Middle Class Tax Relief Act of 1993

Summary: TABLE OF CONTENTS: 
     Title I:  Tax Relief for Middle-Income Taxpayers 
     Title II:  Revenue Provisions 
Middle Class Tax Relief Act of 1993 - 
Title I:  Tax Relief for Middle-Income Taxpayers
 - Amends the Internal Revenue Code to provide an additional exemption amount ($1,000) to the regular personal exemption ($2,000) for middle-income taxpayers.  Specifies the maximum gross income amounts for such taxpayers.  Provides a formula for reducing the additional exemption amount for middle-income taxpayers whose incomes exceed certain transitional dollar amounts.  Provides for inflation adjustments of amounts under this title. 
Title II:  Revenue Provisions
 - Increases the individual income tax rates for certain high-income taxpayers. 
Imposes a surtax on the individual tax rate or the alternative minimum tax rate for individuals whose incomes exceed $225,000. 
Increases the rates of corporate income tax and of alternative minimum tax.

SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.

    (a) Short Title.--This Act may be cited as the ``Middle Class Tax 
Relief Act of 1993''.
    (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.

            TITLE I--TAX RELIEF FOR MIDDLE-INCOME TAXPAYERS

SEC. 101. INCREASE IN PERSONAL EXEMPTION AMOUNT.

    (a) In General.--Paragraph (1) of section 151(d) (defining 
exemption amount) is amended to read as follows:
            ``(1) In general.--Except as otherwise provided in this 
        subsection, the term `exemption amount' means the sum of--
                    ``(A) a regular exemption amount equal to $2,000, 
                and
                    ``(B) an additional exemption amount equal to 
                $1,000, in the case of a middle-income taxpayer.''
    (b) Phaseout of Additional Exemption Amount.--Subsection (d) of 
section 151 is amended by redesignating paragraph (4) as paragraph (5), 
and by inserting after paragraph (3) the following new paragraph:
            ``(4) Special rules relating to middle-income taxpayer 
        additional exemption amount.--
                    ``(A) Definition of middle-income taxpayer.--
                            ``(i) In general.--For purposes of this 
                        subsection, the term `middle-income taxpayer' 
                        means a taxpayer whose adjusted gross income 
                        for the taxable year does not exceed the 
                        applicable maximum dollar amount.
                            ``(ii) Applicable maximum dollar amount.--
                        For purposes of this paragraph, the term 
                        `applicable maximum dollar amount' means--
                                    ``(I) $102,000 in the case of a 
                                joint return or a surviving spouse (as 
                                defined in section 2(a)),
                                    ``(II) $87,300 in the case of a 
                                head of household (as defined in 
                                section 2(b)),
                                    ``(III) $61,000 in the case of an 
                                individual who is not married and is 
                                not a surviving spouse or head of 
                                household, and
                                    ``(IV) $51,000 in the case of a 
                                married individual filing a separate 
                                return.
                    ``(B) Phaseout of additional exemption amount.--
                            ``(i) In general.--In the case of any 
                        middle-income taxpayer whose adjusted gross 
                        income exceeds the applicable transition dollar 
                        amount, the additional exemption amount shall 
                        be reduced by the amount determined under 
                        clause (ii).
                            ``(ii) Amount of reduction.--The amount 
                        determined under this clause with respect to 
                        the additional exemption amount shall be the 
                        amount which bears the same ratio to the 
                        additional exemption amount as--
                                    ``(I) the excess of the taxpayer's 
                                adjusted gross income for the taxable 
                                year over the applicable transition 
                                dollar amount, bears to
                                    ``(II) the excess of the applicable 
                                maximum dollar amount over the 
                                applicable transition dollar amount.
                            ``(iii) Applicable transition dollar 
                        amount.--For purposes of this subparagraph, the 
                        term `applicable transition dollar amount' 
                        means--
                                    ``(I) $47,000 in the case of a 
                                joint return or a surviving spouse (as 
                                defined in section 2(a)),
                                    ``(II) $37,000 in the case of a 
                                head of household (as defined in 
                                section 2(b)),
                                    ``(III) $28,000 in the case of an 
                                individual who is not married and is 
                                not a surviving spouse or head of 
                                household, and
                                    ``(IV) $23,500 in the case of a 
                                married individual filing a separate 
                                return.''
    (c) Inflation Adjustments.--Paragraph (5) of section 151(d) (as so 
redesignated by subsection (b) of this section) is amended by adding at 
the end the following new subparagraph:
                    ``(C) Adjustments relating to additional exemption 
                amount.--In the case of any taxable year beginning in a 
                calendar year after 1994, the dollar amount contained 
                in paragraph (1)(B) and each dollar amount contained in 
                paragraph (4) shall be increased by an amount equal 
                to--
                            ``(i) such dollar amount, multiplied by
                            ``(ii) the cost-of-living adjustment under 
                        section 1(f)(3) for the calendar year in which 
                        the taxable year begins, determined by 
                        substituting `calendar year 1993' for `calendar 
                        year 1989' in subparagraph (B) of such 
                        section.''
    (d) Conforming Amendments.--
            (1) Paragraph (6) of section 1(f) is amended by striking 
        ``section 151(d)(4)'' each place it appears and inserting 
        ``section 151(d)(5)''.
            (2) Paragraph (3) of section 151(d) is amended--
                    (A) in the paragraph caption, by inserting ``of 
                regular exemption amount'' after ``Phaseout'', and
                    (B) in subparagraph (A), by inserting ``regular'' 
                before ``exemption amount''.
            (3) Subparagraph (A) of section 151(d)(5) (as so 
        redesignated by subsection (b) of this section) is amended--
                    (A) in the matter preceding clause (i) by striking 
                ``paragraph (1)'' and inserting ``paragraph (1)(A)'', 
                and
                    (B) by striking ``basic'' in the heading and 
                inserting ``regular''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1993.

                      TITLE II--REVENUE PROVISIONS

SEC. 201. INCREASE IN RATE OF INDIVIDUAL INCOME TAX FOR HIGH-INCOME 
              TAXPAYERS.

    (a) In General.--
            (1) Married individuals filing joint returns and surviving 
        spouses.--Subsection (a) of section 1 (relating to tax imposed 
        on married individuals filing joint returns and surviving 
        spouses) is amended by striking the item beginning ``Over 
        $78,400'' and inserting the following new items:

    ``Over $78,400 but not over 
        $100,000.
                                        $17,733.50, plus 31% of the 
                                                excess over $78,400.
    ``Over $100,000................
                                        $24,429.50, plus 36% of the 
                                                excess over $100,000.''
            (2) Heads of households.--Subsection (b) of section 1 
        (relating to tax imposed on heads of households) is amended by 
        striking the item beginning ``Over $67,200'' and inserting the 
        following new items:

    ``Over $67,200 but not over 
        $85,000.
                                        $15,429.50, plus 31% of the 
                                                excess over $67,200.
    ``Over $85,000.................
                                        $20,947.50, plus 36% of the 
                                                excess over $85,000.''
            (3) Unmarried individuals (other than surviving spouses and 
        heads of households).--Subsection (c) of section 1 (relating to 
        tax imposed on unmarried individuals, other than surviving 
        spouses and heads of households) is amended by striking the 
        item beginning ``Over $47,050'' and inserting the following new 
        items:

    ``Over $47,050 but not over 
        $70,000.
                                        $10,645.50, plus 31% of the 
                                                excess over $47,050.
    ``Over $70,000.................
                                        $17,760, plus 36% of the excess 
                                                over $70,000.''
            (4) Married individuals filing separate returns.--
        Subsection (d) of section 1 (relating to tax imposed on married 
        individuals filing separate returns) is amended by striking the 
        item beginning ``Over $39,200'' and inserting the following new 
        items:

    ``Over $39,200 but not over 
        $50,000.
                                        $8,866.75, plus 31% of the 
                                                excess over $39,200.
    ``Over $50,000.................
                                        $12,214.75, plus 36% of the 
                                                excess over $50,000.''
            (5) Estates and trusts.--Subsection (e) of section 1 
        (relating to tax imposed on estates and trusts) is amended by 
        striking the item beginning ``Over $9,900'' and inserting the 
        following new items:

    ``Over $9,900 but not over 
        $12,600.
                                        $2,343, plus 31% of the excess 
                                                over $9,900.
    ``Over $12,600.................
                                        $3,180, plus 36% of the excess 
                                                over $12,600.''
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1993.

SEC. 202. SURTAX ON INDIVIDUALS WITH INCOMES OVER $225,000.

    (a) General Rule.--Subchapter A of chapter 1 (relating to 
determination of tax liability) is amended by adding at the end the 
following new part:

     ``PART VIII--SURTAX ON INDIVIDUALS WITH INCOMES OVER $225,000

                              ``Sec. 59B. Surtax on section 1 tax.
                              ``Sec. 59C. Surtax on minimum tax.
                              ``Sec. 59D. Special rules.

``SEC. 59B. SURTAX ON SECTION 1 TAX.

    ``In the case of an individual who has taxable income for the 
taxable year in excess of $225,000, the amount of the tax imposed under 
section 1 for such taxable year shall be increased by 15 percent of the 
amount which bears the same ratio to the tax imposed under section 1 
(determined without regard to this section) as--
            ``(1) the amount by which the taxable income of such 
        individual for such taxable year exceeds $225,000, bears to
            ``(2) the total amount of such individual's taxable income 
        for such taxable year.

``SEC. 59C. SURTAX ON MINIMUM TAX.

    ``In the case of an individual who has alternative minimum taxable 
income for the taxable year in excess of $225,000, the amount of the 
tentative minimum tax determined under section 55 for such taxable year 
shall be increased by 2.5 percent of the amount by which the 
alternative minimum taxable income of such taxpayer for the taxable 
year exceeds $225,000.

``SEC. 59D. SPECIAL RULES.

    ``(a) Surtax to Apply to Estates and Trusts.--For purposes of this 
part, the term `individual' includes any estate or trust taxable under 
section 1.
    ``(b) Treatment of Married Individuals Filing Separate Returns.--In 
the case of a married individual (within the meaning of section 7703) 
filing a separate return for the taxable year, sections 59B and 59C 
shall be applied by substituting `$112,500' for `$225,000'.
    ``(c) Coordination With Other Provisions.--The provisions of this 
part shall be applied--
            ``(1) after the application of section 1(h), but
            ``(2) before the application of any other provision of this 
        title which refers to the amount of tax imposed by section 1 or 
        55, as the case may be.''
    (b) Clerical Amendment.--The table of parts for such subchapter A 
is amended by adding at the end the following new item:

                              ``Part VIII. Surtax on individuals with 
                                        incomes over $225,000.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1993.

SEC. 203. INCREASE IN RATE OF CORPORATE INCOME TAX.

    (a) In General.--Subparagraph (C) of section 11(b)(1) (relating to 
amount of tax) is amended by striking ``34 percent'' and inserting ``36 
percent''.
    (b) Conforming Amendment.--Paragraph (2) of section 11(b) (relating 
to ineligibility of personal service corporations for graduated rate) 
is amended by striking ``34 percent'' and inserting ``36 percent''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1993.

SEC. 204. INCREASE IN RATE OF INDIVIDUAL ALTERNATIVE MINIMUM TAX.

    (a) In General.--Subparagraph (A) of section 55(b)(1) (relating to 
tentative minimum tax) is amended by striking ``24 percent'' and 
inserting ``27 percent''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 1993.