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H.R. 5257 (109th): Tax Cut for the Rest of Us Act of 2006

The text of the bill below is as of May 2, 2006 (Introduced).


HR 5257 IH

109th CONGRESS

2d Session

H. R. 5257

To amend the Internal Revenue Code of 1986 to provide a basic income guarantee in the form of a refundable tax credit for taxpayers who do not itemize deductions.

IN THE HOUSE OF REPRESENTATIVES

May 2, 2006

Mr. FILNER 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 provide a basic income guarantee in the form of a refundable tax credit for taxpayers who do not itemize deductions.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the `Tax Cut for the Rest of Us Act of 2006'.

SEC. 2. BASIC INCOME GUARANTEE FOR TAXPAYERS WHO DO NOT ITEMIZE DEDUCTIONS.

    (a) In General- Subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to refundable credits) is amended by redesignating section 36 as section 37 and inserting after section 35 the following new section:

`SEC. 36. BASIC INCOME GUARANTEE FOR TAXPAYERS WHO DO NOT ITEMIZE DEDUCTIONS.

    `(a) In General- In the case of an individual, there shall be allowed as a credit against the tax imposed by this subtitle for the taxable year an amount equal to the basic income guarantee amount.

    `(b) Basic Guarantee Amount- For purposes of this section, the term `basic guarantee amount' means the sum of--

      `(1) $2,000 for the taxpayer,

      `(2) $2,000 for the spouse of the taxpayer, and

      `(3) $1,000 for each qualified dependent of the taxpayer.

    `(c) Credit Only Allowed to Taxpayers Who Do not Itemize Deductions for Taxable Year- A credit shall be allowed under subsection (a) for a taxable year only if the taxpayer does not claim itemized deductions (as defined by section 63(d)) on his return of tax for the taxable year.

    `(d) Definitions- For purposes of this section, the term `qualified dependent' means a dependent of the taxpayer who has not attained the age of 19 as of the close of the taxable year in which the taxable year of the taxpayer begins.

    `(e) Special Rules- For purposes of this section--

      `(1) BASIC STANDARD DEDUCTION DISALLOWED- If a credit is allowed to the taxpayer under subsection (a) for the taxable year, the basic standard deduction (as defined by section 63(c)(2) for such taxable year is zero.

      `(2) DEDUCTION FOR PERSONAL EXEMPTION AMOUNT DISALLOWED- If a credit is allowed to the taxpayer under subsection (a) for the taxable year, the exemption amount (as determined under section 151) for each exemption of the taxpayer shall be zero.

      `(3) TREATMENT IF DEPENDENT OF ANOTHER TAXPAYER- If a deduction under section 151 with respect to an individual is allowed to another taxpayer for a taxable year beginning in the calendar year in which such individual's taxable year begins, no credit shall be allowed under subsection (a) to such individual for such individual's taxable year.

    `(f) Adjustments for Inflation- In the case of any taxable year beginning after December 31, 2006, each dollar amount in subsection (b) shall be increased by an amount equal to--

      `(2) such dollar amount, multiplied by

      `(3) the cost-of-living adjustment determined under section 1(f)(3) for such calendar year by substituting `calendar year 2005' for `calendar year 1992' in subparagraph (B) thereof.

    If any increase determined under paragraph (2) is not a multiple of $50, such increase shall be rounded to the next lowest multiple of $50.

    `(g) Election not to Take Credit- No credit shall be allowed under subsection (a) for a taxable year if the taxpayer elects not to have this section apply for such taxable year.'.

    (b) Conforming and Clerical Amendments-

      (1) Paragraph (2) of section 1324(b) of title 31, United States Code, is amended by inserting before the period `, or from section 36 of such Code'.

      (2) The table of sections for subpart C of part IV of chapter 1 of the Internal Revenue Code of 1986 is amended by redesignating the item relating to section 36 as an item relating to section 37 and by inserting after the item relating to section 35 the following new item:

      `Sec. 36. Basic income guarantee for taxpayers who do not itemize deductions.'.

    (c) Effective Date- The amendments made by this section shall apply to taxable years beginning after December 31, 2005.