
ought to extend the current tax rates for everyone.
  I can remember the signing ceremony. I was there. The majority leader 
was not. The Speaker of the House was not. The President made a speech 
in signing an extension of the current tax rates for everyone that I 
could have made myself. Forty Members of the Senate on the Democratic 
side voted for it.
  Today, my colleagues, the economy is growing slower than it was in 
December of 2010. So we know this is not about the economy; we know 
this is about the election. We all know there is an election going on. 
There is politics from time to time practiced here in the Senate. I am 
not offended by that. But I think what the American people would like 
to hear from us is a response to the economic situation.
  This proposal guarantees that taxes will go up on roughly 1 million 
of our most successful small businesses. Over 50 percent of small 
business income--25 percent of the workforce--will be affected by it. 
It guarantees that taxes will go up on capital gains, on dividends, 
which provide the income for a huge number of our senior citizens. This 
is a uniquely bad idea. It may poll well, as my friend the majority 
leader indicated, but, of course, the fact that he needed to mention 
that illustrates the point that this is more about the election than it 
is about the economy.
  So I would predict there will probably be bipartisan opposition to 
this proposal. I am sure a few arms have been twisted in order to get 
the result. The Vice President is at a disadvantage: he can't speak, 
being an occupant of the chair. But in this particular instance, he is 
actually better not to because he would have the dilemma of trying to 
explain the difference between the economic situation the country 
confronts today and the condition the country confronted in December of 
2010 when the economy was doing better. So be grateful, I say to my 
friend the Vice President. This is a debate I don't think you would 
want to lead.
  With that, my colleagues and friends, I urge a ``no'' vote on this 
very, very bad idea for the U.S. economy.
  The VICE PRESIDENT. The majority leader.
  Mr. REID. Mr. President, in 2010 the country was staring at what had 
taken place the prior 8 years--8 million jobs lost. What has happened 
in the years since 2010 that my friend the Republican leader talks 
about? This administration has created 4.5 million jobs. We haven't 
filled the hole we lost during the 8 years of the prior President, but 
we have made some progress. We all acknowledge we need to do more, but 
don't ever compare today with 2010.
  First of all, everyone understands, all you folks who love to give 
tax cuts to the millionaires, our bill does that also. The first 
$250,000 they make is treated just like a middle-class family.
  I would also point everyone to this. I have talked about the 
Republicans around the country supporting this legislation. Of course 
they do. They know the deficit needs to be handled, and they know that 
about $1 trillion is what our legislation will do to fill the hole of 
the debt.
  But also, people who are in this great country of ours who have done 
so well understand that they are supposed to contribute more. They know 
that. My friend doesn't like to hear polls, but let me give him another 
one. Sixty-five percent of these really rich people are willing to pay 
more taxes. Again, the people who are unwilling to do this are people 
who signed a pledge for this person, Grover Norquist. And remember, 
there was a little vacillating about a month ago, so he came up here 
and had somebody renew their vows with him.
  So we are on the side of the angels; we are on the side of the 
American people because this legislation that is going to pass is what 
is good for the American people. And I ask that we have that vote now.
  Mr. McCONNELL addressed the Chair.
  Mr. REID. Remember, I always get the last word.
  Mr. McCONNELL. Let me briefly add that I listened carefully to what 
my friend the majority leader said. He once again was making it clear 
this is about the campaign. It is about the campaign and not about the 
economy.
  But if you listen carefully to the rhetoric, what he is saying here 
is that these million businesses didn't create this success; that we 
somehow need to take this money because we will spend it better on 
their behalf.
  Now, I know my colleague is going to get the last word, and that is 
fine. I am happy for him to have it. But the fact is this: The economy 
is in worse shape today than it was in December of 2010--worse shape 
today. The growth rate is slower. The President signed this bill, 
advocated its passage back then because the economy didn't need to get 
hit with a big tax increase. The growth rate is slower today. The 
economic situation remains largely the same. The worst we could do in 
the middle of this economic condition is to pass this tax increase.
  Now my friend the majority leader can have the last word, and then we 
will be happy to go to a vote.
  The VICE PRESIDENT. The majority leader.
  Mr. REID. Mr. President, they may have different newspapers in 
Kentucky than I read. I get my Nevada clips every day. I try to read 
some papers from back home. We have now 28 months of job growth in the 
private sector, 20 months in a row. That is pretty good.
  This legislation is about the debt. It is about the debt. We have to 
do something about the debt, and we have tried mightily to do that. We 
have tried mightily.
  We had the Conrad-Judd Gregg legislation. Seven people who are 
Republican Senators who cosponsored that wouldn't vote for it and allow 
me to get it on the floor because they had adopted the Republican 
leader's philosophy that the most important thing we can do is defeat 
President Obama for reelection. Then we went to Bowles-Simpson, which 
was a program we put together when we couldn't get that legislation. 
That was so good, by two of our best financial minds in the Senate, 
Judd Gregg and Kent Conrad. And Bowles-Simpson didn't make it. Then we 
had a series of talks with the President and the Speaker. Always, we 
could never quite get it done. Why? Even though my friend and I care 
about him, John Boehner said, I want to do big things, not little 
things. One of the little things he couldn't do is get his caucus to 
agree to just a little bit of revenue so we could have a deal, the 
grand bargain. Then we tried the Biden talks. The majority leader in 
the House of Representatives walked out on those talks. Then we had the 
supercommittee, and about 1 week before, by statute, Patty Murray and 
her troops were supposed to offer the legislation, I got a letter 
signed by virtually every Republican Senator saying: No thanks. Grover 
wins again. No revenues.
  This is about our country, about doing something about a debt. It 
will

[[Page 12110]]

contribute about $1 trillion to the debt. That is not bad.
  The VICE PRESIDENT. The Republican leader.
  Mr. McCONNELL. Mr. President, I heard my good friend the majority 
leader say this is about the deficit. This will produce enough revenue 
to operate the government for about 1 week. This would produce about 
enough revenue to operate the government for about 1 week.
  This is not about the deficit or the debt, this is about the 
campaign. We all know there is a campaign going on, but why don't we do 
serious legislating here? No budget, no appropriation bills, no DOD 
authorization bill. When are we going to actually pass things in the 
Senate?
  This is a uniquely bad idea for the economy. The good news that I can 
say to the American people is that it isn't going to happen today. It 
ought not to happen anytime. This is part of the fiscal cliff we are 
facing at the end of the year. The Chairman of the Fed is concerned 
about it, the Congressional Budget Office, which Republicans certainly 
don't run, is concerned about it. We have heard talk on the other side 
that we should have Thelma and Louise economics and just drive the 
country right off the cliff. We all get in the car and go right off the 
cliff together and see what it is like.
  The American people know a campaign is going on, but why don't we in 
here try to do something important for the country now. The campaign 
will take care of itself. This is not a serious piece of legislation 
because it is not going anywhere, and thank goodness it is not going 
anywhere because it would be bad for the economy and the single worst 
thing we could do to the country.
  The VICE PRESIDENT. The majority leader.
  Mr. REID. Mr. President, required reading for decades now has been 
George Orwell. College students read it now just like I did when I was 
in college. George Orwell came to the conclusion that we have arrived 
at a time where up is down and down is up, and that is what my friend, 
the Republican leader, has done. If there were ever a statement 
Orwellian, it is his.
  We haven't done the appropriations bill. Stop and think just 1 
minute. Does the minority leader think 85 filibusters had anything to 
do with that? Eighty-five filibusters. We haven't done a budget. That 
is poppycock. We have one. We did it, and my Republican friends--I 
appreciate it--voted with us. We have our numbers right now. We could 
have done every appropriations bill. Chairman Inouye marked them up. We 
can't do them because we have to overcome 85 filibusters.
  For my friend to say, let's do something important, please--is this 
bill we are going to pass important? You bet it is. He said it would 
only pay for the government for 1 week or whatever the number was. Over 
10 years, it is $1 trillion. Over 1 year, it is $100 billion. Even in 
Las Vegas that is not chump change.
  I wish we would vote now.
  The VICE PRESIDENT. The question is on the engrossment and third 
reading of the bill.
  The bill was ordered to be engrossed for a third reading and was read 
the third time.
  The VICE PRESIDENT. The question is on the passage of S. 3412.
  Mr. McCONNELL. I ask for the yeas and nays.
  The VICE PRESIDENT. Is there a sufficient second?
  There appears to be a sufficient second.
  The clerk will call the roll.
  Mr. KYL. The following Senator is necessarily absent: the Senator 
from Illinois (Mr. Kirk).
  The VICE PRESIDENT. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 51, nays 48, as follows:

                      [Rollcall Vote No. 184 Leg.]

                                YEAS--51

     Akaka
     Baucus
     Begich
     Bennet
     Bingaman
     Blumenthal
     Boxer
     Brown (OH)
     Cantwell
     Cardin
     Carper
     Casey
     Conrad
     Coons
     Durbin
     Feinstein
     Franken
     Gillibrand
     Hagan
     Harkin
     Inouye
     Johnson (SD)
     Kerry
     Klobuchar
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Manchin
     McCaskill
     Menendez
     Merkley
     Mikulski
     Murray
     Nelson (NE)
     Nelson (FL)
     Pryor
     Reed
     Reid
     Rockefeller
     Sanders
     Schumer
     Shaheen
     Stabenow
     Tester
     Udall (CO)
     Udall (NM)
     Warner
     Whitehouse
     Wyden

                                NAYS--48

     Alexander
     Ayotte
     Barrasso
     Blunt
     Boozman
     Brown (MA)
     Burr
     Chambliss
     Coats
     Coburn
     Cochran
     Collins
     Corker
     Cornyn
     Crapo
     DeMint
     Enzi
     Graham
     Grassley
     Hatch
     Heller
     Hoeven
     Hutchison
     Inhofe
     Isakson
     Johanns
     Johnson (WI)
     Kyl
     Lee
     Lieberman
     Lugar
     McCain
     McConnell
     Moran
     Murkowski
     Paul
     Portman
     Risch
     Roberts
     Rubio
     Sessions
     Shelby
     Snowe
     Thune
     Toomey
     Vitter
     Webb
     Wicker

                             NOT VOTING--1

       
     Kirk
       
  The bill (S. 3412) was passed, as follows:

                                S. 3412

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

     SECTION 1. SHORT TITLE; ETC.

       (a) Short Title.--This Act may be cited as the ``Middle 
     Class Tax Cut Act''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in this Act an amendment or repeal is 
     expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of the Internal 
     Revenue Code of 1986.
       (c) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; etc.

               TITLE I--TEMPORARY EXTENSION OF TAX RELIEF

Sec. 101. Temporary extension of 2001 tax relief.
Sec. 102. Temporary extension of 2003 tax relief.
Sec. 103. Temporary extension of 2010 tax relief.
Sec. 104. Temporary extension of election to expense certain 
              depreciable business assets.

                TITLE II--ALTERNATIVE MINIMUM TAX RELIEF

Sec. 201. Temporary extension of increased alternative minimum tax 
              exemption amount.
Sec. 202. Temporary extension of alternative minimum tax relief for 
              nonrefundable personal credits.

                      TITLE III--BUDGETARY EFFECTS

Sec. 301. Budgetary effects.

               TITLE I--TEMPORARY EXTENSION OF TAX RELIEF

     SEC. 101. TEMPORARY EXTENSION OF 2001 TAX RELIEF.

       (a) Temporary Extension.--
       (1) In general.--Section 901(a)(1) of the Economic Growth 
     and Tax Relief Reconciliation Act of 2001 is amended by 
     striking ``December 31, 2012'' and inserting ``December 31, 
     2013''.
       (2) Effective date.--The amendment made by this subsection 
     shall take effect as if included in the enactment of the 
     Economic Growth and Tax Relief Reconciliation Act of 2001.
       (b) Application to Certain High-Income Taxpayers.--
       (1) Income tax rates.--
       (A) Treatment of 25- and 28-percent rate brackets.--
     Paragraph (2) of section 1(i) is amended to read as follows:
       ``(2) 25- and 28-percent rate brackets.--The tables under 
     subsections (a), (b), (c), (d), and (e) shall be applied--
       ``(A) by substituting `25%' for `28%' each place it appears 
     (before the application of subparagraph (B)), and
       ``(B) by substituting `28%' for `31%' each place it 
     appears.''.
       (B) 33-percent rate bracket.--Subsection (i) of section 1 
     is amended by redesignating paragraph (3) as paragraph (4) 
     and by inserting after paragraph (2) the following new 
     paragraph:
       ``(3) 33-percent rate bracket.--
       ``(A) In general.--In the case of taxable years beginning 
     after December 31, 2012--
       ``(i) the rate of tax under subsections (a), (b), (c), and 
     (d) on a taxpayer's taxable income in the fourth rate bracket 
     shall be 33 percent to the extent such income does not exceed 
     an amount equal to the excess of--

       ``(I) the applicable amount, over
       ``(II) the dollar amount at which such bracket begins, and

       ``(ii) the 36 percent rate of tax under such subsections 
     shall apply only to the taxpayer's taxable income in such 
     bracket in excess of the amount to which clause (i) applies.
       ``(B) Applicable amount.--For purposes of this paragraph, 
     the term `applicable amount' means the excess of--
       ``(i) the applicable threshold, over
       ``(ii) the sum of the following amounts in effect for the 
     taxable year:

[[Page 12111]]

       ``(I) the basic standard deduction (within the meaning of 
     section 63(c)(2)), and
       ``(II) the exemption amount (within the meaning of section 
     151(d)(1) (or, in the case of subsection (a), 2 such 
     exemption amounts).

       ``(C) Applicable threshold.--For purposes of this 
     paragraph, the term `applicable threshold' means--
       ``(i) $250,000 in the case of subsection (a),
       ``(ii) $225,000 in the case of subsection (b),
       ``(iii) $200,000 in the case of subsections (c), and
       ``(iv) \1/2\ the amount applicable under clause (i) (after 
     adjustment, if any, under subparagraph (E)) in the case of 
     subsection (d).
       ``(D) Fourth rate bracket.--For purposes of this paragraph, 
     the term `fourth rate bracket' means the bracket which would 
     (determined without regard to this paragraph) be the 36-
     percent rate bracket.
       ``(E) Inflation adjustment.--For purposes of this 
     paragraph, with respect to taxable years beginning in 
     calendar years after 2012, each of the dollar amounts under 
     clauses (i), (ii), and (iii) of subparagraph (C) shall be 
     adjusted in the same manner as under paragraph (1)(C), except 
     that subsection (f)(3)(B) shall be applied by substituting 
     `2008' for `1992'.''.
       (2) Phaseout of personal exemptions and itemized 
     deductions.--
       (A) Overall limitation on itemized deductions.--Section 68 
     is amended--
       (i) by striking ``the applicable amount'' the first place 
     it appears in subsection (a) and inserting ``the applicable 
     threshold in effect under section 1(i)(3)'',
       (ii) by striking ``the applicable amount'' in subsection 
     (a)(1) and inserting ``such applicable threshold'',
       (iii) by striking subsection (b) and redesignating 
     subsections (c), (d), and (e) as subsections (b), (c), and 
     (d), respectively, and
       (iv) by striking subsections (f) and (g).
       (B) Phaseout of deductions for personal exemptions.--
       (i) In general.--Paragraph (3) of section 151(d) is 
     amended--

       (I) by striking ``the threshold amount'' in subparagraphs 
     (A) and (B) and inserting ``the applicable threshold in 
     effect under section 1(i)(3)'',
       (II) by striking subparagraph (C) and redesignating 
     subparagraph (D) as subparagraph (C), and
       (III) by striking subparagraphs (E) and (F).

       (ii) Conforming amendments.--Paragraph (4) of section 
     151(d) is amended--

       (I) by striking subparagraph (B),
       (II) by redesignating clauses (i) and (ii) of subparagraph 
     (A) as subparagraphs (A) and (B), respectively, and by 
     indenting such subparagraphs (as so redesignated) 
     accordingly, and
       (III) by striking all that precedes ``in a calendar year 
     after 1989,'' and inserting the following:

       ``(4) Inflation adjustment.--In the case of any taxable 
     year beginning''.
       (c) Effective Date.--Except as otherwise provided, the 
     amendments made by this section shall apply to taxable years 
     beginning after December 31, 2012.
       (d) Application of EGTRRA Sunset.--Each amendment made by 
     subsection (b) shall be subject to title IX of the Economic 
     Growth and Tax Relief Reconciliation Act of 2001 to the same 
     extent and in the same manner as if such amendment was 
     included in title I of such Act.

     SEC. 102. TEMPORARY EXTENSION OF 2003 TAX RELIEF.

       (a) Extension.--
       (1) In general.--Section 303 of the Jobs and Growth Tax 
     Relief Reconciliation Act of 2003 is amended by striking 
     ``December 31, 2012'' and inserting ``December 31, 2013''.
       (2) Effective date.--The amendment made by this subsection 
     shall take effect as if included in the enactment of the Jobs 
     and Growth Tax Relief Reconciliation Act of 2003.
       (b) 20-Percent Capital Gains Rate for Certain High Income 
     Individuals.--
       (1) In general.--Paragraph (1) of section 1(h) is amended 
     by striking subparagraph (C), by redesignating subparagraphs 
     (D) and (E) as subparagraphs (E) and (F) and by inserting 
     after subparagraph (B) the following new subparagraphs:
       ``(C) 15 percent of the lesser of--
       ``(i) so much of the adjusted net capital gain (or, if 
     less, taxable income) as exceeds the amount on which a tax is 
     determined under subparagraph (B), or
       ``(ii) the excess (if any) of--

       ``(I) the amount of taxable income which would (without 
     regard to this paragraph) be taxed at a rate below 36 
     percent, over
       ``(II) the sum of the amounts on which a tax is determined 
     under subparagraphs (A) and (B),

       ``(D) 20 percent of the adjusted net capital gain (or, if 
     less, taxable income) in excess of the sum of the amounts on 
     which tax is determined under subparagraphs (B) and (C),''.
       (2) Minimum tax.--Paragraph (3) of section 55(b) is amended 
     by striking subparagraph (C), by redesignating subparagraph 
     (D) as subparagraph (E), and by inserting after subparagraph 
     (B) the following new subparagraphs:
       ``(C) 15 percent of the lesser of--
       ``(i) so much of the adjusted net capital gain (or, if 
     less, taxable excess) as exceeds the amount on which tax is 
     determined under subparagraph (B), or
       ``(ii) the excess described in section 1(h)(1)(C)(ii), plus
       ``(D) 20 percent of the adjusted net capital gain (or, if 
     less, taxable excess) in excess of the sum of the amounts on 
     which tax is determined under subparagraphs (B) and (C), 
     plus''.
       (c) Conforming Amendments.--
       (1) The following provisions are each amended by striking 
     ``15 percent'' and inserting ``20 percent'':
       (A) Section 531.
       (B) Section 541.
       (C) Section 1445(e)(1).
       (D) The second sentence of section 7518(g)(6)(A).
       (E) Section 53511(f)(2) of title 46, United States Code.
       (2) Sections 1(h)(1)(B) and 55(b)(3)(B) are each amended by 
     striking ``5 percent (0 percent in the case of taxable years 
     beginning after 2007)'' and inserting ``0 percent''.
       (3) Section 1445(e)(6) is amended by striking ``15 percent 
     (20 percent in the case of taxable years beginning after 
     December 31, 2010)'' and inserting ``20 percent''.
       (d) Effective Dates.--
       (1) In general.--Except as otherwise provided, the 
     amendments made by subsections (b) and (c) shall apply to 
     taxable years beginning after December 31, 2012.
       (2) Withholding.--The amendments made by paragraphs (1)(C) 
     and (3) of subsection (c) shall apply to amounts paid on or 
     after January 1, 2013.
       (e) Application of JGTRRA Sunset.--Each amendment made by 
     subsections (b) and (c) shall be subject to section 303 of 
     the Jobs and Growth Tax Relief Reconciliation Act of 2003 to 
     the same extent and in the same manner as if such amendment 
     was included in title III of such Act.

     SEC. 103. TEMPORARY EXTENSION OF 2010 TAX RELIEF.

       (a) American Opportunity Tax Credit.--
       (1) In general.--Section 25A(i) is amended by striking ``or 
     2012'' and inserting ``2012, or 2013''.
       (2) Treatment of possessions.--Section 1004(c)(1) of 
     division B of the American Recovery and Reinvestment Tax Act 
     of 2009 is amended by striking ``and 2012'' each place it 
     appears and inserting ``2012, and 2013''.
       (b) Child Tax Credit.--Section 24(d)(4) is amended--
       (1) by striking ``and 2012'' in the heading and inserting 
     ``2012, and 2013'', and
       (2) by striking ``or 2012'' and inserting ``2012, or 
     2013''.
       (c) Earned Income Tax Credit.--Section 32(b)(3) is 
     amended--
       (1) by striking ``and 2012'' in the heading and inserting 
     ``2012, and 2013'', and
       (2) by striking ``or 2012'' and inserting ``2012, or 
     2013''.
       (d) Temporary Extension of Rule Disregarding Refunds in the 
     Administration of Federal Programs and Federally Assisted 
     Programs.--Subsection (b) of section 6409 is amended by 
     striking ``December 31, 2012'' and inserting ``December 31, 
     2013''.
       (e) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to taxable years 
     beginning after December 31, 2012.
       (2) Rule disregarding refunds in the administration of 
     certain programs.--The amendment made by subsection (d) shall 
     apply to amounts received after December 31, 2012.

     SEC. 104. TEMPORARY EXTENSION OF ELECTION TO EXPENSE CERTAIN 
                   DEPRECIABLE BUSINESS ASSETS.

       (a) In General.--
       (1) Dollar limitation.--Section 179(b)(1) is amended--
       (A) by striking ``and'' at the end of subparagraph (C),
       (B) by redesignating subparagraph (D) as subparagraph (E),
       (C) by inserting after subparagraph (C) the following new 
     subparagraph:
       ``(D) $250,000 in the case of taxable years beginning in 
     2013, and'', and
       (D) in subparagraph (E), as so redesignated, by striking 
     ``2012'' and inserting ``2013''.
       (2) Reduction in limitation.--Section 179(b)(2) is 
     amended--
       (A) by striking ``and'' at the end of subparagraph (C),
       (B) by redesignating subparagraph (D) as subparagraph (E),
       (C) by inserting after subparagraph (C) the following new 
     subparagraph:
       ``(D) $800,000 in the case of taxable years beginning in 
     2013, and'', and
       (D) in subparagraph (E), as so redesignated, by striking 
     ``2012'' and inserting ``2013''.
       (b) Computer Software.--Section 179(d)(1)(A)(ii) is amended 
     by striking ``2013'' and inserting ``2014''.
       (c) Election.--Section 179(c)(2) is amended by striking 
     ``2013'' and inserting ``2014''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2012.

                TITLE II--ALTERNATIVE MINIMUM TAX RELIEF

     SEC. 201. TEMPORARY EXTENSION OF INCREASED ALTERNATIVE 
                   MINIMUM TAX EXEMPTION AMOUNT.

       (a) In General.--Paragraph (1) of section 55(d) is 
     amended--

[[Page 12112]]

       (1) by striking ``$72,450'' and all that follows through 
     ``2011'' in subparagraph (A) and inserting ``$78,750 in the 
     case of taxable years beginning in 2012'', and
       (2) by striking ``$47,450'' and all that follows through 
     ``2011'' in subparagraph (B) and inserting ``$50,600 in the 
     case of taxable years beginning in 2012''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2011.

     SEC. 202. TEMPORARY EXTENSION OF ALTERNATIVE MINIMUM TAX 
                   RELIEF FOR NONREFUNDABLE PERSONAL CREDITS.

       (a) In General.--Paragraph (2) of section 26(a) is 
     amended--
       (1) by striking ``or 2011'' and inserting ``2011, or 
     2012'', and
       (2) by striking ``2011'' in the heading thereof and 
     inserting ``2012''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2011.

                      TITLE III--BUDGETARY EFFECTS

     SEC. 301. BUDGETARY EFFECTS.

       (a) PAYGO Scorecard.--The budgetary effects of this Act 
     shall not be entered on either PAYGO scorecard maintained 
     pursuant to section 4(d) of the Statutory Pay-As-You-Go Act 
     of 2010.
       (b) Senate PAYGO Scorecard.--The budgetary effects of this 
     Act shall not be entered on any PAYGO scorecard maintained 
     for purposes of section 201 of S. Con. Res. 21 (110th 
     Congress).

  Mr. REID. Mr. President, I move to reconsider the vote.
  Mr. DURBIN. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Ms. KLOBUCHAR. Mr. President, I rise today in support of the Middle 
Class Tax Relief Act. This afternoon, I voted for legislation that 
would have extended the middle-class tax cuts through 2013.
  In Minnesota, 2 million families and small businesses will see their 
Federal income taxes increase by an average of $1,600 unless the 
middle-class tax cuts are extended. Instead of waiting until the 
eleventh hour, this legislation would have provided certainty for 
families and small businesses that their already squeezed budgets won't 
have to be trimmed further in the coming year.
  I would like to make clear that extending the middle-class tax cuts 
is just the first step. There is a growing majority here that favors 
comprehensive tax reform that would simplify the Tax Code, broaden the 
base, and lower tax rates. Passing the middle-class tax cuts today 
would give us time to reach consensus on the details of reform that 
would streamline our Tax Code, pay down our debt, and ensure the United 
States remains competitive.
  We also must take action on the estate tax. If Congress does nothing, 
the exemption would drop to $1 million and the rate would rise to 55 
percent. This is not an acceptable outcome and would hurt farmers and 
small businesses in Minnesota who have worked hard to build a legacy 
they can pass on to their children and grandchildren. In the past we 
have come together to pass compromise levels that don't harm farmers 
and small business owners, while still being mindful of our deficit. I 
will work to ensure it happens again.
  Mr. BENNET. Mr. President, I rise to talk briefly about the estate 
tax and Colorado's agricultural community and small businesses. While I 
voted in favor of the Middle Class Tax Cut Act, I do not believe that 
this legislation represents an end to the tax reform debate in 
Washington. In particular, it is important that we find a bipartisan 
and responsible path forward on the estate tax that provides the 
necessary certainty for businesses and families across Colorado. This 
is vital for Colorado's economy. I am committed to working with my 
colleagues in Congress to establish an estate tax policy that works for 
small businesses, family farms and ranches, and all Coloradans.

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