[House Report 108-470]
[From the U.S. Government Publishing Office]



108th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     108-470

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PROVIDING FOR CONSIDERATION OF H.R. 4181--TO AMEND THE INTERNAL REVENUE 
 CODE OF 1986 TO PERMANENTLY EXTEND THE INCREASED STANDARD DEDUCTION, 
 AND THE 15-PERCENT INDIVIDUAL INCOME TAX RATE BRACKET EXPANSION, FOR 
                 MARRIED TAXPAYERS FILING JOINT RETURNS

                                _______
                                

   April 27, 2004.--Referred to the House Calendar and ordered to be 
                                printed

                                _______
                                

   Mrs. Myrick, from the Committee on Rules, submitted the following

                              R E P O R T

                       [To accompany H. Res. 607]

    The Committee on Rules, having had under consideration 
House Resolution 607, by a nonrecord vote, report the same to 
the House with the recommendation that the resolution be 
adopted.

                SUMMARY OF PROVISIONS OF THE RESOLUTION

    The resolution provides for the consideration of H.R. 4181, 
to amend the Internal Revenue Code of 1986 to permanently 
extend the increased standard deduction, and the 15-percent 
individual income tax rate bracket expansion, for married 
taxpayers filing joint returns, under a modified closed rule. 
The rule provides one hour of debate in the House equally 
divided and controlled by the chairman and ranking minority 
member of the Committee on Ways and Means.
    The rule provides that the amendment printed in part A of 
this report shall be considered as adopted, and that the bill 
shall be considered as read. The rule provides for 
consideration of the amendment printed in part B of this 
report, if offered by Representative Rangel of New York or his 
designee, which shall be considered as read, and shall be 
separately debatable for one hour equally divided and 
controlled by the proponent and an opponent. The rule waives 
all points of order against the amendment printed in part B of 
this report.
    Finally, the rule provides one motion to recommit with or 
without instructions.

           PART A--SUMMARY OF AMENDMENT CONSIDERED AS ADOPTED

    Makes permanent the Economic Growth and Tax Relief 
Reconciliation Act of 2001 increase in the phase out of the 
earned income credit for joint filers, in addition to making 
permanent the increased standard deduction and the broader 15% 
bracket for joint filers. Under current law, the phase out 
range for joint filers will increase by $2,000 in 2005, 2006 
and 2007 and to $3,000 for tax years after 2007. The earned 
income credit phase out will sunset under the 2001 act in 2010.

               PART B--SUMMARY OF AMENDMENT MADE IN ORDER

    (Summary derived from information provided by the amendment 
sponsor.)
    Rangel: Amendment in the Nature of a Substitute. Makes 
permanent the marriage penalty provisions related to the 
standard deduction and 15% bracket. Accelerates and makes 
permanent marriage penalty relief for low-income working 
families receiving the benefits of the earned income tax 
credit. Contains provisions to ensure that the minimum tax will 
not deny any of the promised benefits. Its cost would be offset 
by eliminating some of the recent tax cuts enjoyed by families 
with incomes over $1 million.

            PART A--TEXT OF AMENDMENT CONSIDERED AS ADOPTED

  Page 4, strike lines 11 through 14 (section 3 of the bill) 
and insert the following:

SEC. 3. REPEAL OF SUNSET.

  Title IX of the Economic Growth and Tax Relief Reconciliation 
Act of 2001 shall not apply to the amendments made by title III 
of such Act.
                              ----------                              


                PART B--TEXT OF AMENDMENT MADE IN ORDER

  Strike all after the enacting clause and insert the 
following:

SECTION 1. EXTENSION OF INCREASED STANDARD DEDUCTION FOR MARRIED 
                    TAXPAYERS FILING JOINT RETURNS.

  (a) In General.--Paragraph (2) of section 63(c) of the 
Internal Revenue Code of 1986 (relating to basic standard 
deduction) is amended to read as follows:
          ``(2) Basic standard deduction.--For purposes of 
        paragraph (1), the basic standard deduction is--
                  ``(A) 200 percent of the dollar amount in 
                effect under subparagraph (C) for the taxable 
                year in the case of--
                          ``(i) a joint return, or
                          ``(ii) a surviving spouse (as defined 
                        in section 2(a)),
                  ``(B) $4,400 in the case of a head of 
                household (as defined in section 2(b)), or
                  ``(C) $3,000 in any other case.''.
  (b) Conforming Amendments.--
          (1) Section 63(c)(4) of such Code is amended by 
        striking ``(2)(D)'' each place it occurs and inserting 
        ``(2)(C)''.
          (2) Section 63(c) of such Code is amended by striking 
        paragraph (7).
  (c) Effective Date.--The amendments made by this section 
shall apply to taxable years beginning after December 31, 2004.

SEC. 2. EXTENSION OF INCREASED EARNED INCOME CREDIT FOR MARRIED 
                    TAXPAYERS FILING JOINT RETURNS.

  (a) In General.--Subparagraph (B) of section 32(b)(2) of the 
Internal Revenue Code of 1986 is amended to read as follows:
                  ``(B) Joint returns.--In the case of a joint 
                return filed by an eligible individual and such 
                individual's spouse, the phaseout amount 
                determined under subparagraph (A) shall be 
                increased by $3,000.''
  (b) Effective Date.--The amendment made by this section shall 
apply to taxable years beginning after December 31, 2004.

SEC. 3. EXTENSION OF 15-PERCENT INDIVIDUAL INCOME TAX RATE BRACKET 
                    EXPANSION FOR MARRIED TAXPAYERS FILING JOINT 
                    RETURNS.

  (a) In General.--Paragraph (8) of section 1(f ) of the 
Internal Revenue Code of 1986 (relating to phaseout of marriage 
penalty in 15-percent bracket) is amended to read as follows:
          ``(8) Elimination of marriage penalty in 15-percent 
        bracket.--With respect to taxable years beginning after 
        December 31, 2004, in prescribing the tables under 
        paragraph (1)--
                  ``(A) the maximum taxable income in the 15-
                percent rate bracket in the table contained in 
                subsection (a) (and the minimum taxable income 
                in the next higher taxable income bracket in 
                such table) shall be 200 percent of the maximum 
                taxable income in the 15-percent rate bracket 
                in the table contained in subsection (c) (after 
                any other adjustment under this subsection), 
                and
                  ``(B) the comparable taxable income amounts 
                in the table contained in subsection (d) shall 
                be \1/2\ of the amounts determined under 
                subparagraph (A).''.
  (b) Conforming Amendment.--The heading for subsection (f ) of 
section 1 of such Code is amended by striking ``Phaseout'' and 
inserting ``Elimination''.
  (c) Effective Date.--The amendments made by this section 
shall apply to taxable years beginning after December 31, 2004.

SEC. 4. BENEFITS EXTENSION NOT TO INCREASE FEDERAL BUDGET DEFICIT.

  (a) In General.--Section 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new 
subsection:
  ``(j) Additional Tax on High Income Taxpayers.--The amount 
determined under subsection (a), (b), (c), or (d), as the case 
may be, shall be increased by 3.6 percent of so much of 
adjusted gross income as exceeds $1,000,000 in the case of 
individuals to whom subsection (a) applies ($500,000 in any 
other case).''
  (b) Effective Date.--The amendment made by this section shall 
apply to taxable years beginning after December 31, 2004.

SEC. 5. REPEAL OF SUNSET APPLICABLE TO BENEFITS EXTENDED BY THIS ACT.

  Title IX of the Economic Growth and Tax Relief Reconciliation 
Act of 2001 shall not apply to the amendments made by sections 
301, 302, and 303 of such Act.

SEC. 6. BENEFITS OF ACT NOT DENIED BY REASON OF ALTERNATIVE MINIMUM 
                    TAX.

  (a) Minimum Tax.--The amount of the minimum tax imposed by 
section 55 of the Internal Revenue Code of 1986 shall be 
determined as if sections 1, 3, and 5 of this Act had not been 
enacted.
  (b) Credits.--In applying section 26(a)(1) of such Code, the 
amount referred to in subparagraph (B) thereof shall be reduced 
(but not below zero) by the amount of the reduction in the 
taxpayer's regular tax liability by reason of sections 1, 3, 
and 5 of this Act.

      Amend the title so as to read: ``A bill to amend the 
Internal Revenue Code of 1986 to permanently extend all 
marriage penalty relief including such relief in the earned 
income credit, to ensure that the alternative minimum tax does 
not deny those benefits, and to provide those benefits without 
increasing the Federal budget deficit by reducing the benefits 
of recent income tax rate reductions for individuals having 
incomes of more than $1,000,000.''

                                
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