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104TH CONGRESS

1ST SESSION H. R. 2083

To provide for a tax reduction in the case of low economic growth.

IN THE HOUSE OF REPRESENTATIVES

JULY 20, 1995

Mr. OBEY (for himself, Mr. HINCHEY, Mr. BRYANT of Texas, and Ms.

PELOSI) introduced the following bill; which was referred to the Committee on Ways and Means

A BILL

To provide for a tax reduction in the case of low economic

growth.

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.

4 This Act may be cited as the ‘‘Tax Reduction and

5 Economic Growth Act of 1995’’.

6 SEC. 2. TAX REDUCTION IN THE EVENT OF LOW GROWTH.

7 (a) LOW-GROWTH REPORT.—

8 (1) IN GENERAL.—At any time, the Director of

9 the Office of Management and Budget (hereafter in

10 this section referred to as the ‘‘Director’’) shall no-
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1 tify the President and the Congress if the Director

2 has determined that for any of the periods described

3 in paragraph (2)—

4 (A) economic growth as measured by the

5 change in real Gross Domestic Product (GDP)

6 at an annual rate is estimated to be less than

7 1.5 percent, and

8 (B) the rate of national unemployment

9 (seasonally adjusted) is estimated to be greater

10 than 6.5 percent.

11 (2) TESTING PERIODS.—For purposes of para12 graph (1), the periods described in this paragraph

13 are—

14 (A) the period consisting of the quarter

15 during which the notification is given and the

16 quarter preceding such notification,

17 (B) the period consisting of the preceding

18 4 quarters, and

19 (C) the period consisting of the 2 quarters

20 following such notification.

21 (b) PRESIDENTIAL AUTHORIZATION OF TEMPORARY

22 TAX REDUCTIONS.—

23 (1) PRESIDENTIAL DECLARATION.—After noti24 fication under subsection (a), the President may

25 issue a declaration that temporary income tax reduc-
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1 tions are required for a specified calendar year to

2 provide a quick and necessary fiscal stimulus to the

3 economy. Any such declaration shall be transmitted

4 to the Congress.

5 (2) TEMPORARY TAX MODIFICATIONS.—If the

6 President transmits a declaration under paragraph

7 (1) to the Congress—

8 (A) TEMPORARY TAX REDUCTIONS.—

9 (i) IN GENERAL.—Effective for tax10 able years beginning in the calendar year

11 specified in such declaration—

12 (I) the rates applicable to the

13 first income bracket in the tax tables

14 contained in section 1 of the Internal

15 Revenue Code of 1986 shall be re16 duced by a percentage (not to exceed

17 3 percent) specified in such declara18 tion, and

19 (II) the amounts set fourth as

20 tax in such tables shall be adjusted to

21 reflect such rate reduction.

22 (ii) WITHHOLDING ADJUSTMENTS.—

23 The withholding tables or procedures pre24 scribed by the Secretary of the Treasury or

25 his delegate under section 3402(a) of such
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1 Code shall be modified so that, to the max2 imum extent possible, the full calendar

3 year effect of such reduction is reflected

4 through withholding reductions during the

5 portion of the calendar year after such dec6 laration.

7 (B) TEMPORARY SURTAX WHERE ECO8 NOMIC GROWTH REQUIREMENTS SUBSE9 QUENTLY SATISFIED.—

10 (i) IN GENERAL.—Effective for tax11 able years beginning in the first subse12 quent calendar year for which the eco13 nomic growth requirements of paragraph

14 (3) are satisfied—

15 (I) each rate of tax in the tax ta16 bles contained in section 1 of the In17 ternal Revenue Code of 1986 shall be

18 increased by the percentage deter19 mined under paragraph (4) for such

20 year, except the tax rate for individ21 uals with Adjusted Gross Income of

22 less than $50,000 and taxpayers filing

23 jointly with Adjusted Gross Income of

24 less than $75,000 shall not exceed the
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1 rates established in the year prior to

2 the temporary tax reduction, and

3 (II) the amounts set forth as tax

4 in such tables shall be adjusted to re5 flect such rate increases.

6 (ii) WITHHOLDING ADJUSTMENTS.—

7 Effective for such subsequent calendar

8 year, the withholding tables or procedures

9 prescribed by the Secretary of the Treas10 ury or his delegate under section 3402(a)

11 of such Code shall be modified to reflect

12 the increase in tax rates under clause (i).

13 (3) ECONOMIC GROWTH REQUIREMENTS.—The

14 economic growth requirements of this paragraph are

15 satisfied for any calendar year if, before the begin16 ning of such calendar year, the President determines

17 (and publishes such determination in the Federal

18 Register) that for such calendar year and the imme19 diately preceding calendar year—

20 (A) economic growth as measured by the

21 change in the real Gross Domestic Product

22 (GDP) is estimated to be greater than 4.5 per23 cent, and
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1 (B) the rate of national unemployment

2 (seasonally adjusted) is estimated to be less

3 than 5.5 percent.

4 (4) RATE INCREASE PERCENTAGE.—The per5 centage determined under this paragraph is the per6 centage increase in the tax rates contained in section

7 1 of the Internal Revenue Code of 1986 which the

8 President estimates will result in an aggregate in9 crease in receipts under chapter 1 of such Code

10 equal to the aggregate decrease in receipts under

11 such Code by reason of subparagraph (A) of para12 graph (2) without increasing the tax rate for individ13 uals with Adjusted Gross Income of less than

14 $50,000 and taxpayers filing jointly with Adjusted

15 Gross Income of less than $75,000 above the rates

16 established in the year prior to the temporary tax re17 duction. Such percentage shall be published in the

18 Federal Register before the beginning of the cal19 endar year for which the economic requirements of

20 paragraph (2) are satisfied.

21 SEC. 3. TREATMENT UNDER PAY-AS-YOU-GO PROCEDURES.

22 Any reduction or increase in receipts resulting from

23 section 2 of this Act shall not be considered for any pur-
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1 pose under the Balanced Budget and Emergency Deficit

2 Control Act of 1985.

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