To amend the Internal Revenue Code of 1986 to allow individuals to designate that their income, estate, or gift tax payments be spent other than for purposes of supporting the war in Iraq and to provide that amounts so designated shall be used to provide funding for Head Start, to reduce the national debt, and to provide college funding for children of Iraq war veterans.

Summary: Opt Out of Iraq War Act of 2007 - Amends the Internal Revenue Code of 1986 to allow taxpayers to designate that the percentage of their income, estate, or gift tax payments that would otherwise be used to fund the Iraq war be paid into a Future Fund from which funding will be provided, in equal amounts, to the Head Start program, to reduce the national debt, and for a Children of Iraq War Veterans College Fund.

Requires amounts in the College Fund to be used to pay the college costs of students that had a parent in the Armed Forces who served in the Iraq war for at least 180 days, died as the result of service in such war, or was hospitalized and unable to return to duty due to such service.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Opt Out of Iraq War Act of 2007''.

SEC. 2. TAX PAYMENTS TO FUTURE FUND.

    (a) In General.--Subchapter A of chapter 61 of the Internal Revenue 
Code of 1986 (relating to information and returns) is amended by adding 
at the end the following new part:

                     ``PART IX--OPT OUT OF IRAQ WAR

``Sec. 6097. Opt out of Iraq war.

``SEC. 6097. OPT OUT OF IRAQ WAR.

    ``(a) Designation of Tax Payments to Future Fund.--Every individual 
may designate that the following amounts be paid into the Future Fund 
established by section 9511.
            ``(1) Income tax.--Such individual's income tax payment for 
        a taxable year.
            ``(2) Gift tax.--Such individual's payment of the tax 
        imposed by section 2501.
            ``(3) Estate tax.--The payment of the tax imposed by 
        section 2001 on the estate of such individual.
    ``(b) Limitation.--
            ``(1) In general.--The amount of any payment which may be 
        designated under this section shall not exceed the Iraq war 
        funding percentage of such payment.
            ``(2) Iraq war funding percentage.--
                    ``(A) In general.--For purposes of this subsection, 
                the Iraq war funding percentage, with respect to any 
                payment made during a fiscal year, is the percentage 
                (determined by the Comptroller of the United States) of 
                the Federal budget which was spent during the preceding 
                fiscal year on the war in Iraq.
                    ``(B) Certain spending not taken into account.--For 
                purposes of subparagraph (A), the amount determined to 
                be spent on the war in Iraq during the preceding year 
                shall be reduced by the amount which the Comptroller of 
                the United States estimates will be spent during the 
                fiscal year for which the percentage is being 
                determined--
                            ``(i) to provide Iraq with humanitarian and 
                        other non-military assistance, and
                            ``(ii) to provide for the withdrawal of 
                        United States infrastructure and personnel from 
                        Iraq.
                    ``(C) Exclusion of certain trust funds from 
                budget.--For purposes of this paragraph, none of the 
                trust funds established under the Social Security Act 
                or this title shall be treated as included in the 
                Federal budget.
    ``(c) Special Rules Relating to Income Tax Payments.--For purposes 
of this section--
            ``(1) Income tax payment.--The term `income tax payment' 
        means the amount of tax imposed by chapter 1 and paid by or 
        withheld for any taxable year to the extent not in excess of 
        the taxpayer's income tax liability.
            ``(2) Income tax liability.--The term `income tax 
        liability' means the amount of the tax imposed by chapter 1 on 
        a taxpayer for any taxable year (as shown on such taxpayer's 
        tax return) reduced by the sum of--
                    ``(A) the credits (as shown in such return) 
                allowable under part IV of subchapter A of chapter 1 
                (other than subpart C thereof), and
                    ``(B) the amount designated under section 6096.
            ``(3) Joint returns.--A designation may be made on a joint 
        return only if both spouses make the designation.
    ``(d) Designation of Estate Tax Payments.--The designation under 
subsection (a)(3) may be made by the executor of the estate under 
written authority of the decedent.
    ``(e) Manner and Time of Designations.--A designation under 
subsection (a) may be made--
            ``(1) at the time of filing the return of the tax to which 
        the designation relates, or
            ``(2) at any other time (after the time of filing such 
        return) specified in regulations prescribed by the Secretary.
Such designation shall be made in such manner as the Secretary 
prescribes by regulations except that, if such designation is made at 
the time described in paragraph (1), such designation shall be made on 
the page bearing the filer's signature.
    ``(f) Explanation of Future Fund Purposes.--Each publication of 
general instructions accompanying an income, estate, or gift tax return 
shall include--
            ``(1) an explanation of the purpose of the Future Fund, and
            ``(2) an explanation of the process for making the 
        designations under this section.
    ``(g) Termination.--This section shall not apply to payments made 
during any period that fewer than 25,000 members of the Armed Forces of 
the United States are serving in Iraq.''.
    (b) Clerical Amendment.--The table of parts for such subchapter A 
is amended by adding at the end the following new item:

                   ``Part IX. Opt Out of Iraq War.''.

SEC. 3. FUTURE FUND.

    (a) Creation of Trust Fund.--Subchapter A of chapter 98 of the 
Internal Revenue Code of 1986 (relating to trust fund code) is amended 
by adding at the end the following new section:

``SEC. 9511. FUTURE FUND.

    ``(a) Creation of Trust Fund.--There is established in the Treasury 
of the United States a trust fund to be known as the `Future Fund', 
consisting of such amounts as may be appropriated or credited into such 
Fund as provided in this section and section 9602(b).
    ``(b) Transfers to Future Fund of Amounts Equivalent to Certain 
Taxes.--There are hereby appropriated to the Future Fund amounts 
equivalent to the sum of the amounts designated under section 6097 for 
payment into the Fund.
    ``(c) Expenditures From Future Fund.--Amounts in the Future Fund 
shall be available as follows:
            ``(1) Head start.--One-third of such amounts shall be 
        available, as provided in appropriation Acts, to carry out the 
        Head Start Act (42 U.S.C. 9831).
            ``(2) Reduction of national debt.--One-third of such 
        amounts shall be available for reducing the national debt in 
        accordance with subsection (d).
            ``(3) Children of iraq war veterans college fund.--One-
        third of such amounts shall be transferred to the Children of 
        Iraq War Veterans College Fund in accordance with subsection 
        (e).
    ``(d) Reduction of National Debt.--The Secretary of the Treasury 
shall, from time to time, transfer to the special account established 
by section 3113(d) of title 31, United States Code, the amounts 
described in subsection (c)(2).
    ``(e) Children of Iraq War Veterans College Fund.--
            ``(1) Creation of college fund.--There is established in 
        the Future Fund a separate account to be known as the `Children 
        of Iraq War Veterans College Fund', consisting of amounts 
        transferred or credited to the Children of Iraq War Veterans 
        College Fund as provided in this section and section 9602(b).
            ``(2) Expenditures from college fund.--Amounts in the 
        Children of Iraq War Veterans College Fund shall be available, 
        as provided in appropriation Acts, to pay the qualified tuition 
        and related expenses (as defined in section 117(b)(2)) of any 
        individual if either parent of such individual served as a 
        member of the Armed Forces of the United States in Iraq during 
        any portion of the period that Iraq is designated as a combat 
        zone for purposes of section 112 and--
                    ``(A) such portion is at least 180 days,
                    ``(B) such parent died as a result of wounds, 
                disease, or injury incurred while so serving, or
                    ``(C) as a result of wounds, disease, or injury 
                incurred while so serving, such parent was hospitalized 
                and unable to return to duty in such zone.''.
    (b) Clerical Amendment.--The table of sections for such subchapter 
A is amended by adding at the end the following new item:

``Sec. 9511. Future Fund.''.