I 

118TH CONGRESS 

2D SESSION H. R. 9873 

To amend the Fair Labor Standards Act of 1938 and the Internal Revenue 

Code of 1986 to make certain modifications in relation to the minimum 

wage. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 27, 2024 

Ms. LEE of Pennsylvania (for herself, Ms. LEE of California, Mr. JACKSON

of Illinois, Ms. TLAIB, Ms. BUSH, Ms. SCHAKOWSKY, Ms. MCCOLLUM, 

Mrs. RAMIREZ, and Mr. HUFFMAN) introduced the following bill; which 

was referred to the Committee on Education and the Workforce, and in 

addition to the Committees on Ways and Means, and Oversight and Accountability, for a period to be subsequently determined by the Speaker, 

in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend the Fair Labor Standards Act of 1938 and the 

Internal Revenue Code of 1986 to make certain modifications in relation to the minimum wage. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘American Stability Act’’. 


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1 (b) TABLE OF CONTENTS.—The table of contents for 

2 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—MINIMUM WAGE 

Sec. 101. Minimum wage increases. 

Sec. 102. Tipped employees. 

Sec. 103. Scheduled repeal of separate minimum wage for newly hired employees who are less than 20 years old. 

Sec. 104. Publication of notice. 

Sec. 105. Promoting economic self-sufficiency for individuals with disabilities. 

TITLE II—INCOME TAX MODIFICATIONS 

Sec. 201. Modification of income tax brackets based on annualized stability 

wage. 

Sec. 202. Surcharge on high income individuals, estates, and trusts. 

Sec. 203. Alternative maximum tax for low-income individuals. 

TITLE III—EARNED INCOME DISALLOWANCE 

Sec. 301. Earned income disallowance. 

TITLE IV—EFFECTIVE DATE 

Sec. 401. Effective date. 

3 TITLE I—MINIMUM WAGE 

4 SEC. 101. MINIMUM WAGE INCREASES. 

5 (a) IN GENERAL.—Section 6(a)(1) of the Fair Labor 

6 Standards Act of 1938 (29 U.S.C. 206(a)(1)) is amended 

7 to read as follows: 

8 ‘‘(1) except as otherwise provided in this sec9 tion, not less than— 

10 ‘‘(A) $15.00 an hour for the first calendar 

11 year beginning after the date of enactment of 

12 the American Stability Act; 

13 ‘‘(B) for each calendar year during the in14 terval period (as defined in subsection (g)), a 


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1 minimum wage equal to the amount determined 

2 under this paragraph for the preceding year, in3 creased by the lesser of— 

4 ‘‘(i) 10 percent; or 

5 ‘‘(ii) the amount necessary for the 

6 minimum wage to equal the stability wage 

7 for such calendar year; and 

8 ‘‘(C) for each calendar year that begins 

9 after the interval period, the stability wage for 

10 such calendar year.’’. 

11 (b) STABILITY WAGE.—Section 6 of such Act (29 

12 U.S.C. 206) is further amended by adding at the end the 

13 following: 

14 ‘‘(h) STABILITY WAGE.— 

15 ‘‘(1) IN GENERAL.— 

16 ‘‘(A) DETERMINATION.—The stability 

17 wage determined under this paragraph for a 

18 calendar year shall be an amount equal to the 

19 greater of— 

20 ‘‘(i) the average hourly earnings wage 

21 determined under paragraph (2) for that 

22 calendar year; 

23 ‘‘(ii) the cost-of-living wage deter24 mined under paragraph (3) for that cal25 endar year; or 


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1 ‘‘(iii) the stability wage in effect for 

2 the preceding year. 

3 ‘‘(B) ROUNDING.—If the amount deter4 mined under subparagraph (A) is not a multiple 

5 of 5 cents, such amount shall be rounded to the 

6 next higher multiple of 5 cents. 

7 ‘‘(2) AVERAGE HOURLY EARNINGS WAGE.—The 

8 average hourly earnings wage for any calendar year 

9 shall be an amount equal to $20.00, multiplied by 

10 the ratio of— 

11 ‘‘(A) the average hourly earnings for the 

12 year preceding such calendar year, to 

13 ‘‘(B) the average hourly earnings for the 

14 year preceding the calendar year of the date of 

15 enactment of the American Stability Act. 

16 ‘‘(3) COST-OF-LIVING WAGE.—The cost-of-living 

17 wage for any calendar year shall be an amount equal 

18 to $20.00, multiplied by the ratio of— 

19 ‘‘(A) the CPI–U for the year preceding 

20 such calendar year, to 

21 ‘‘(B) the CPI–U for the year preceding the 

22 calendar year of the date of enactment of the 

23 American Stability Act. 

24 ‘‘(4) DEFINITIONS.—For the purposes of this 

25 paragraph and subsection (a)(1): 


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1 ‘‘(A) CPI–U.—The term ‘CPI–U’ means, 

2 when used with respect to a calendar year, the 

3 Consumer Price Index for all urban consumers, 

4 as published by the Bureau of Labor Statistics, 

5 for September of such year. 

6 ‘‘(B) AVERAGE HOURLY EARNINGS.—The 

7 term ‘average hourly earnings’ means, when 

8 used with respect to a calendar year, the total 

9 private average hourly earnings from the data 

10 on average hourly and weekly earnings of pro11 duction and nonsupervisory employees on pri12 vate nonfarm payrolls by industry sector, sea13 sonally adjusted, as published by the Bureau of 

14 Labor Statistics, for September of such year. 

15 ‘‘(C) INTERVAL PERIOD.—The term ‘inter16 val period’ means the period— 

17 ‘‘(i) beginning on the first day of the 

18 1st calendar year beginning after the date 

19 of enactment of the American Stability 

20 Act; and 

21 ‘‘(ii) ending at the close of the last 

22 day of the first calendar year for which the 

23 minimum wage under subsection (a)(1) 

24 equals the stability wage determined under 


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1 paragraph (1) of this subsection for such 

2 calendar year.’’. 

3 SEC. 102. TIPPED EMPLOYEES. 

4 (a) BASE MINIMUM WAGE FOR TIPPED EMPLOYEES

5 AND TIPS RETAINED BY EMPLOYEES.— 

6 (1) IN GENERAL.—Section 3(m)(2)(A) of the 

7 Fair Labor Standards Act of 1938 (29 U.S.C. 

8 203(m)(2)(A)) shall be amended to read as follows: 

9 ‘‘(A) The wage required to be paid to a tipped 

10 employee shall be the wage set forth in section 

11 6(a)(1). Any employee shall have the right to retain 

12 any tips received by such employee, except that this 

13 subsection shall not be construed to prohibit the 

14 pooling of tips among employees who customarily 

15 and regularly receive tips. An employer shall inform 

16 each employee of the right and exception provided 

17 under the preceding sentence.’’. 

18 (2) EFFECTIVE DATE.—The amendment made 

19 by subsection (a) shall take effect on January 1 of 

20 the first calendar year that begins after the date of 

21 enactment of this Act. 

22 (b) PENALTIES.—Section 16 of the Fair Labor 

23 Standards Act of 1938 (29 U.S.C. 216) is amended— 

24 (1) in the third sentence of subsection (b), by 

25 inserting ‘‘or used’’ after ‘‘kept’’; and 


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1 (2) in the second sentence of subsection (e)(2), 

2 by inserting ‘‘or used’’ after ‘‘kept’’. 

3 SEC. 103. SCHEDULED REPEAL OF SEPARATE MINIMUM 

4 WAGE FOR NEWLY HIRED EMPLOYEES WHO 

5 ARE LESS THAN 20 YEARS OLD. 

6 (a) IN GENERAL.—Section 6(g) of the Fair Labor 

7 Standards Act of 1938 (29 U.S.C. 206(g)), as amended 

8 by subsection (a), shall be repealed. 

9 (b) EFFECTIVE DATE.—The repeal made by sub10 section (a) shall take effect on January 1 of the first cal11 endar year that begins after the date of enactment of this 

12 Act. 

13 SEC. 104. PUBLICATION OF NOTICE; TECHNICAL ASSIST14 ANCE. 

15 Section 6 of the Fair Labor Standards Act of 1938 

16 (29 U.S.C. 206), as amended by section 2(b), is further 

17 amended by adding at the end the following: 

18 ‘‘(i) PUBLICATION OF WAGE RATES.—Not later than 

19 60 days prior to the effective date of any increase in the 

20 required wage determined under subsection (a)(1), the 

21 Secretary shall publish in the Federal Register and on the 

22 website of the Department of Labor a notice announcing 

23 each increase in such required wage. 

24 ‘‘(j) TRANSITION ASSISTANCE.—Upon request, the 

25 Secretary shall provide— 


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1 ‘‘(1) technical assistance and information to 

2 employers for the purposes of— 

3 ‘‘(A) assisting such employers to comply 

4 with subsection (a), as amended by the Amer5 ican Stability Act; and 

6 ‘‘(B) ensuring continuing employment op7 portunities for individuals with disabilities who 

8 received a special minimum wage rate under 

9 this section 14(c) (as in effect on the day before 

10 the date of enactment of the American Stability 

11 Act); and 

12 ‘‘(2) information to individuals who were em13 ployed at a special minimum wage rate under section 

14 14(c) (as in effect on the day before the date of en15 actment of the American Stability Act), which may 

16 include referrals to Federal or State entities with ex17 pertise in competitive integrated employment.’’. 

18 SEC. 105. PROMOTING ECONOMIC SELF-SUFFICIENCY FOR 

19 INDIVIDUALS WITH DISABILITIES. 

20 (a) TRANSITION TO FAIR WAGES FOR INDIVIDUALS

21 WITH DISABILITIES.— 

22 (1) IN GENERAL.—Subparagraph (A) of section 

23 14(c)(1) of the Fair Labor Standards Act of 1938 

24 (29 U.S.C. 214(c)(1)) shall be amended to read as 

25 follows: 


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1 ‘‘(A) at a rate that equals or exceeds, for each 

2 year, the wage set forth in section 6(a)(1).’’. 

3 (2) EFFECTIVE DATE.—The amendment made 

4 by paragraph (A) shall take effect on January 1 of 

5 the first calendar year that begins after the date of 

6 enactment of this Act. 

7 (b) PROHIBITION ON NEW SPECIAL CERTIFI8 CATES.— 

9 (1) IN GENERAL.—Section 14(c) of the Fair 

10 Labor Standards Act of 1938 (29 U.S.C. 214(c)) is 

11 amended by adding at the end the following: 

12 ‘‘(6) PROHIBITION ON NEW SPECIAL CERTIFI13 CATES.—Notwithstanding paragraph (1), the Secretary 

14 shall not issue a special certificate under this subsection 

15 to an employer that was not issued a special certificate 

16 under this subsection before the date of enactment of the 

17 American Stability Act.’’. 

18 (2) SUNSET.—Section 14(c) of the Fair Labor 

19 Standards Act of 1938 (29 U.S.C. 214(c)), as 

20 amended by paragraph (2), is further amended by 

21 adding at the end the following: 

22 ‘‘(7) SUNSET.—On January 1 of the first calendar 

23 year that begins after the date of enactment of the Amer24 ican Stability Act, the authority to issue special certifi25 cates under paragraph (1) shall expire, and no special cerVerDate Sep 11 2014 20:19 Oct 21, 2024 Jkt 059200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H9873.IH H9873

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1 tificates issued under paragraph (1) shall have any legal 

2 effect .’’. 

3 (3) EFFECTIVE DATE.—The amendments made 

4 by this paragraph shall take effect on the date of en5 actment of this Act. 

6 TITLE I—INCOME TAX 

7 MODIFICATIONS 

8 SEC. 1. MODIFICATION OF INCOME TAX BRACKETS BASED 

9 ON ANNUALIZED STABILITY WAGE. 

10 (a) IN GENERAL.—Section 1 of the Internal Revenue 

11 Code of 1986 is amended by striking subsections (a), (b), 

12 (c), (d), and (e) and inserting the following new sub13 sections: 

14 ‘‘(a) IN GENERAL.—There is hereby imposed on the 

15 taxable income of every individual, every estate, and every 

16 trust a tax determined under this section. 

17 ‘‘(b) AMOUNT OF TAX.—The tax determined under 

18 this section shall be equal to— 

19 ‘‘(1) in the case of any taxpayer whose taxable 

20 income does not exceed the maximum bracket 

21 amount for the lowest tax bracket for the taxpayer’s 

22 filing status, the product of the percentage which 

23 constitutes such lowest tax bracket multiplied by 

24 such taxable income, and 


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1 ‘‘(2) in the case of any taxpayer whose taxable 

2 income exceeds the maximum bracket amount for 

3 such lowest tax bracket, the sum of— 

4 ‘‘(A) the maximum tax amount for each 

5 tax bracket for the taxpayer’s filing status with 

6 respect to which the taxpayer’s taxable income 

7 exceeds the maximum bracket amount for such 

8 tax bracket, plus 

9 ‘‘(B) the product of— 

10 ‘‘(i) the percentage which constitutes 

11 the tax bracket for the taxpayer’s filing 

12 status which is next above the highest 

13 bracket amount for which an amount is in14 cluded under subparagraph (A), multiplied 

15 by 

16 ‘‘(ii) so much of the taxable income of 

17 the taxpayer as exceeds the maximum 

18 bracket amount of such highest tax brack19 et. 

20 ‘‘(c) DETERMINATION OF MAXIMUM BRACKET

21 AMOUNTS.— 

22 ‘‘(1) MARRIED INDIVIDUALS FILING JOINT RE23 TURNS AND SURVIVING SPOUSES.—In the case of 

24 every married individual (as defined in section 7703) 

25 who makes a single return jointly with the individVerDate Sep 11 2014 20:19 Oct 21, 2024 Jkt 059200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H9873.IH H9873

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1 ual’s spouse under section 6013, and every surviving 

2 spouse— 

3 ‘‘(A) the maximum bracket amount for the 

4 10 percent bracket is the product of 0.56 multi5 plied by the annualized stability wage for the 

6 taxable year, 

7 ‘‘(B) the maximum bracket amount for the 

8 12 percent bracket is the product of 2.28 multi9 plied by the annualized stability wage for the 

10 taxable year, 

11 ‘‘(C) the maximum bracket amount for the 

12 22 percent bracket is the product of 4.8 multi13 plied by the annualized stability wage for the 

14 taxable year, 

15 ‘‘(D) the maximum bracket amount for the 

16 24 percent bracket is the product of 9.2 multi17 plied by the annualized stability wage for the 

18 taxable year, 

19 ‘‘(E) the maximum bracket amount for the 

20 32 percent bracket is the product of 11.6 multi21 plied by the annualized stability wage for the 

22 taxable year, 

23 ‘‘(F) the maximum bracket amount for the 

24 35 percent bracket is the product of 17.6 multiVerDate Sep 11 2014 20:19 Oct 21, 2024 Jkt 059200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H9873.IH H9873

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1 plied by the annualized stability wage for the 

2 taxable year, and 

3 ‘‘(G) the maximum bracket amount for the 

4 37 percent bracket is infinite. 

5 ‘‘(2) HEADS OF HOUSEHOLDS.—In the case of 

6 every head of household— 

7 ‘‘(A) the maximum bracket amount for the 

8 10 percent bracket is the product of 0.42 multi9 plied by the annualized stability wage for the 

10 taxable year, 

11 ‘‘(B) the maximum bracket amount for the 

12 12 percent bracket is the product of 1.52 multi13 plied by the annualized stability wage for the 

14 taxable year, 

15 ‘‘(C) the maximum bracket amount for the 

16 22 percent bracket is the product of 2.4 multi17 plied by the annualized stability wage for the 

18 taxable year, 

19 ‘‘(D) the maximum bracket amount for the 

20 24 percent bracket is the product of 4.6 multi21 plied by the annualized stability wage for the 

22 taxable year, 

23 ‘‘(E) the maximum bracket amount for the 

24 32 percent bracket is the product of 5.8 multiVerDate Sep 11 2014 20:19 Oct 21, 2024 Jkt 059200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\H9873.IH H9873

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1 plied by the annualized stability wage for the 

2 taxable year, 

3 ‘‘(F) the maximum bracket amount for the 

4 35 percent bracket is the product of 14.6 multi5 plied by the annualized stability wage for the 

6 taxable year, and 

7 ‘‘(G) the maximum bracket amount for the 

8 37 percent bracket is infinite. 

9 ‘‘(3) UNMARRIED INDIVIDUALS (OTHER THAN

10 SURVIVING SPOUSES AND HEADS OF HOUSE11 HOLDS).—In the case of every individual (other than 

12 a surviving spouse or a head of household) who is 

13 not a married individual (as defined in section 

14 7703)— 

15 ‘‘(A) the maximum bracket amount for the 

16 10 percent bracket is the product of 0.28 multi17 plied by the annualized stability wage for the 

18 taxable year, 

19 ‘‘(B) the maximum bracket amount for the 

20 12 percent bracket is the product of 1.14 multi21 plied by the annualized stability wage for the 

22 taxable year, 

23 ‘‘(C) the maximum bracket amount for the 

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1 plied by the annualized stability wage for the 

2 taxable year, 

3 ‘‘(D) the maximum bracket amount for the 

4 24 percent bracket is the product of 4.6 multi5 plied by the annualized stability wage for the 

6 taxable year, 

7 ‘‘(E) the maximum bracket amount for the 

8 32 percent bracket is the product of 5.8 multi9 plied by the annualized stability wage for the 

10 taxable year, 

11 ‘‘(F) the maximum bracket amount for the 

12 35 percent bracket is the product of 14.6 multi13 plied by the annualized stability wage for the 

14 taxable year, and 

15 ‘‘(G) the maximum bracket amount for the 

16 37 percent bracket is infinite. 

17 ‘‘(4) MARRIED INDIVIDUALS FILING SEPARATE

18 RETURNS.—In the case of every married individual 

19 (as defined in section 7703) who does not make a 

20 single return jointly with the individual’s spouse 

21 under section 6013— 

22 ‘‘(A) the maximum bracket amount for the 

23 10 percent bracket is the product of 0.28 multi24 plied by the annualized stability wage for the 

25 taxable year, 


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1 ‘‘(B) the maximum bracket amount for the 

2 12 percent bracket is the product of 1.14 multi3 plied by the annualized stability wage for the 

4 taxable year, 

5 ‘‘(C) the maximum bracket amount for the 

6 22 percent bracket is the product of 2.4 multi7 plied by the annualized stability wage for the 

8 taxable year, 

9 ‘‘(D) the maximum bracket amount for the 

10 24 percent bracket is the product of 4.6 multi11 plied by the annualized stability wage for the 

12 taxable year, 

13 ‘‘(E) the maximum bracket amount for the 

14 32 percent bracket is the product of 5.8 multi15 plied by the annualized stability wage for the 

16 taxable year, 

17 ‘‘(F) the maximum bracket amount for the 

18 35 percent bracket is the product of 8.8 multi19 plied by the annualized stability wage for the 

20 taxable year, and 

21 ‘‘(G) the maximum bracket amount for the 

22 37 percent bracket is infinite. 

23 ‘‘(5) ESTATES AND TRUSTS.—In the case of 

24 every estate and every trust for the taxable year— 


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1 ‘‘(A) the maximum bracket amount for the 

2 10 percent bracket is the product of 0.08 multi3 plied by the annualized stability wage for the 

4 taxable year, 

5 ‘‘(B) the maximum bracket amount for the 

6 24 percent bracket is the product of 0.27 multi7 plied by the annualized stability wage for the 

8 taxable year, 

9 ‘‘(C) the maximum bracket amount for the 

10 35 percent bracket is the product of 0.37 multi11 plied by the annualized stability wage for the 

12 taxable year, and 

13 ‘‘(D) the maximum bracket amount for the 

14 37 percent bracket is infinite. 

15 ‘‘(d) DEFINITIONS.—For purposes of this section— 

16 ‘‘(1) ANNUALIZED STABILITY WAGE.—The term 

17 ‘annualized stability wage’ means, with respect to 

18 any taxable year, the product of 2,080 multiplied by 

19 the stability wage (as defined in section 6 of the 

20 Fair Labor Standards Act of 1938) for the calendar 

21 year in which or with which such taxable year be22 gins. 

23 ‘‘(2) MAXIMUM TAX AMOUNT.— 


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1 ‘‘(A) IN GENERAL.—The term ‘maximum 

2 tax amount’ means, with respect to any tax 

3 bracket, the product of— 

4 ‘‘(i) the percentage which constitutes 

5 such tax bracket, multiplied by 

6 ‘‘(ii) the excess of— 

7 ‘‘(I) the maximum bracket 

8 amount for such tax bracket, over 

9 ‘‘(II) the highest maximum 

10 bracket amount for the taxpayer’s fil11 ing status which is less than the max12 imum bracket amount referred to in 

13 subclause (I). 

14 ‘‘(B) SPECIAL RULE FOR LOWEST TAX

15 BRACKET.—For purposes of determining the 

16 maximum tax amount with respect to the lowest 

17 tax bracket for a taxpayer’s filing status, the 

18 amount specified in subparagraph (A)(ii)(II) 

19 shall be treated as being zero. 

20 ‘‘(3) FILING STATUS.—The term ‘filing status’ 

21 means, with respect to any taxpayer, the status of 

22 such taxpayer as being described in paragraph (1), 

23 (2), (3), (4), or (5) of subsection (c). 

24 ‘‘(4) TAX BRACKETS.—The term ‘tax bracket’ 

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1 payer, each bracket for which a maximum bracket 

2 amount is determined for such filing status.’’. 

3 (b) CONFORMING AMENDMENTS.— 

4 (1) Section 1(f) of such Code is amended by 

5 striking all that precedes paragraph (3) and insert6 ing the following: 

7 ‘‘(f) PUBLICATION OF TAX TABLES; RETENTION OF

8 COST-OF-LIVING ADJUSTMENT FOR OTHER PROVI9 SIONS.— 

10 ‘‘(1) PUBLICATION OF TAX TABLES.—Not later 

11 than December 15 of 2024, and each subsequent 

12 calendar year, the Secretary shall publish tax tables 

13 which state the dollar amounts in effect under sub14 sections (b) and (c) with respect to taxable years be15 ginning in the succeeding calendar year.’’. 

16 (2) Section 1(f)(3) of such Code is amended by 

17 striking ‘‘For purposes of this subsection’’ and in18 serting ‘‘For purposes of any provision of law which 

19 refers to this subsection’’. 

20 (3) Section 1(f) of such Code is amended by 

21 striking paragraphs (7) and (8) and inserting the 

22 following new paragraph: 

23 ‘‘(7) ROUNDING.—If any increase determined under 

24 section 63(c)(4), section 68(b)(2), or section 151(d)(4) is 


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1 not a multiple of $50, such increase shall be rounded to 

2 the next lowest multiple of $50.’’. 

3 (4) Section 1 of such Code is amended by strik4 ing subsections (i) and (j). 

5 (c) EFFECTIVE DATE.—The amendments made by 

6 this section shall apply to taxable years beginning after 

7 December 31, 2024. 

8 SEC. 2. SURCHARGE ON HIGH INCOME INDIVIDUALS, ES9 TATES, AND TRUSTS. 

10 (a) IN GENERAL.—Part I of subchapter A of chapter 

11 1 of the Internal Revenue Code of 1986 is amended by 

12 inserting after section 1 the following new section: 

13 ‘‘SEC. 1A. SURCHARGE ON HIGH INCOME INDIVIDUALS, ES14 TATES, AND TRUSTS. 

15 ‘‘(a) GENERAL RULE.—In the case of a taxpayer 

16 other than a corporation, there is hereby imposed (in addi17 tion to any other tax imposed by this subtitle) a tax equal 

18 to the sum of— 

19 ‘‘(1) 3 percent of so much of the modified ad20 justed gross income of the taxpayer as exceeds— 

21 ‘‘(A) the product of 25 multiplied by the 

22 annualized stability wage for the taxable year, 

23 in the case of any taxpayer not described in 

24 subparagraph (B) or (C), 


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1 ‘‘(B) the product of 12.5 multiplied by the 

2 annualized stability wage for the taxable year, 

3 in the case of a married individual filing a sepa4 rate return, and 

5 ‘‘(C) the product of 4.8 multiplied by the 

6 annualized stability wage for the taxable year, 

7 in the case of an estate or trust, plus 

8 ‘‘(2) 5 percent of so much of the modified ad9 justed gross income of the taxpayer as exceeds— 

10 ‘‘(A) the product of 365 multiplied by the 

11 annualized stability wage for the taxable year, 

12 in the case of any taxpayer not described in 

13 subparagraph (B) or (C), 

14 ‘‘(B) the product of 182.5 multiplied by 

15 the annualized stability wage for the taxable 

16 year, in the case of a married individual filing 

17 a separate return, and 

18 ‘‘(C) the product of 12 multiplied by the 

19 annualized stability wage for the taxable year, 

20 in the case of an estate or trust. 

21 ‘‘(b) MODIFIED ADJUSTED GROSS INCOME.—For 

22 purposes of this section, the term ‘modified adjusted gross 

23 income’ means adjusted gross income reduced by any de24 duction (not taken into account in determining adjusted 

25 gross income) allowed for investment interest (as defined 


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1 in section 163(d)) or business interest (as defined in sec2 tion 163(j)). In the case of an estate or trust, adjusted 

3 gross income shall be determined as provided in section 

4 67(e), and reduced by the amount allowed as a deduction 

5 under section 642(c). 

6 ‘‘(c) ANNUALIZED STABILITY WAGE.—For purposes 

7 of this section, the term ‘annualized stability wage’ has 

8 the meaning given such term in section 1(d)(1). 

9 ‘‘(d) SPECIAL RULES.— 

10 ‘‘(1) NONRESIDENT ALIEN.—In the case of a 

11 nonresident alien individual (other than an indi12 vidual described in section 876(a) or 877(a)), only 

13 amounts taken into account in connection with the 

14 tax imposed under section 871(b) shall be taken into 

15 account under this section. 

16 ‘‘(2) CITIZENS AND RESIDENTS LIVING

17 ABROAD.—Each dollar amount which is applicable to 

18 any taxpayer under subsection (a) shall be decreased 

19 (but not below zero) by the excess (if any) of— 

20 ‘‘(A) the amounts excluded from the tax21 payer’s gross income under section 911, over 

22 ‘‘(B) the amounts of any deductions or ex23 clusions disallowed under section 911(d)(6) 

24 with respect to the amounts described in sub25 paragraph (A). 


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1 ‘‘(3) CHARITABLE TRUSTS.—Subsection (a) 

2 shall not apply to a trust all the unexpired interests 

3 in which are devoted to one or more of the purposes 

4 described in section 170(c)(2)(B). 

5 ‘‘(4) NOT TREATED AS TAX IMPOSED BY THIS

6 CHAPTER FOR CERTAIN PURPOSES.—The tax im7 posed under this section shall not be treated as tax 

8 imposed by this chapter for purposes of determining 

9 the amount of any credit under this chapter (other 

10 than sections 27 and 901) or for purposes of section 

11 55. 

12 ‘‘(5) ELECTING SMALL BUSINESS TRUSTS.—For 

13 purposes of the determination of adjusted gross in14 come, section 641(c)(1)(A) shall not apply and all 

15 portions of any electing small business trust shall be 

16 treated as a single trust. 

17 ‘‘(e) REGULATIONS.—The Secretary shall issue such 

18 regulations or other guidance as may be necessary or ap19 propriate to carry out the purposes of this section, includ20 ing regulations or other guidance to prevent the avoidance 

21 of the purposes of this section.’’. 

22 (b) COORDINATION WITH CERTAIN PROVISIONS.— 

23 (1) INTEREST ON CERTAIN DEFERRED TAX LI24 ABILITY.—Section 453A(c) of such Code is amended 

25 by redesignating paragraph (6) as paragraph (7) 


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1 and by inserting after paragraph (5) the following 

2 new paragraph: 

3 ‘‘(6) SURCHARGE ON HIGH INCOME INDIVID4 UALS TAKEN INTO ACCOUNT IN DETERMINING MAX5 IMUM RATE OF TAX.—For purposes of paragraph 

6 (3)(B), the maximum rate of tax in effect under sec7 tion 1 shall be treated as being equal to the sum of 

8 such rate and the rates in effect under paragraphs 

9 (1) and (2) of section 1A(a).’’. 

10 (2) ALIEN RESIDENTS OF PUERTO RICO, GUAM, 

11 AMERICAN SAMOA, OR THE NORTHERN MARIANA IS12 LANDS.—Section 876(a) of such Code is amended by 

13 striking section 1 and inserting ‘‘sections 1 and 1A’’. 

14 (3) EXPATRIATION TO AVOID TAX.—Section 

15 877(b) of such Code is amended by inserting ‘‘and 

16 section 1A’’ after ‘‘section 1 or 55’’. 

17 (4) LIMITATION ON FOREIGN TAX CREDIT.— 

18 (A) Section 904(b)(3)(E)(i)(I) of such 

19 Code is amended by inserting ‘‘increased by the 

20 sum of the rates set forth in paragraphs (1) 

21 and (2) of section 1A(a)’’ after ‘‘(whichever ap22 plies)’’. 

23 (B) Section 904(d)(2)(F) of such Code is 

24 amended by adding at the end the following: 

25 ‘‘For purposes of the first sentence of this subVerDate Sep 11 2014 20:19 Oct 21, 2024 Jkt 059200 PO 00000 Frm 00024 Fmt 6652 Sfmt 6201 E:\BILLS\H9873.IH H9873

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1 paragraph, the highest rate of tax specified in 

2 section 1 shall be treated as being equal to the 

3 sum of such rate and the rates in effect under 

4 paragraphs (1) and (2) of section 1A(a).’’. 

5 (5) ELECTION BY INDIVIDUALS TO BE SUBJECT

6 TO TAX AT CORPORATE RATES.—Section 962(a)(1) 

7 of such Code is amended by inserting ‘‘, 1A,’’ after 

8 ‘‘sections 1’’. 

9 (6) INTEREST ON CERTAIN TAX DEFERRAL.— 

10 Section 1291(c)(2) of such Code is amended by add11 ing at the end the following: ‘‘For purposes of the 

12 preceding sentence, the highest rate of tax in effect 

13 under section 1 shall be treated as being equal to 

14 the sum of such rate and the rates in effect under 

15 paragraphs (1) and (2) of section 1A(a).’’. 

16 (7) AVERAGING OF FARM INCOME.—Section 

17 1301(a) of such Code is amended by striking ‘‘sec18 tion 1’’ both places it appears and inserting ‘‘sec19 tions 1 and 1A’’. 

20 (8) TITLE 11 CASES.—Section 1398(c)(2) of 

21 such Code is amended by inserting ‘‘and tax shall be 

22 imposed under section 1A by treating the estate as 

23 a married individual filing a separate return’’ before 

24 the period at the end. 


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1 (9) WITHHOLDING OF TAX ON FOREIGN PART2 NERS’ SHARE OF EFFECTIVELY CONNECTED IN3 COME.—Section 1446(b)(2) of such Code is amended 

4 by adding at the end the following flush sentence: 

5 ‘‘For purposes of subparagraph (A), the highest rate 

6 of tax in effect under section 1 shall be treated as 

7 being equal to the sum of such rate and the rates 

8 in effect under paragraphs (1) and (2) of section 

9 1A(a).’’. 

10 (10) RELIEF FROM JOINT AND SEVERAL LI11 ABILITY ON JOINT RETURN.—Section 6015(d)(2)(B) 

12 of such Code is amended by inserting ‘‘, 1A,’’ after 

13 ‘‘section 1’’. 

14 (11) PARTNERSHIP ADJUSTMENTS.— 

15 (A) Section 6225(b)(1) of such Code is 

16 amended by adding at the end the following 

17 flush sentence: 

18 ‘‘For purposes of subparagraph (B), the highest rate 

19 of tax in effect under section 1 shall be treated as 

20 being equal to the sum of such rate and the rates 

21 in effect under paragraphs (1) and (2) of section 

22 1A(a).’’. 

23 (B) Section 6225(c)(4)(A) of such Code is 

24 amended— 


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1 (i) by striking ‘‘subsection (b)(1)(A)’’ 

2 and inserting ‘‘subsection (b)(1)(B)’’, and 

3 (ii) by striking ‘‘or’’ at the end of 

4 clause (i), by adding ‘‘or’’ at the end of 

5 clause (ii), and by inserting after clause 

6 (ii) the following new clause: 

7 ‘‘(iii) is not an individual subject to 

8 one or both of the rates of tax in effect 

9 under paragraphs (1) and (2) of section 

10 1A(a),’’. 

11 (12) REQUIRED PAYMENTS FOR ENTITIES

12 ELECTING NOT TO HAVE REQUIRED TAXABLE

13 YEAR.—Section 7519(b) of such Code is amended by 

14 inserting ‘‘and increased by the sum of the rates in 

15 effect under paragraphs (1) and (2) of section 

16 1A(a)’’ before the period at the end. 

17 (c) CLERICAL AMENDMENT.—The table of sections 

18 for part I of subchapter A of chapter 1 of such Code is 

19 amended by inserting after the item relating to section 1 

20 the following new item: 

‘‘Sec. 1A. Surcharge on high income individuals.’’. 

21 (d) EFFECTIVE DATE.—The amendments made by 

22 this section shall apply to taxable years beginning after 

23 December 31, 2024. 


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1 SEC. 3. ALTERNATIVE MAXIMUM TAX FOR LOW-INCOME IN2 DIVIDUALS. 

3 (a) IN GENERAL.—Part I of subchapter A of chapter 

4 1 of the Internal Revenue Code of 1986, as amended by 

5 section 202, is amended by inserting after section 1A the 

6 following new section: 

7 ‘‘SEC. 1B. ALTERNATIVE MAXIMUM TAX FOR LOW-INCOME 

8 INDIVIDUALS. 

9 ‘‘(a) IN GENERAL.—In the case of an qualified low10 income individual, the tax imposed under section 1 for any 

11 taxable year shall not exceed 24.4 percent of the excess 

12 of— 

13 ‘‘(1) the taxpayer’s modified adjusted gross in14 come for such taxable year, over 

15 ‘‘(2) the cost-of-living exemption for such tax16 able year. 

17 ‘‘(b) QUALIFIED LOW-INCOME INDIVIDUAL.—For 

18 purposes of this section, the term ‘qualified low-income in19 dividual’ means, with respect to any taxable year, any indi20 vidual (other than an estate or trust) if the taxpayers 

21 modified adjusted gross income for such taxable year is 

22 less than 200 percent of the cost-of-living exemption for 

23 such taxable year. 

24 ‘‘(c) COST-OF-LIVING EXEMPTION.—For purposes of 

25 this section— 


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1 ‘‘(1) IN GENERAL.—The term ‘cost-of-living ex2 emption’ means, with respect to any taxable year— 

3 ‘‘(A) in the case of a taxpayer not de4 scribed in subparagraph (B) or (C), 100 per5 cent of annualized cost-of-living wage, 

6 ‘‘(B) in the case of a joint return, 200 per7 cent of the annualized cost-of-living wage, and 

8 ‘‘(C) in the case of a head of household, 

9 140 percent of the annualized cost-of-living 

10 wage. 

11 ‘‘(2) ANNUALIZED COST-OF-LIVING WAGE.—The 

12 term ‘annualized cost-of-living wage’ means, with re13 spect to any taxable year, the product of 2,080 mul14 tiplied by the cost-of-living wage (as defined in sec15 tion 6 of the Fair Labor Standards Act of 1938) for 

16 the calendar year in which or with which such tax17 able year begins. 

18 ‘‘(d) MODIFIED ADJUSTED GROSS INCOME.—For 

19 purposes of this section, the term ‘modified adjusted gross 

20 income’ means adjusted gross income increased by any 

21 amount excluded from gross income under section 911, 

22 931, or 933.’’. 

23 (b) CLERICAL AMENDMENT.—The table of sections 

24 for part I of subchapter A of chapter 1 of such Code, as 


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1 amended by section 202, is amended by inserting after the 

2 item relating to section 1A the following new item: 

‘‘Sec. 1B. Alternative maximum tax for low-income individuals.’’. 

3 (c) EFFECTIVE DATE.—The amendments made by 

4 this section shall apply to taxable years beginning after 

5 December 31, 2024. 

6 TITLE II—EARNED INCOME 

7 DISALLOWANCE 

8 SEC. 301. EARNED INCOME DISALLOWANCE. 

9 (a) IN GENERAL.—Notwithstanding any other provi10 sion of law, for purposes of determining the eligibility of 

11 a specified individual for benefits or assistance (or the 

12 amount or extent of benefits or assistance) under any 

13 means-tested Federal program, or under any means-tested 

14 State or local program financed in whole or in part with 

15 Federal funds— 

16 (1) with respect to the 1-year period beginning 

17 on the effective date described in section 401, if the 

18 earned income of such individual for such 1-year pe19 riod (determined without regard to this section) does 

20 not exceed the product of 2,080 multiplied by the 

21 cost-of-living wage (as defined in section 6 of the 

22 Fair Labor Standards Act of 1938) for the calendar 

23 year in which such 1-year period ends, the earned 

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1 ceeding the earned income of such individual for the 

2 1-year period ending on such effective date, and 

3 (2) with respect to the 1-year period beginning 

4 1 year after such effective date, if the earned income 

5 of such individual for such 1-year period (deter6 mined without regard to this section) does not ex7 ceed the product of 2,080 multiplied by the cost-of8 living wage (as defined in section 6 of the Fair 

9 Labor Standards Act of 1938) for the calendar year 

10 in which such 1-year period ends, the earned income 

11 of such individual shall not be treated as exceeding 

12 the sum of— 

13 (A) the earned income of such individual 

14 for the 1-year period ending on such effective 

15 date, plus 

16 (B) 50 percent of the excess (if any) of— 

17 (i) the earned income of such indi18 vidual for the 1-year period beginning 1 

19 year after such effective date, over 

20 (ii) the earned income of such indi21 vidual for the 1-year period ending on such 

22 effective date. 

23 (b) SPECIFIED INDIVIDUAL.—For purposes of this 

24 section, the ‘‘specified individual’’ means any individual if 

25 the earned income of such individual for the 1-year period 


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1 ending on the effective date described in section 410 ex2 ceeds zero. 

3 TITLE III—EFFECTIVE DATE 

4 SEC. 401. EFFECTIVE DATE. 

5 Except as otherwise specified in this Act, this Act, 

6 and the amendments made by this Act, shall take effect 

7 on the 1st day of the 3rd month that begins after the 

8 date of enactment of this Act. 

Æ 


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