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[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 9873 Introduced in House (IH)]

<DOC>

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.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``American Stability 
Act''.
    (b) Table of Contents.--The table of contents for 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.

                         TITLE I--MINIMUM WAGE

SEC. 101. MINIMUM WAGE INCREASES.

    (a) In General.--Section 6(a)(1) of the Fair Labor Standards Act of 
1938 (29 U.S.C. 206(a)(1)) is amended to read as follows:
            ``(1) except as otherwise provided in this section, not 
        less than--
                    ``(A) $15.00 an hour for the first calendar year 
                beginning after the date of enactment of the American 
                Stability Act;
                    ``(B) for each calendar year during the interval 
                period (as defined in subsection (g)), a minimum wage 
                equal to the amount determined under this paragraph for 
                the preceding year, increased by the lesser of--
                            ``(i) 10 percent; or
                            ``(ii) the amount necessary for the minimum 
                        wage to equal the stability wage for such 
                        calendar year; and
                    ``(C) for each calendar year that begins after the 
                interval period, the stability wage for such calendar 
                year.''.
    (b) Stability Wage.--Section 6 of such Act (29 U.S.C. 206) is 
further amended by adding at the end the following:
    ``(h) Stability Wage.--
            ``(1) In general.--
                    ``(A) Determination.--The stability wage determined 
                under this paragraph for a calendar year shall be an 
                amount equal to the greater of--
                            ``(i) the average hourly earnings wage 
                        determined under paragraph (2) for that 
                        calendar year;
                            ``(ii) the cost-of-living wage determined 
                        under paragraph (3) for that calendar year; or
                            ``(iii) the stability wage in effect for 
                        the preceding year.
                    ``(B) Rounding.--If the amount determined under 
                subparagraph (A) is not a multiple of 5 cents, such 
                amount shall be rounded to the next higher multiple of 
                5 cents.
            ``(2) Average hourly earnings wage.--The average hourly 
        earnings wage for any calendar year shall be an amount equal to 
        $20.00, multiplied by the ratio of--
                    ``(A) the average hourly earnings for the year 
                preceding such calendar year, to
                    ``(B) the average hourly earnings for the year 
                preceding the calendar year of the date of enactment of 
                the American Stability Act.
            ``(3) Cost-of-living wage.--The cost-of-living wage for any 
        calendar year shall be an amount equal to $20.00, multiplied by 
        the ratio of--
                    ``(A) the CPI-U for the year preceding such 
                calendar year, to
                    ``(B) the CPI-U for the year preceding the calendar 
                year of the date of enactment of the American Stability 
                Act.
            ``(4) Definitions.--For the purposes of this paragraph and 
        subsection (a)(1):
                    ``(A) CPI-U.--The term `CPI-U' means, when used 
                with respect to a calendar year, the Consumer Price 
                Index for all urban consumers, as published by the 
                Bureau of Labor Statistics, for September of such year.
                    ``(B) Average hourly earnings.--The term `average 
                hourly earnings' means, when used with respect to a 
                calendar year, the total private average hourly 
                earnings from the data on average hourly and weekly 
                earnings of production and nonsupervisory employees on 
                private nonfarm payrolls by industry sector, seasonally 
                adjusted, as published by the Bureau of Labor 
                Statistics, for September of such year.
                    ``(C) Interval period.--The term `interval period' 
                means the period--
                            ``(i) beginning on the first day of the 1st 
                        calendar year beginning after the date of 
                        enactment of the American Stability Act; and
                            ``(ii) ending at the close of the last day 
                        of the first calendar year for which the 
                        minimum wage under subsection (a)(1) equals the 
                        stability wage determined under paragraph (1) 
                        of this subsection for such calendar year.''.

SEC. 102. TIPPED EMPLOYEES.

    (a) Base Minimum Wage for Tipped Employees and Tips Retained by 
Employees.--
            (1) In general.--Section 3(m)(2)(A) of the Fair Labor 
        Standards Act of 1938 (29 U.S.C. 203(m)(2)(A)) shall be amended 
        to read as follows:
            ``(A) The wage required to be paid to a tipped employee 
        shall be the wage set forth in section 6(a)(1). Any employee 
        shall have the right to retain any tips received by such 
        employee, except that this subsection shall not be construed to 
        prohibit the pooling of tips among employees who customarily 
        and regularly receive tips. An employer shall inform each 
        employee of the right and exception provided under the 
        preceding sentence.''.
            (2) Effective date.--The amendment made by subsection (a) 
        shall take effect on January 1 of the first calendar year that 
        begins after the date of enactment of this Act.
    (b) Penalties.--Section 16 of the Fair Labor Standards Act of 1938 
(29 U.S.C. 216) is amended--
            (1) in the third sentence of subsection (b), by inserting 
        ``or used'' after ``kept''; and
            (2) in the second sentence of subsection (e)(2), by 
        inserting ``or used'' after ``kept''.

SEC. 103. SCHEDULED REPEAL OF SEPARATE MINIMUM WAGE FOR NEWLY HIRED 
              EMPLOYEES WHO ARE LESS THAN 20 YEARS OLD.

    (a) In General.--Section 6(g) of the Fair Labor Standards Act of 
1938 (29 U.S.C. 206(g)), as amended by subsection (a), shall be 
repealed.
    (b) Effective Date.--The repeal made by subsection (a) shall take 
effect on January 1 of the first calendar year that begins after the 
date of enactment of this Act.

SEC. 104. PUBLICATION OF NOTICE; TECHNICAL ASSISTANCE.

    Section 6 of the Fair Labor Standards Act of 1938 (29 U.S.C. 206), 
as amended by section 2(b), is further amended by adding at the end the 
following:
    ``(i) Publication of Wage Rates.--Not later than 60 days prior to 
the effective date of any increase in the required wage determined 
under subsection (a)(1), the Secretary shall publish in the Federal 
Register and on the website of the Department of Labor a notice 
announcing each increase in such required wage.
    ``(j) Transition Assistance.--Upon request, the Secretary shall 
provide--
            ``(1) technical assistance and information to employers for 
        the purposes of--
                    ``(A) assisting such employers to comply with 
                subsection (a), as amended by the American Stability 
                Act; and
                    ``(B) ensuring continuing employment opportunities 
                for individuals with disabilities who received a 
                special minimum wage rate under this section 14(c) (as 
                in effect on the day before the date of enactment of 
                the American Stability Act); and
            ``(2) information to individuals who were employed at a 
        special minimum wage rate under section 14(c) (as in effect on 
        the day before the date of enactment of the American Stability 
        Act), which may include referrals to Federal or State entities 
        with expertise in competitive integrated employment.''.

SEC. 105. PROMOTING ECONOMIC SELF-SUFFICIENCY FOR INDIVIDUALS WITH 
              DISABILITIES.

    (a) Transition to Fair Wages for Individuals With Disabilities.--
            (1) In general.--Subparagraph (A) of section 14(c)(1) of 
        the Fair Labor Standards Act of 1938 (29 U.S.C. 214(c)(1)) 
        shall be amended to read as follows:
            ``(A) at a rate that equals or exceeds, for each year, the 
        wage set forth in section 6(a)(1).''.
            (2) Effective date.--The amendment made by paragraph (A) 
        shall take effect on January 1 of the first calendar year that 
        begins after the date of enactment of this Act.
    (b) Prohibition on New Special Certificates.--
            (1) In general.--Section 14(c) of the Fair Labor Standards 
        Act of 1938 (29 U.S.C. 214(c)) is amended by adding at the end 
        the following:
    ``(6) Prohibition on New Special Certificates.--Notwithstanding 
paragraph (1), the Secretary shall not issue a special certificate 
under this subsection to an employer that was not issued a special 
certificate under this subsection before the date of enactment of the 
American Stability Act.''.
            (2) Sunset.--Section 14(c) of the Fair Labor Standards Act 
        of 1938 (29 U.S.C. 214(c)), as amended by paragraph (2), is 
        further amended by adding at the end the following:
    ``(7) Sunset.--On January 1 of the first calendar year that begins 
after the date of enactment of the American Stability Act, the 
authority to issue special certificates under paragraph (1) shall 
expire, and no special certificates issued under paragraph (1) shall 
have any legal effect .''.
            (3) Effective date.--The amendments made by this paragraph 
        shall take effect on the date of enactment of this Act.

                   TITLE I--INCOME TAX MODIFICATIONS

SEC. 1. MODIFICATION OF INCOME TAX BRACKETS BASED ON ANNUALIZED 
              STABILITY WAGE.

    (a) In General.--Section 1 of the Internal Revenue Code of 1986 is 
amended by striking subsections (a), (b), (c), (d), and (e) and 
inserting the following new subsections:
    ``(a) In General.--There is hereby imposed on the taxable income of 
every individual, every estate, and every trust a tax determined under 
this section.
    ``(b) Amount of Tax.--The tax determined under this section shall 
be equal to--
            ``(1) in the case of any taxpayer whose taxable income does 
        not exceed the maximum bracket amount for the lowest tax 
        bracket for the taxpayer's filing status, the product of the 
        percentage which constitutes such lowest tax bracket multiplied 
        by such taxable income, and
            ``(2) in the case of any taxpayer whose taxable income 
        exceeds the maximum bracket amount for such lowest tax bracket, 
        the sum of--
                    ``(A) the maximum tax amount for each tax bracket 
                for the taxpayer's filing status with respect to which 
                the taxpayer's taxable income exceeds the maximum 
                bracket amount for such tax bracket, plus
                    ``(B) the product of--
                            ``(i) the percentage which constitutes the 
                        tax bracket for the taxpayer's filing status 
                        which is next above the highest bracket amount 
                        for which an amount is included under 
                        subparagraph (A), multiplied by
                            ``(ii) so much of the taxable income of the 
                        taxpayer as exceeds the maximum bracket amount 
                        of such highest tax bracket.
    ``(c) Determination of Maximum Bracket Amounts.--
            ``(1) Married individuals filing joint returns and 
        surviving spouses.--In the case of every married individual (as 
        defined in section 7703) who makes a single return jointly with 
        the individual's spouse under section 6013, and every surviving 
        spouse--
                    ``(A) the maximum bracket amount for the 10 percent 
                bracket is the product of 0.56 multiplied by the 
                annualized stability wage for the taxable year,
                    ``(B) the maximum bracket amount for the 12 percent 
                bracket is the product of 2.28 multiplied by the 
                annualized stability wage for the taxable year,
                    ``(C) the maximum bracket amount for the 22 percent 
                bracket is the product of 4.8 multiplied by the 
                annualized stability wage for the taxable year,
                    ``(D) the maximum bracket amount for the 24 percent 
                bracket is the product of 9.2 multiplied by the 
                annualized stability wage for the taxable year,
                    ``(E) the maximum bracket amount for the 32 percent 
                bracket is the product of 11.6 multiplied by the 
                annualized stability wage for the taxable year,
                    ``(F) the maximum bracket amount for the 35 percent 
                bracket is the product of 17.6 multiplied by the 
                annualized stability wage for the taxable year, and
                    ``(G) the maximum bracket amount for the 37 percent 
                bracket is infinite.
            ``(2) Heads of households.--In the case of every head of 
        household--
                    ``(A) the maximum bracket amount for the 10 percent 
                bracket is the product of 0.42 multiplied by the 
                annualized stability wage for the taxable year,
                    ``(B) the maximum bracket amount for the 12 percent 
                bracket is the product of 1.52 multiplied by the 
                annualized stability wage for the taxable year,
                    ``(C) the maximum bracket amount for the 22 percent 
                bracket is the product of 2.4 multiplied by the 
                annualized stability wage for the taxable year,
                    ``(D) the maximum bracket amount for the 24 percent 
                bracket is the product of 4.6 multiplied by the 
                annualized stability wage for the taxable year,
                    ``(E) the maximum bracket amount for the 32 percent 
                bracket is the product of 5.8 multiplied by the 
                annualized stability wage for the taxable year,
                    ``(F) the maximum bracket amount for the 35 percent 
                bracket is the product of 14.6 multiplied by the 
                annualized stability wage for the taxable year, and
                    ``(G) the maximum bracket amount for the 37 percent 
                bracket is infinite.
            ``(3) Unmarried individuals (other than surviving spouses 
        and heads of households).--In the case of every individual 
        (other than a surviving spouse or a head of household) who is 
        not a married individual (as defined in section 7703)--
                    ``(A) the maximum bracket amount for the 10 percent 
                bracket is the product of 0.28 multiplied by the 
                annualized stability wage for the taxable year,
                    ``(B) the maximum bracket amount for the 12 percent 
                bracket is the product of 1.14 multiplied by the 
                annualized stability wage for the taxable year,
                    ``(C) the maximum bracket amount for the 22 percent 
                bracket is the product of 2.4 multiplied by the 
                annualized stability wage for the taxable year,
                    ``(D) the maximum bracket amount for the 24 percent 
                bracket is the product of 4.6 multiplied by the 
                annualized stability wage for the taxable year,
                    ``(E) the maximum bracket amount for the 32 percent 
                bracket is the product of 5.8 multiplied by the 
                annualized stability wage for the taxable year,
                    ``(F) the maximum bracket amount for the 35 percent 
                bracket is the product of 14.6 multiplied by the 
                annualized stability wage for the taxable year, and
                    ``(G) the maximum bracket amount for the 37 percent 
                bracket is infinite.
            ``(4) Married individuals filing separate returns.--In the 
        case of every married individual (as defined in section 7703) 
        who does not make a single return jointly with the individual's 
        spouse under section 6013--
                    ``(A) the maximum bracket amount for the 10 percent 
                bracket is the product of 0.28 multiplied by the 
                annualized stability wage for the taxable year,
                    ``(B) the maximum bracket amount for the 12 percent 
                bracket is the product of 1.14 multiplied by the 
                annualized stability wage for the taxable year,
                    ``(C) the maximum bracket amount for the 22 percent 
                bracket is the product of 2.4 multiplied by the 
                annualized stability wage for the taxable year,
                    ``(D) the maximum bracket amount for the 24 percent 
                bracket is the product of 4.6 multiplied by the 
                annualized stability wage for the taxable year,
                    ``(E) the maximum bracket amount for the 32 percent 
                bracket is the product of 5.8 multiplied by the 
                annualized stability wage for the taxable year,
                    ``(F) the maximum bracket amount for the 35 percent 
                bracket is the product of 8.8 multiplied by the 
                annualized stability wage for the taxable year, and
                    ``(G) the maximum bracket amount for the 37 percent 
                bracket is infinite.
            ``(5) Estates and trusts.--In the case of every estate and 
        every trust for the taxable year--
                    ``(A) the maximum bracket amount for the 10 percent 
                bracket is the product of 0.08 multiplied by the 
                annualized stability wage for the taxable year,
                    ``(B) the maximum bracket amount for the 24 percent 
                bracket is the product of 0.27 multiplied by the 
                annualized stability wage for the taxable year,
                    ``(C) the maximum bracket amount for the 35 percent 
                bracket is the product of 0.37 multiplied by the 
                annualized stability wage for the taxable year, and
                    ``(D) the maximum bracket amount for the 37 percent 
                bracket is infinite.
    ``(d) Definitions.--For purposes of this section--
            ``(1) Annualized stability wage.--The term `annualized 
        stability wage' means, with respect to any taxable year, the 
        product of 2,080 multiplied by the stability wage (as defined 
        in section 6 of the Fair Labor Standards Act of 1938) for the 
        calendar year in which or with which such taxable year begins.
            ``(2) Maximum tax amount.--
                    ``(A) In general.--The term `maximum tax amount' 
                means, with respect to any tax bracket, the product 
                of--
                            ``(i) the percentage which constitutes such 
                        tax bracket, multiplied by
                            ``(ii) the excess of--
                                    ``(I) the maximum bracket amount 
                                for such tax bracket, over
                                    ``(II) the highest maximum bracket 
                                amount for the taxpayer's filing status 
                                which is less than the maximum bracket 
                                amount referred to in subclause (I).
                    ``(B) Special rule for lowest tax bracket.--For 
                purposes of determining the maximum tax amount with 
                respect to the lowest tax bracket for a taxpayer's 
                filing status, the amount specified in subparagraph 
                (A)(ii)(II) shall be treated as being zero.
            ``(3) Filing status.--The term `filing status' means, with 
        respect to any taxpayer, the status of such taxpayer as being 
        described in paragraph (1), (2), (3), (4), or (5) of subsection 
        (c).
            ``(4) Tax brackets.--The term `tax bracket' means, with 
        respect to the filing status of any taxpayer, each bracket for 
        which a maximum bracket amount is determined for such filing 
        status.''.
    (b) Conforming Amendments.--
            (1) Section 1(f) of such Code is amended by striking all 
        that precedes paragraph (3) and inserting the following:
    ``(f) Publication of Tax Tables; Retention of Cost-of-Living 
Adjustment for Other Provisions.--
            ``(1) Publication of tax tables.--Not later than December 
        15 of 2024, and each subsequent calendar year, the Secretary 
        shall publish tax tables which state the dollar amounts in 
        effect under subsections (b) and (c) with respect to taxable 
        years beginning in the succeeding calendar year.''.
            (2) Section 1(f)(3) of such Code is amended by striking 
        ``For purposes of this subsection'' and inserting ``For 
        purposes of any provision of law which refers to this 
        subsection''.
            (3) Section 1(f) of such Code is amended by striking 
        paragraphs (7) and (8) and inserting the following new 
        paragraph:
    ``(7) Rounding.--If any increase determined under section 63(c)(4), 
section 68(b)(2), or section 151(d)(4) is not a multiple of $50, such 
increase shall be rounded to the next lowest multiple of $50.''.
            (4) Section 1 of such Code is amended by striking 
        subsections (i) and (j).
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2024.

SEC. 2. SURCHARGE ON HIGH INCOME INDIVIDUALS, ESTATES, AND TRUSTS.

    (a) In General.--Part I of subchapter A of chapter 1 of the 
Internal Revenue Code of 1986 is amended by inserting after section 1 
the following new section:

``SEC. 1A. SURCHARGE ON HIGH INCOME INDIVIDUALS, ESTATES, AND TRUSTS.

    ``(a) General Rule.--In the case of a taxpayer other than a 
corporation, there is hereby imposed (in addition to any other tax 
imposed by this subtitle) a tax equal to the sum of--
            ``(1) 3 percent of so much of the modified adjusted gross 
        income of the taxpayer as exceeds--
                    ``(A) the product of 25 multiplied by the 
                annualized stability wage for the taxable year, in the 
                case of any taxpayer not described in subparagraph (B) 
                or (C),
                    ``(B) the product of 12.5 multiplied by the 
                annualized stability wage for the taxable year, in the 
                case of a married individual filing a separate return, 
                and
                    ``(C) the product of 4.8 multiplied by the 
                annualized stability wage for the taxable year, in the 
                case of an estate or trust, plus
            ``(2) 5 percent of so much of the modified adjusted gross 
        income of the taxpayer as exceeds--
                    ``(A) the product of 365 multiplied by the 
                annualized stability wage for the taxable year, in the 
                case of any taxpayer not described in subparagraph (B) 
                or (C),
                    ``(B) the product of 182.5 multiplied by the 
                annualized stability wage for the taxable year, in the 
                case of a married individual filing a separate return, 
                and
                    ``(C) the product of 12 multiplied by the 
                annualized stability wage for the taxable year, in the 
                case of an estate or trust.
    ``(b) Modified Adjusted Gross Income.--For purposes of this 
section, the term `modified adjusted gross income' means adjusted gross 
income reduced by any deduction (not taken into account in determining 
adjusted gross income) allowed for investment interest (as defined in 
section 163(d)) or business interest (as defined in section 163(j)). In 
the case of an estate or trust, adjusted gross income shall be 
determined as provided in section 67(e), and reduced by the amount 
allowed as a deduction under section 642(c).
    ``(c) Annualized Stability Wage.--For purposes of this section, the 
term `annualized stability wage' has the meaning given such term in 
section 1(d)(1).
    ``(d) Special Rules.--
            ``(1) Nonresident alien.--In the case of a nonresident 
        alien individual (other than an individual described in section 
        876(a) or 877(a)), only amounts taken into account in 
        connection with the tax imposed under section 871(b) shall be 
        taken into account under this section.
            ``(2) Citizens and residents living abroad.--Each dollar 
        amount which is applicable to any taxpayer under subsection (a) 
        shall be decreased (but not below zero) by the excess (if any) 
        of--
                    ``(A) the amounts excluded from the taxpayer's 
                gross income under section 911, over
                    ``(B) the amounts of any deductions or exclusions 
                disallowed under section 911(d)(6) with respect to the 
                amounts described in subparagraph (A).
            ``(3) Charitable trusts.--Subsection (a) shall not apply to 
        a trust all the unexpired interests in which are devoted to one 
        or more of the purposes described in section 170(c)(2)(B).
            ``(4) Not treated as tax imposed by this chapter for 
        certain purposes.--The tax imposed under this section shall not 
        be treated as tax imposed by this chapter for purposes of 
        determining the amount of any credit under this chapter (other 
        than sections 27 and 901) or for purposes of section 55.
            ``(5) Electing small business trusts.--For purposes of the 
        determination of adjusted gross income, section 641(c)(1)(A) 
        shall not apply and all portions of any electing small business 
        trust shall be treated as a single trust.
    ``(e) Regulations.--The Secretary shall issue such regulations or 
other guidance as may be necessary or appropriate to carry out the 
purposes of this section, including regulations or other guidance to 
prevent the avoidance of the purposes of this section.''.
    (b) Coordination With Certain Provisions.--
            (1) Interest on certain deferred tax liability.--Section 
        453A(c) of such Code is amended by redesignating paragraph (6) 
        as paragraph (7) and by inserting after paragraph (5) the 
        following new paragraph:
            ``(6) Surcharge on high income individuals taken into 
        account in determining maximum rate of tax.--For purposes of 
        paragraph (3)(B), the maximum rate of tax in effect under 
        section 1 shall be treated as being equal to the sum of such 
        rate and the rates in effect under paragraphs (1) and (2) of 
        section 1A(a).''.
            (2) Alien residents of puerto rico, guam, american samoa, 
        or the northern mariana islands.--Section 876(a) of such Code 
        is amended by striking section 1 and inserting ``sections 1 and 
        1A''.
            (3) Expatriation to avoid tax.--Section 877(b) of such Code 
        is amended by inserting ``and section 1A'' after ``section 1 or 
        55''.
            (4) Limitation on foreign tax credit.--
                    (A) Section 904(b)(3)(E)(i)(I) of such Code is 
                amended by inserting ``increased by the sum of the 
                rates set forth in paragraphs (1) and (2) of section 
                1A(a)'' after ``(whichever applies)''.
                    (B) Section 904(d)(2)(F) of such Code is amended by 
                adding at the end the following: ``For purposes of the 
                first sentence of this subparagraph, the highest rate 
                of tax specified in section 1 shall be treated as being 
                equal to the sum of such rate and the rates in effect 
                under paragraphs (1) and (2) of section 1A(a).''.
            (5) Election by individuals to be subject to tax at 
        corporate rates.--Section 962(a)(1) of such Code is amended by 
        inserting ``, 1A,'' after ``sections 1''.
            (6) Interest on certain tax deferral.--Section 1291(c)(2) 
        of such Code is amended by adding at the end the following: 
        ``For purposes of the preceding sentence, the highest rate of 
        tax in effect under section 1 shall be treated as being equal 
        to the sum of such rate and the rates in effect under 
        paragraphs (1) and (2) of section 1A(a).''.
            (7) Averaging of farm income.--Section 1301(a) of such Code 
        is amended by striking ``section 1'' both places it appears and 
        inserting ``sections 1 and 1A''.
            (8) Title 11 cases.--Section 1398(c)(2) of such Code is 
        amended by inserting ``and tax shall be imposed under section 
        1A by treating the estate as a married individual filing a 
        separate return'' before the period at the end.
            (9) Withholding of tax on foreign partners' share of 
        effectively connected income.--Section 1446(b)(2) of such Code 
        is amended by adding at the end the following flush sentence:
        ``For purposes of subparagraph (A), the highest rate of tax in 
        effect under section 1 shall be treated as being equal to the 
        sum of such rate and the rates in effect under paragraphs (1) 
        and (2) of section 1A(a).''.
            (10) Relief from joint and several liability on joint 
        return.--Section 6015(d)(2)(B) of such Code is amended by 
        inserting ``, 1A,'' after ``section 1''.
            (11) Partnership adjustments.--
                    (A) Section 6225(b)(1) of such Code is amended by 
                adding at the end the following flush sentence:
        ``For purposes of subparagraph (B), the highest rate of tax in 
        effect under section 1 shall be treated as being equal to the 
        sum of such rate and the rates in effect under paragraphs (1) 
        and (2) of section 1A(a).''.
                    (B) Section 6225(c)(4)(A) of such Code is amended--
                            (i) by striking ``subsection (b)(1)(A)'' 
                        and inserting ``subsection (b)(1)(B)'', and
                            (ii) by striking ``or'' at the end of 
                        clause (i), by adding ``or'' at the end of 
                        clause (ii), and by inserting after clause (ii) 
                        the following new clause:
                            ``(iii) is not an individual subject to one 
                        or both of the rates of tax in effect under 
                        paragraphs (1) and (2) of section 1A(a),''.
            (12) Required payments for entities electing not to have 
        required taxable year.--Section 7519(b) of such Code is amended 
        by inserting ``and increased by the sum of the rates in effect 
        under paragraphs (1) and (2) of section 1A(a)'' before the 
        period at the end.
    (c) Clerical Amendment.--The table of sections for part I of 
subchapter A of chapter 1 of such Code is amended by inserting after 
the item relating to section 1 the following new item:

``Sec. 1A. Surcharge on high income individuals.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2024.

SEC. 3. ALTERNATIVE MAXIMUM TAX FOR LOW-INCOME INDIVIDUALS.

    (a) In General.--Part I of subchapter A of chapter 1 of the 
Internal Revenue Code of 1986, as amended by section 202, is amended by 
inserting after section 1A the following new section:

``SEC. 1B. ALTERNATIVE MAXIMUM TAX FOR LOW-INCOME INDIVIDUALS.

    ``(a) In General.--In the case of an qualified low-income 
individual, the tax imposed under section 1 for any taxable year shall 
not exceed 24.4 percent of the excess of--
            ``(1) the taxpayer's modified adjusted gross income for 
        such taxable year, over
            ``(2) the cost-of-living exemption for such taxable year.
    ``(b) Qualified Low-Income Individual.--For purposes of this 
section, the term `qualified low-income individual' means, with respect 
to any taxable year, any individual (other than an estate or trust) if 
the taxpayers modified adjusted gross income for such taxable year is 
less than 200 percent of the cost-of-living exemption for such taxable 
year.
    ``(c) Cost-of-Living Exemption.--For purposes of this section--
            ``(1) In general.--The term `cost-of-living exemption' 
        means, with respect to any taxable year--
                    ``(A) in the case of a taxpayer not described in 
                subparagraph (B) or (C), 100 percent of annualized 
                cost-of-living wage,
                    ``(B) in the case of a joint return, 200 percent of 
                the annualized cost-of-living wage, and
                    ``(C) in the case of a head of household, 140 
                percent of the annualized cost-of-living wage.
            ``(2) Annualized cost-of-living wage.--The term `annualized 
        cost-of-living wage' means, with respect to any taxable year, 
        the product of 2,080 multiplied by the cost-of-living wage (as 
        defined in section 6 of the Fair Labor Standards Act of 1938) 
        for the calendar year in which or with which such taxable year 
        begins.
    ``(d) Modified Adjusted Gross Income.--For purposes of this 
section, the term `modified adjusted gross income' means adjusted gross 
income increased by any amount excluded from gross income under section 
911, 931, or 933.''.
    (b) Clerical Amendment.--The table of sections for part I of 
subchapter A of chapter 1 of such Code, as amended by section 202, is 
amended by inserting after the item relating to section 1A the 
following new item:

``Sec. 1B. Alternative maximum tax for low-income individuals.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2024.

                  TITLE II--EARNED INCOME DISALLOWANCE

SEC. 301. EARNED INCOME DISALLOWANCE.

    (a) In General.--Notwithstanding any other provision of law, for 
purposes of determining the eligibility of a specified individual for 
benefits or assistance (or the amount or extent of benefits or 
assistance) under any means-tested Federal program, or under any means-
tested State or local program financed in whole or in part with Federal 
funds--
            (1) with respect to the 1-year period beginning on the 
        effective date described in section 401, if the earned income 
        of such individual for such 1-year period (determined without 
        regard to this section) does not exceed the product of 2,080 
        multiplied by the cost-of-living wage (as defined in section 6 
        of the Fair Labor Standards Act of 1938) for the calendar year 
        in which such 1-year period ends, the earned income of such 
        individual shall not be treated as exceeding the earned income 
        of such individual for the 1-year period ending on such 
        effective date, and
            (2) with respect to the 1-year period beginning 1 year 
        after such effective date, if the earned income of such 
        individual for such 1-year period (determined without regard to 
        this section) does not exceed the product of 2,080 multiplied 
        by the cost-of-living wage (as defined in section 6 of the Fair 
        Labor Standards Act of 1938) for the calendar year in which 
        such 1-year period ends, the earned income of such individual 
        shall not be treated as exceeding the sum of--
                    (A) the earned income of such individual for the 1-
                year period ending on such effective date, plus
                    (B) 50 percent of the excess (if any) of--
                            (i) the earned income of such individual 
                        for the 1-year period beginning 1 year after 
                        such effective date, over
                            (ii) the earned income of such individual 
                        for the 1-year period ending on such effective 
                        date.
    (b) Specified Individual.--For purposes of this section, the 
``specified individual'' means any individual if the earned income of 
such individual for the 1-year period ending on the effective date 
described in section 410 exceeds zero.

                       TITLE III--EFFECTIVE DATE

SEC. 401. EFFECTIVE DATE.

    Except as otherwise specified in this Act, this Act, and the 
amendments made by this Act, shall take effect on the 1st day of the 
3rd month that begins after the date of enactment of this Act.
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