< Back to H.R. 6 (107th Congress, 2001–2002)

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

This bill was introduced in a previous session of Congress and was passed by the House on March 29, 2001 but was never passed by the Senate. The text of the bill below is as of Jun 7, 2001 (Placed on Calendar in the Senate).

Source: GPO

HR 6 PCS

Calendar No. 68

107th CONGRESS

1st Session

H. R. 6

IN THE SENATE OF THE UNITED STATES

March 29, 2001

Received

June 6, 2001

Read the first time

June 7, 2001

Read the second time and placed on the calendar


AN ACT

To amend the Internal Revenue Code of 1986 to reduce the marriage penalty by providing for adjustments to the standard deduction, the 15-percent rate bracket, and the earned income credit, to increase the child credit, and for other purposes.

    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 ‘Marriage Penalty and Family Tax Relief Act of 2001’.

    (b) 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.

SEC. 2. ELIMINATION OF MARRIAGE PENALTY IN STANDARD DEDUCTION.

    (a) IN GENERAL- Paragraph (2) of section 63(c) of the Internal Revenue Code of 1986 (relating to standard deduction) is amended--

      (1) by striking ‘$5,000’ in subparagraph (A) and inserting ‘200 percent of the dollar amount in effect under subparagraph (C) for the taxable year’;

      (2) by adding ‘or’ at the end of subparagraph (B);

      (3) by striking ‘in the case of’ and all that follows in subparagraph (C) and inserting ‘in any other case.’; and

      (4) by striking subparagraph (D).

    (b) TECHNICAL AMENDMENTS-

      (1) Subparagraph (B) of section 1(f)(6) of such Code 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’.

      (2) Paragraph (4) of section 63(c) of such Code 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, 2001.

SEC. 3. PHASEOUT OF MARRIAGE PENALTY IN 15-PERCENT BRACKET.

    (a) IN GENERAL- Subsection (f) of section 1 of the Internal Revenue Code of 1986 (relating to adjustments in tax tables so that inflation will not result in tax increases) is amended by adding at the end the following new paragraph:

      ‘(8) PHASEOUT OF MARRIAGE PENALTY IN 15-PERCENT BRACKET-

        ‘(A) IN GENERAL- With respect to taxable years beginning after December 31, 2003, in prescribing the tables under paragraph (1)--

          ‘(i) the maximum taxable income in the lowest 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 the applicable percentage of the maximum taxable income in the lowest rate bracket in the table contained in subsection (c) (after any other adjustment under this subsection), and

          ‘(ii) the comparable taxable income amounts in the table contained in subsection (d) shall be 1/2 of the amounts determined under clause (i).

        ‘(B) APPLICABLE PERCENTAGE- For purposes of subparagraph (A), the applicable percentage shall be determined in accordance with the following table:

‘For taxable years beginning

--The applicable

in calendar year--

--percentage is--

          2004

--172

          2005

--178

          2006

--183

          2007

--189

          2008

--195

          2009 and thereafter

--200.

        ‘(C) ROUNDING- If any amount determined under subparagraph (A)(i) is not a multiple of $50, such amount shall be rounded to the next lowest multiple of $50.’.

    (b) REPEAL OF REDUCTION OF REFUNDABLE TAX CREDITS-

      (1) Subsection (d) of section 24 of such Code is amended by striking paragraph (2) and redesignating paragraph (3) as paragraph (2).

      (2) Section 32 of such Code is amended by striking subsection (h).

    (c) INCREASE IN ALTERNATIVE MINIMUM TAX EXEMPTION AMOUNT FOR JOINT RETURNS-

      (1) IN GENERAL- Subsection (d) of section 55 of such Code is amended by adding at the end the following new paragraph:

      ‘(4) ADJUSTMENT OF EXEMPTION AMOUNT FOR JOINT RETURNS-

        ‘(A) IN GENERAL- The dollar amount applicable under paragraph (1)(A) for 2008 and each even-numbered calendar year thereafter--

          ‘(i) shall be $500 greater than the dollar amount applicable under paragraph (1)(A) for the prior even-numbered calendar year, and

          ‘(ii) shall apply to taxable years beginning in such even-numbered calendar year and in the succeeding calendar year.

        In no event shall the dollar amount applicable under paragraph (1)(A) exceed twice the dollar amount applicable under paragraph (1)(B).

        ‘(B) EXEMPTION AMOUNTS FOR 2005, 2006, AND 2007- The dollar amount applicable under paragraph (1)(A) shall be--

          ‘(i) $46,000 for taxable years beginning in 2005, and

          ‘(ii) $46,500 for taxable years beginning in 2006 or 2007.’.

      (2) CONFORMING AMENDMENTS-

        (A) Paragraph (1) of section 55(d) of such Code is amended by striking ‘and’ at the end of subparagraph (B), by striking subparagraph (C), and by inserting after subparagraph (B) the following new subparagraphs:

        ‘(C) 50 percent of the dollar amount applicable under paragraph (1)(A) in the case of a married individual who files a separate return, and

        ‘(D) $22,500 in the case of an estate or trust.’.

        (B) Subparagraph (C) of section 55(d)(3) of such Code is amended by striking ‘paragraph (1)(C)’ and inserting ‘subparagraph (C) or (D) of paragraph (1)’.

        (C) The last sentence of section 55(d)(3) of such Code is amended--

          (i) by striking ‘paragraph (1)(C)(i)’ and inserting ‘paragraph (1)(C)’; and

          (ii) by striking ‘$165,000 or (ii) $22,500’ and inserting ‘the minimum amount of such income (as so determined) for which the exemption amount under paragraph (1)(C) is zero, or (ii) such exemption amount (determined without regard to this paragraph)’.

    (d) TECHNICAL AMENDMENTS-

      (1) Subparagraph (A) of section 1(f)(2) of such Code is amended by inserting ‘except as provided in paragraph (8),’ before ‘by increasing’.

      (2) The heading for subsection (f) of section 1 of such Code is amended by inserting ‘PHASEOUT OF MARRIAGE PENALTY IN 15-PERCENT BRACKET;’ before ‘ADJUSTMENTS’.

    (e) EFFECTIVE DATES-

      (1) IN GENERAL- Except as otherwise provided in this subsection, the amendments made by this section shall apply to taxable years beginning after December 31, 2003.

      (2) SUBSECTION (b)- The amendments made by subsection (b) shall apply to taxable years beginning after December 31, 2001.

      (3) SUBSECTION (c)- The amendments made by subsection (c) shall apply to taxable years beginning after December 31, 2004.

SEC. 4. MARRIAGE PENALTY RELIEF FOR EARNED INCOME CREDIT; EARNED INCOME TO INCLUDE ONLY AMOUNTS INCLUDIBLE IN GROSS INCOME.

    (a) IN GENERAL- Paragraph (2) of section 32(b) of the Internal Revenue Code of 1986 (relating to percentages and amounts) is amended--

      (1) by striking ‘AMOUNTS- The earned’ and inserting ‘AMOUNTS-

        ‘(A) IN GENERAL- Subject to subparagraph (B), the earned’; and

      (2) by adding at the end the following new subparagraph:

        ‘(B) JOINT RETURNS- In the case of a joint return, the earned income amount determined under subparagraph (A) shall be 110 percent of the otherwise applicable amount. If any amount determined under the preceding sentence is not a multiple of $10, such amount shall be rounded to the nearest multiple of $10.’.

    (b) EARNED INCOME TO INCLUDE ONLY AMOUNTS INCLUDIBLE IN GROSS INCOME- Clause (i) of section 32(c)(2)(A) of such Code (defining earned income) is amended by inserting ‘, but only if such amounts are includible in gross income for the taxable year’ after ‘other employee compensation’.

    (c) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after December 31, 2001.

SEC. 5. MODIFICATIONS TO CHILD TAX CREDIT.

    (a) INCREASE IN PER CHILD AMOUNT- Subsection (a) of section 24 of the Internal Revenue Code of 1986 (relating to child tax credit) is amended to read as follows:

    ‘(a) ALLOWANCE OF CREDIT-

      ‘(1) IN GENERAL- There shall be allowed as a credit against the tax imposed by this chapter for the taxable year with respect to each qualifying child of the taxpayer an amount equal to the per child amount.

      ‘(2) PER CHILD AMOUNT- For purposes of paragraph (1), the per child amount shall be determined as follows:

‘In the case of any taxable year beginning in--

The per child amount is--

2001 and 2002

$ 600

2003

700

2004

800

2005

900

2006 or thereafter

1,000.’.

    (b) CREDIT ALLOWED AGAINST ALTERNATIVE MINIMUM TAX-

      (1) IN GENERAL- Subsection (b) of section 24 of such Code is amended by adding at the end the following new paragraph:

      ‘(3) LIMITATION BASED ON AMOUNT OF TAX- The credit allowed under subsection (a) for any taxable year shall not exceed the excess of--

        ‘(A) the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over

        ‘(B) the sum of the credits allowable under this subpart (other than this section) and section 27 for the taxable year.’.

      (2) CONFORMING AMENDMENTS-

        (A) The heading for section 24(b) of such Code is amended to read as follows: ‘LIMITATIONS- ’.

        (B) The heading for section 24(b)(1) of such Code is amended to read as follows: ‘LIMITATION BASED ON ADJUSTED GROSS INCOME- ’.

        (C) Section 24(d) of such Code is amended--

          (i) by striking ‘section 26(a)’ each place it appears and inserting ‘subsection (b)(3)’, and

          (ii) in paragraph (1)(B) by striking ‘aggregate amount of credits allowed by this subpart’ and inserting ‘amount of credit allowed by this section’.

        (D) Paragraph (1) of section 26(a) of such Code is amended by inserting ‘(other than section 24)’ after ‘this subpart’.

        (E) Subsection (c) of section 23 of such Code is amended by striking ‘and section 1400C’ and inserting ‘and sections 24 and 1400C’.

        (F) Subparagraph (C) of section 25(e)(1) of such Code is amended by inserting ‘, 24,’ after ‘sections 23’.

        (G) Section 904(h) of such Code is amended by inserting ‘(other than section 24)’ after ‘chapter’.

        (H) Subsection (d) of section 1400C of such Code is amended by inserting ‘and section 24’ after ‘this section’.

    (c) Additional Credit for Families With 3 or More Children Available to All Families- Subsection (d) of section 24 of such Code is amended--

      (1) in paragraph (1) by striking ‘In the case of a taxpayer with three or more qualifying children for any taxable year, the’ and inserting ‘The’, and

      (2) in the subsection heading by striking ‘WITH 3 OR MORE CHILDREN’ and inserting ‘PAYING SOCIAL SECURITY TAXES’.

    (d) EFFECTIVE DATE-

      (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) SUBSECTION (b)- The amendments made by subsection (b) shall apply to taxable years beginning after December 31, 2001.

SEC. 6. PROTECTION OF SOCIAL SECURITY AND MEDICARE.

    The amounts transferred to any trust fund under the Social Security Act shall be determined as if this Act had not been enacted.

Passed the House of Representatives March 29, 2001.

Attest:

JEFF TRANDAHL,

Clerk.

Calendar No. 68

107th CONGRESS

1st Session

H. R. 6

AN ACT

To amend the Internal Revenue Code of 1986 to reduce the marriage penalty by providing for adjustments to the standard deduction, the 15-percent rate bracket, and the earned income credit, to increase the child credit, and for other purposes.


June 7, 2001

Read the second time and placed on the calendar