< Back to H.R. 456 (107th Congress, 2001–2002)

Text of the Tax Relief and Marriage Penalty Elimination Act of 2001

This bill was introduced on February 6, 2001, in a previous session of Congress, but was not enacted. The text of the bill below is as of Feb 6, 2001 (Introduced).

Source: GPO

HR 456 IH

107th CONGRESS

1st Session

H. R. 456

To amend the Internal Revenue Code of 1986 to eliminate the marriage penalty in the income tax rates and standard deduction and to reduce individual income tax rates.

IN THE HOUSE OF REPRESENTATIVES

February 6, 2001

Mr. SAM JOHNSON of Texas introduced the following bill; which was referred to the Committee on Ways and Means


A BILL

To amend the Internal Revenue Code of 1986 to eliminate the marriage penalty in the income tax rates and standard deduction and to reduce individual income tax rates.

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

SECTION 1. SHORT TITLE.

    (a) SHORT TITLE- This Act may be cited as the ‘Tax Relief and Marriage Penalty Elimination Act of 2001’.

    (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) SECTION 15 NOT TO APPLY- No amendment made by this Act shall be treated as a change in a rate of tax for purposes of section 15 of the Internal Revenue Code of 1986 .

TITLE I--ELIMINATION OF MARRIAGE PENALTY

SEC. 101. ELIMINATION OF MARRIAGE PENALTY IN INDIVIDUAL INCOME TAX RATES.

    (a) GENERAL RULE- Section 1 (relating to tax imposed) is amended by striking subsections (a) through (e) and inserting the following:

    ‘(a) MARRIED INDIVIDUALS FILING JOINT RETURNS AND SURVIVING SPOUSES- There is hereby imposed on the taxable income of--

      ‘(1) every married individual (as defined in section 7703) who makes a single return jointly with his spouse under section 6013, and

      ‘(2) every surviving spouse (as defined in section 2(a)),

    a tax determined in accordance with the following table:

‘If taxable income is:

The tax is:

Not over $54,100


15% of taxable income.

Over $54,100 but not over $131,100


$8,115, plus 28% of the excess over $54,100.

Over $131,100 but not over $273,500


$29,675, plus 31% of the excess over $131,100.

Over $273,500 but not over $594,700


$73,819, plus 36% of the excess over $273,500.

Over $594,700................


$189,451, plus 39.6% of the excess over $594,700.

    ‘(b) HEADS OF HOUSEHOLDS- There is hereby imposed on the taxable income of every head of a household (as defined in section 2(b)) a tax determined in accordance with the following table:

‘If taxable income is:

The tax is:

Not over $43,280


15% of taxable income.

Over $43,280 but not over $104,880


$6,492, plus 28% of the excess over $43,280.

Over $104,880 but not over $218,800


$23,740, plus 31% of the excess over $104,880.

Over $218,800 but not over $475,760


$59,055.20, plus 36% of the excess over $218,800

Over $475,760


$151,560.80, plus 39.6% of the excess over $475,760

    ‘(c) OTHER INDIVIDUALS- There is hereby imposed on the taxable income of every individual (other than an individual to whom subsection (a) or (b) applies) a tax determined in accordance with the following table:

‘If taxable income is:

The tax is:

Not over $27,050


15% of taxable income.

Over $27,050 but not over $65,550


$4,057.50, plus 28% of the excess over $27,050.

Over $65,550 but not over $136,750


$14,837.50, plus 31% of the excess over $65,550.

Over $136,750 but not over $297,350


$36,909.50, plus 36% of the excess over $136,750.

Over $297,350


$94,725.50, plus 39.6% of the excess over $297,350.

    ‘(d) ESTATES AND TRUSTS- There is hereby imposed on the taxable income of--

      ‘(1) every estate, and

      ‘(2) every trust,

    taxable under this subsection a tax determined in accordance with the following table:

‘If taxable income is:

The tax is:

Not over $1,800


15% of taxable income.

Over $1,800 but not over $4,250


$270, plus 28% of the excess over $1,800.

Over $4,250 but not over $6,500


$956, plus 31% of the excess over $4,250.

Over $6,500 but not over $8,900


$1,653.50, plus 36% of the excess over $6,500.

Over $8,900


$2,517.50, plus 39.6% of the excess over $8,900.’.

    (b) INFLATION ADJUSTMENT TO APPLY IN DETERMINING RATES FOR 2002- Subsection (f) of section 1 is amended--

      (1) by striking ‘1993’ in paragraph (1) and inserting ‘2001’,

      (2) by striking ‘1992’ in paragraph (3)(B) and inserting ‘2000’, and

      (3) by striking paragraph (7).

    (c) CONFORMING AMENDMENTS-

      (1) The following provisions are each amended by striking ‘1992’ and inserting ‘2000’ each place it appears:

        (A) Section 25A(h).

        (B) Section 32(j)(1)(B).

        (C) Section 41(e)(5)(C).

        (D) Section 59(j)(2)(B).

        (E) Section 63(e)(4)(B).

        (F) Section 68(b)(2)(B).

        (G) Section 132(f)(6)(A)(ii).

        (H) Section 135(b)(2)(B)(ii).

        (I) Section 151(d)(4).

        (J) Section 220(g)(2).

        (K) Section 221(g)(1)(B).

        (L) Section 512(d)(2)(B).

        (M) Section 513(h)(2)(C)(ii).

        (N) Section 685(c)(3)(B).

        (O) Section 877(a)(2).

        (P) Section 911(b)(2)(D)(ii)(II).

        (Q) Section 2032A(a)(3)(B).

        (R) Section 2503(b)(2)(B).

        (S) Section 2631(c)(1)(B).

        (T) Section 4001(e)(1)(B).

        (U) Section 4261(e)(4)(A)(ii).

        (V) Section 6039F(d).

        (W) Section 6323(i)(4)(B).

        (X) Section 6334(g)(1)(B).

        (Y) Section 6601(j)(3)(B).

        (Z) Section 7430(c)(1).

      (2) Subclause (II) of section 42(h)(6)(G)(i) is amended by striking ‘1987’ and inserting ‘2000’.

      (3) Sections 468B(b)(1), 511(b)(1), 641(a), 641(d)(2)(A), and 685(d) are each amended by striking ‘section 1(e)’ each place it appears and inserting ‘section 1(d)’.

      (4) Sections 1(f)(2) and 904(b)(3)(E)(ii) are each amended by striking ‘(d), or (e)’ and inserting ‘or (d)’.

      (5) Paragraph (1) of section 1(f) is amended by striking ‘(d), and (e)’ and inserting ‘and (d)’.

    (d) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after December 31, 2000.

SEC. 102. ELIMINATION OF MARRIAGE PENALTY IN STANDARD DEDUCTION.

    (a) IN GENERAL- Paragraph (2) of section 63(c) (relating to standard deduction) is amended to read as follows:

      ‘(2) BASIC STANDARD DEDUCTION- For purposes of paragraph (1), the basic standard deduction is--

        ‘(A) twice 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) $6,650 in the case of a head of household (as defined in section 2(b)), or

        ‘(C) $4,550 in any other case.’

    (b) TECHNICAL AMENDMENTS-

      (1) Paragraph (4) of section 63(c) is amended to read as follows:

      ‘(4) ADJUSTMENTS FOR INFLATION- In the case of any taxable year beginning in a calendar year after 2001, each dollar amount contained in paragraph (2) or (5) or subsection (f) 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.’

      (2) Subparagraph (A) of section 63(c)(5) is amended by striking ‘$500’ and inserting ‘$750’.

      (3) Subsection (f) of section 63 is amended by striking ‘$600’ each place it appears and inserting ‘$900’ and by striking ‘$750’ in paragraph (3) and inserting ‘$1,100’.

      (4) Subparagraph (B) of section 1(f)(6) is amended by striking ‘(other than with’ and all that follows through ‘shall be applied’ and inserting ‘(other than with respect to sections 63(c)(4) and 151(d)(4)(A)) shall be applied’.

      (5) Paragraph (4) of section 63(c) is amended by adding at the end the following flush sentence:

      ‘The preceding sentence shall not apply to the amount referred to in paragraph (2)(A).’.

    (c) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after December 31, 2000.

TITLE II--INDIVIDUAL INCOME TAX RATE REDUCTIONS

SEC. 201. INDIVIDUAL INCOME TAX RATE REDUCTIONS.

    (a) RATES AFTER 2004- Section 1 (relating to tax imposed) is amended by striking subsections (a) through (d) and inserting the following:

    ‘(a) MARRIED INDIVIDUALS FILING JOINT RETURNS AND SURVIVING SPOUSES- There is hereby imposed on the taxable income of--

      ‘(1) every married individual (as defined in section 7703) who makes a single return jointly with his spouse under section 6013, and

      ‘(2) every surviving spouse (as defined in section 2(a)),

    a tax determined in accordance with the following table:

‘If taxable income is:

The tax is:

Not over $12,600


10% of taxable income.

Over $12,600 but not over $54,100


$1,260, plus 15% of the excess over $12,600.

Over $54,100 but not over $273,500


$7,485, plus 25% of the excess over $54,100.

Over $273,500


$62,335, plus 33% of the excess over $273,500.

    ‘(b) HEADS OF HOUSEHOLDS- There is hereby imposed on the taxable income of every head of a household (as defined in section 2(b)) a tax determined in accordance with the following table:

‘If taxable income is:

The tax is:

Not over $10,800


10% of taxable income.

Over $10,800 but not over $43,280


$1,080, plus 15% of the excess over $10,800

Over $43,280 but not over $218,800


$5,952, plus 25% of the excess over $43,280

Over $218,800


$49,832, plus 33% of the excess over $218,800

    ‘(c) OTHER INDIVIDUALS- There is hereby imposed on the taxable income of every individual (other than an individual to whom subsection (a) or (b) applies) a tax determined in accordance with the following table:

‘If taxable income is:

The tax is:

Not over $6,300


10% of taxable income.

Over $6,300 but not over $27,050


$630, plus 15% of the excess over $6,300.

Over $27,050 but not over $136,750


$3,742.50, plus 25% of the excess over $27,050.

Over $136,750


$31,167.50, plus 33% of the excess over $136,750.

    ‘(d) ESTATES AND TRUSTS- There is hereby imposed on the taxable income of--

      ‘(1) every estate, and

      ‘(2) every trust,

    taxable under this subsection a tax determined in accordance with the following table:

‘If taxable income is:

The tax is:

Not over $1,800


15% of taxable income.

Over $1,800 but not over $6,500


$270, plus 25% of the excess over $1,800.

Over $6,500


$1,445, plus 33% of the excess over $6,500.’

    (b) PHASEIN OF RATES- Section 1 is amended by inserting after subsection (d) the following new subsection:

    ‘(e) Phasein of 2005 Rates-

      ‘(1) IN GENERAL- In the case of any taxable year beginning after December 31, 2000, and before January 1, 2005, the tax determined under subsection (a), (b), or (c) shall be the tax imposed by such subsection determined without regard to the amendments made by the Tax Relief and Marriage Penalty Elimination Act of 2001 reduced by--

        ‘(A) 40 percent of the aggregate tax reduction in the case of taxable years beginning during 2001 or 2002,

        ‘(B) 60 percent of the aggregate tax reduction in the case of taxable years beginning during 2003, and

        ‘(C) 80 percent of the aggregate tax reduction in the case of taxable years beginning during 2004.

      The Secretary shall adjust the tables prescribed under subsection (f) to carry out the reductions under the preceding sentence.

      ‘(2) AGGREGATE TAX REDUCTION- For purposes of paragraph (1), the aggregate tax reduction for any taxable year shall be the amount equal to the excess of--

        ‘(A) the tax which would be determined for such taxable year without regard to the Tax Relief and Marriage Penalty Elimination Act of 2001, over

        ‘(B) the tax which would be determined for such taxable year without regard to this subsection.’

    (c) TECHNICAL AMENDMENTS-

      (1) Section 1(g)(7)(B)(ii)(II) is amended by striking ‘15 percent’ and inserting ‘10 percent’.

      (2) Section 1(h) is amended--

        (A) by striking ‘28 percent’ both places it appears in paragraphs (1)(A)(ii)(I) and (1)(B)(i) and inserting ‘15 percent’, and

        (B) by striking paragraph (13).

      (3) Section 531 is amended by striking ‘39.6 percent’ and inserting ‘33 percent’.

      (4) Section 541 is amended by striking ‘39.6 percent’ and inserting ‘33 percent’.

      (5) Section 3402(p)(1)(B) is amended by striking ‘7, 15, 28, or 31 percent’ and inserting ‘5, 10, 15, or 25 percent’.

      (6) Section 3402(p)(2) is amended by striking ‘15 percent’ and inserting ‘10 percent’.

      (7) Section 3402(q)(1) is amended by striking ‘28 percent’ and inserting ‘15 percent’.

      (8) Section 3402(r)(3) is amended by striking ‘31 percent’ and inserting ‘25 percent’.

      (9) Section 3406(a)(1) is amended by striking ‘31 percent’ and inserting ‘25 percent’.

      (10) The Secretary of the Treasury may prescribe percentages which shall apply in lieu of the percentages specified in the amendments made by this subsection in order to coordinate those percentages with the percentages specified in the tables prescribed under the last sentence of section 1(e)(1) of the Internal Revenue Code of 1986, as added by this section.

    (d) 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, 2000.

      (2) AMENDMENTS TO WITHHOLDING PROVISIONS- The amendments made by paragraphs (5), (6), (7), (8), and (9) of subsection (c) shall apply to amounts paid after the date of the enactment of this Act.