[House Report 108-483]
[From the U.S. Government Publishing Office]



108th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     108-483
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PROVIDING FOR CONSIDERATION OF H.R. 4275, TO AMEND THE INTERNAL REVENUE 
CODE OF 1986 TO PERMANENTLY EXTEND THE 10-PERCENT INDIVIDUAL INCOME TAX 
                              RATE BRACKET

                                _______
                                

    May 11, 2004.--Referred to the House Calendar and ordered to be 
                                printed

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   Mr. Sessions, from the Committee on Rules, submitted the following

                              R E P O R T

                       [To accompany H. Res. 637]

    The Committee on Rules, having had under consideration 
House Resolution 637, 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. 4275, 
to amend the Internal Revenue Code of 1986 to permanently 
extend the 10-percent individual income tax rate bracket, 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 for consideration of the amendment in the 
nature of a substitute printed in 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 this report.
    Finally, the rule provides one motion to recommit with or 
without instructions.

                   SUMMARY OF AMENDMENT MADE IN ORDER

    (Summary derived from information provided by the amendment 
sponsor.)
    Rangel: Amendment in the Nature of a Substitute. Includes 
identical provisions to those in the base bill. Adjusts the AMT 
so that none of the benefits promised in the bill will be taken 
back by the AMT. Includes a temporary rate adjustment (through 
2010) that applies to incomes over $1 million ($500,000 for 
single taxpayers). The rate adjustment would be 1.9% for 
incomes over that level. Conditions the repeal of the sunset on 
Congress meeting certain budgetary goals. Congress would be 
required to enact budget legislation that balances the budget 
by FY 2014 (without using Social Security and Medicare trust 
funds) and eliminates the need to borrow from foreign central 
banks to fund our government.

                    TEXT OF AMENDMENT MADE IN ORDER

  Strike all after the enacting clause and insert the 
following:

SECTION 1. EXTENSION OF 10-PERCENT INDIVIDUAL INCOME TAX RATE BRACKET.

  (a) In General.--Clause (i) of section 1(i)(1)(B) of the 
Internal Revenue Code of 1986 (relating to the initial bracket 
amount) is amended to read as follows:
                          ``(i) $14,000 in the case of 
                        subsection (a),''.
  (b) Inflation Adjustment Beginning in 2004.--Section 
1(i)(1)(C) of such Code (relating to inflation adjustment) is 
amended to read as follows:
                  ``(C) Inflation adjustment.--In prescribing 
                the tables under subsection (f) which apply 
                with respect to taxable years beginning in 
                calendar years after 2003--
                          ``(i) the cost-of-living adjustment 
                        used in making adjustments to the 
                        initial bracket amount shall be 
                        determined under subsection (f)(3) by 
                        substituting `2002' for `1992' in 
                        subparagraph (B) thereof, and
                          ``(ii) such adjustment shall not 
                        apply to the amount referred to in 
                        subparagraph (B)(iii).
                If any amount after adjustment under the 
                preceding sentence is not a multiple of $50, 
                such amount shall be rounded to the next lowest 
                multiple of $50.''.
  (c) Effective Date.--The amendments made by this section 
shall apply to taxable years beginning after December 31, 2003.
  (d) Repeal of Sunset.--Title IX of the Economic Growth and 
Tax Relief Reconciliation Act of 2001 shall not apply to--
                  (1) paragraph (1) of section 1(i) of the 
                Internal Revenue Code of 1986, and
                  (2) the amendments made by paragraphs (1) and 
                (7) of section 101(c) of such Act.

SEC. 2. 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 section 1 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 section 1 of this 
Act.

SEC. 3. 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.--In the case 
of taxable years beginning in calendar year 2005, 2006, 2007, 
2008, 2009, or 2010, the amount determined under subsection 
(a), (b), (c), or (d), as the case may be, shall be increased 
by 1.9 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. 4. REQUIREMENT THAT CONGRESS BALANCE BUDGET.

  (a) In General.--Notwithstanding the provisions of section 1 
of this Act and any other provision of law, title IX of the 
Economic Growth and Tax Relief Reconciliation Act of 2001 shall 
take effect in the form as originally enacted unless Congress 
meets the requirements of subsection (b).
  (b) Requirements.--Congress meets the requirements of this 
subsection if--
          (1) before September 1, 2010, Congress has enacted 
        comprehensive Federal budget legislation, and
          (2) the Director of the Office of Management and 
        Budget certifies in September of 2010 that such 
        legislation--
                  (A) will result in a balanced Federal budget 
                by fiscal year 2014, determined by taking into 
                account the costs of the foregoing provisions 
                of this Act and without taking into account the 
                receipts and disbursements of the Social 
                Security and Medicare Trust Funds, and
                  (B) will permit the general fund of the 
                Treasury to repay amounts previously borrowed 
                from the Social Security and Medicare Trust 
                Funds without requiring large foreign central 
                bank purchases.

                                
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