Marriage Tax Penalty Elimination Act of 1998

Summary: Marriage Tax Penalty Elimination Act of 1998 - Amends the Internal Revenue Code to revise standard deduction amounts and individual income tax rate bracket amounts, including providing that amounts for married filing jointly categories shall be twice that of amounts for single filers.

SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.

    (a) Short Title.--This Act may be cited as the ``Marriage Tax 
Penalty Elimination Act of 1998''.
    (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 section 2 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 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 $50,700...............
                                        15% of taxable income.
    Over $50,700 but not over 
        $122,800.
                                        $7,605, plus 28% of the excess 
                                                over $50,700.
    Over $122,800 but not over 
        $256,200.
                                        $27,793, plus 31% of the excess 
                                                over $122,800.
    Over $256,200 but not over 
        $556,900.
                                        $69,147, plus 36% of the excess 
                                                over $256,200.
    Over $556,900..................
                                        $177,399, plus 39.6% of the 
                                                excess over $556,900.
    ``(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 $33,950...............
                                        15% of taxable income.
    Over $33,950 but not over 
        $87,700.
                                        $5,092.50, plus 28% of the 
                                                excess over $33,950.
    Over $87,700 but not over 
        $142,000.
                                        $20,142.50, plus 31% of the 
                                                excess over $87,700.
    Over $142,000 but not over 
        $278,450.
                                        $36,975.50, plus 36% of the 
                                                excess over $142,000.
    Over $278,450..................
                                        $86,097.50, plus 39.6% of the 
                                                excess over $278,450.
    ``(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 $25,350...............
                                        15% of taxable income.
    Over $25,350 but not over 
        $61,400.
                                        $3,802.50, plus 28% of the 
                                                excess over $25,350.
    Over $61,400 but not over 
        $128,100.
                                        $13,896.50, plus 31% of the 
                                                excess over $61,400.
    Over $128,100 but not over 
        $278,450.
                                        $34,573.50, plus 36% of the 
                                                excess over $128,100.
    Over $278,450..................
                                        $88,699.50, plus 39.6% of the 
                                                excess over $278,450.
    ``(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 $1,700................
                                        15% of taxable income.
    Over $1,700 but not over $4,000
                                        $255, plus 28% of the excess 
                                                over $1,700.
    Over $4,000 but not over $6,100
                                        $899, plus 31% of the excess 
                                                over $4,000.
    Over $6,100 but not over $8,350
                                        $1,550, plus 36% of the excess 
                                                over $6,100.
    Over $8,350....................
                                        $2,360, plus 39.6% of the 
                                                excess over $8,350.''.
    (b) Inflation Adjustment To Apply in Determining Rates for 1999.--
Subsection (f) of section 1 is amended--
            (1) by striking ``1993'' in paragraph (1) and inserting 
        ``1998'',
            (2) by striking ``1992'' in paragraph (3)(B) and inserting 
        ``1997'', and
            (3) by striking paragraph (7).
    (c) Conforming Amendments.--
            (1) The following provisions are each amended by striking 
        ``1992'' and inserting ``1997'' each place it appears:
                    (A) Section 25A(h).
                    (B) Section 32(j)(1)(B).
                    (C) Section 41(e)(5)(C).
                    (D) Section 68(b)(2)(B).
                    (E) Section 135(b)(2)(B)(ii).
                    (F) Section 151(d)(4).
                    (G) Section 221(g)(1)(B).
                    (H) Section 512(d)(2)(B).
                    (I) Section 513(h)(2)(C)(ii).
                    (J) Section 877(a)(2).
                    (K) Section 911(b)(2)(D)(ii)(II).
                    (L) Section 4001(e)(1)(B).
                    (M) Section 4261(e)(4)(A)(ii).
                    (N) Section 6039F(d).
                    (O) Section 6334(g)(1)(B).
                    (P) Section 7430(c)(1).
            (2) Subclause (II) of section 42(h)(6)(G)(i) is amended by 
        striking ``1987'' and inserting ``1997''.
            (3) Subparagraph (B) of section 59(j)(2) is amended by 
        striking ``, determined by substituting `1997' for `1992' in 
        subparagraph (B) thereof''.
            (4) Subparagraph (B) of section 132(f)(6) is amended by 
        inserting before the period ``, determined by substituting 
        `calendar year 1992' for `calendar year 1997' in subparagraph 
        (B) thereof''.
            (5) Paragraph (2) of section 220(g) of such Code is amended 
        by striking ``by substituting `calendar year 1997' for 
        `calendar year 1992' in subparagraph (B) thereof''.
            (6) Subparagraph (B) of section 685(c)(3) is amended by 
        striking ``, by substituting `calendar year 1997' for `calendar 
        year 1992' in subparagraph (B) thereof''.
            (7) Subparagraph (B) of section 2032A(a)(3) is amended by 
        striking ``by substituting `calendar year 1997' for `calendar 
        year 1992' in subparagraph (B) thereof''.
            (8) Subparagraph (B) of section 2503(b)(2) is amended by 
        striking ``by substituting `calendar year 1997' for `calendar 
        year 1992' in subparagraph (B) thereof''.
            (9) Paragraph (2) of section 2631(c) is amended by striking 
        ``by substituting `calendar year 1997' for `calendar year 1992' 
        in subparagraph (B) thereof''.
            (10) Subparagraph (B) of section 6601(j)(3) is amended by 
        striking ``by substituting `calendar year 1997' for `calendar 
        year 1992' in subparagraph (B) thereof''.
            (11) 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)''.
            (12) Sections 1(f)(2) and 904(b)(3)(E)(ii) are each amended 
        by striking ``(d), or (e)'' and inserting ``or (d)''.
            (13) 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, 1998.

SEC. 3. 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) $8,500 in the case of--
                            ``(i) a joint return, or
                            ``(ii) a surviving spouse (as defined in 
                        section 2(a)),
                    ``(B) $6,250 in the case of a head of household (as 
                defined in section 2(b)), or
                    ``(C) $4,250 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 1998, 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 ``$700''.
            (3) Subsection (f) of section 63 is amended by striking 
        ``$600'' each place it appears and inserting ``$850'' and by 
        striking ``$750'' in paragraph (3) and inserting ``$1,050''.
            (4) Subparagraph (B) of section 1(f)(6) is amended by 
        striking ``subsection (c)(4) of section 63 (as it applies to 
        subsections (c)(5)(A) and (f) of such section)'' and inserting 
        ``section 63(c)(4)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1998.