I

107TH CONGRESS

1ST SESSION H. R. 942

To amend the Internal Revenue Code of 1986 to reduce individual income

tax rates and increase the standard deduction.

IN THE HOUSE OF REPRESENTATIVES

MARCH 8, 2001

Mr. COLLINS introduced the following bill; which was referred to the

Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to reduce

individual income tax rates and increase the standard

deduction.

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

5 ‘‘Individual Income Tax Rate Reduction Act of 2001’’.

6 (b) AMENDMENT OF 1986 CODE.—Except as other7 wise expressly provided, whenever in this Act an amend8 ment or repeal is expressed in terms of an amendment

9 to, or repeal of, a section or other provision, the reference
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1 shall be considered to be made to a section or other provi2 sion of the Internal Revenue Code of 1986.

3 (c) SECTION 15 NOT TO APPLY.—No amendment

4 made by this Act shall be treated as a change in a rate

5 of tax for purposes of section 15 of such Code.

6 SEC. 2. REDUCTION IN INDIVIDUAL INCOME TAX RATES.

7 (a) RATES FOR 2001.—Section 1 (relating to tax im8 posed) is amended by striking subsections (a) through (e)

9 and inserting the following:

10 ‘‘(a) MARRIED INDIVIDUALS FILING JOINT RETURNS

11 AND SURVIVING SPOUSES.—There is hereby imposed on

12 the taxable income of every married individual (as defined

13 in section 7703) who makes a single return jointly with

14 his spouse under section 6013, and every surviving spouse

15 (as defined in section 2(a)), a tax determined in accord16 ance with the following table:

‘‘If taxable income is: The tax is:

Not over $45,200 .......................... 12% of taxable income.

Over $45,200 but not over

$109,250.

$5,424, plus 25% of the excess over

$45,200

Over $109,250 but not over

$166,500.

$21,436.50, plus 28% of the excess

over $109,250

Over $166,500 but not over

$297,350.

$37,466.50, plus 35.5% of the excess

over $166,500

Over $297,350................ ............... $83,918.25, plus 38.2% of the excess

over $297,350

17 ‘‘(b) HEADS OF HOUSEHOLDS.—There is hereby im18 posed on the taxable income of every head of a household

19 (as defined in section 2(b)) a tax determined in accordance

20 with the following table:
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‘‘If taxable income is: The tax is:

Not over $36,250 .......................... 12% of taxable income.

Over $36,250 but not over

$93,650.

$4,350, plus 25% of the excess over

$36,250

Over $93,650 but not over

$151,650.

$18,700, plus 28% of the excess over

$93,650

Over $151,650 but not over

$297,350.

$34,940, plus 35.5% of the excess

over $151,650

Over $297,350................ ............... $86,663.50, plus 38.2% of the excess

over $297,350

1 ‘‘(c) UNMARRIED INDIVIDUALS (OTHER THAN SUR2 VIVING SPOUSES AND HEADS OF HOUSEHOLDS).—There

3 is hereby imposed on the taxable income of every indi4 vidual (other than a surviving spouse as defined in section

5 2(a) or the head of a household as defined in section 2(b))

6 who is not a married individual (as defined in section

7 7703) a tax determined in accordance with the following

8 table:

‘‘If taxable income is: The tax is:

Not over $27,050 .......................... 12% of taxable income.

Over $27,050 but not over

$65,550.

$3,246, plus 25% of the excess over

$27,050

Over $65,550 but not over

$136,750.

$12,871, plus 28% of the excess over

$65,550

Over $136,750 but not over

$297,350.

$32,807, plus 35.5% of the excess

over $136,750

Over $297,350................ ............... $89,820, plus 38.2% of the excess

over $297,350

9 ‘‘(d) MARRIED INDIVIDUALS FILING SEPARATE RE10 TURNS.—There is hereby imposed on the taxable income

11 of every married individual (as defined in section 7703)

12 who does not make a single return jointly with his spouse

13 under section 6013, a tax determined in accordance with

14 the following table:
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‘‘If taxable income is: The tax is:

Not over $22,600 .......................... 12% of taxable income.

Over $22,600 but not over

$54,625.

$2,712, plus 25% of the excess over

$22,600

Over $54,625 but not over

$83,250.

$10,718.25, plus 28% of the excess

over $54,625

Over $83,250 but not over

$148,675.

$18,733.25, plus 35.5% of the excess

over $83,250

Over $148,675................ ............... $41,959.12, plus 38.2% of the excess

over $148,675

1 ‘‘(e) ESTATES AND TRUSTS.—There is hereby im2 posed on the taxable income of every estate, and every

3 trust, taxable under this subsection a tax determined in

4 accordance with the following table:

‘‘If taxable income is: The tax is:

Not over $1,800 ............................ 12% of taxable income.

Over $1,800 but not over $4,250 .. $216, plus 25% of the excess over

$1,800

Over $4,250 but not over $6,500 .. $828.50, plus 28% of the excess over

$4,250

Over $6,500 but not over $8,900 .. $1,458.50, plus 35.5% of the excess

over $6,500

Over $8,900................ ................... $2,310.50, plus 38.2% of the excess

over $8,900’’

5 (b) RATE REDUCTIONS AFTER 2001.—Section 1 is

6 amended by adding at the end the following new sub7 section:

8 ‘‘(i) RATE REDUCTIONS AFTER 2001.—

9 ‘‘(1) IN GENERAL.—In the case of taxable years

10 beginning in a calendar year after 2001, the cor11 responding percentage specified for such calendar

12 year in the following table shall be substituted for

13 the otherwise applicable tax rate.
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In the case of taxable years

beginning during calendar year:

The corresponding percentages shall

be substituted for the following percentages:

35.5% 38.2%

2002 ........................................................................ 35.0% 37.0%

2003 ........................................................................ 34.5% 35.8%

2004 ........................................................................ 34.0% 34.6%

2005 ........................................................................ 33.5% 33.5%

2006 and thereafter ............................................... 33.0% 33.0%

1 ‘‘(2) ADJUSTMENT OF TABLES.—The Secretary

2 shall adjust the tables prescribed under subsection

3 (f) to carry out the reductions under this sub4 section.’’

5 (c) INFLATION ADJUSTMENT TO APPLY AFTER

6 2001.—Subsection (f) of section 1 is amended—

7 (1) by striking ‘‘1993’’ in paragraph (1) and in8 serting ‘‘2001’’, and

9 (2) by striking ‘‘1992’’ in paragraph (3)(B) and

10 inserting ‘‘2000’’.

11 (d) CONFORMING AMENDMENTS.—

12 (1) The following provisions are each amended

13 by striking ‘‘1992’’ and inserting ‘‘2000’’ each place

14 it appears:

15 (A) Section 32(j)(1)(B).

16 (B) Section 41(e)(5)(C).

17 (C) Section 42(h)(3)(H)(i)(II).

18 (D) Section 59(j)(2)(B).

19 (E) Section 63(c)(4)(B).

20 (F) Section 68(b)(2)(B).
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1 (G) Section 132(f)(6)(A)(ii).

2 (H) Section 135(b)(2)(B)(ii).

3 (I) Section 146(d)(2)(B).

4 (J) Section 151(d)(4).

5 (K) Section 220(g)(2).

6 (L) Section 221(g)(1)(B).

7 (M) Section 512(d)(2)(B).

8 (N) Section 513(h)(2)(C)(ii).

9 (O) Section 685(c)(3)(B).

10 (P) Section 877(a)(2).

11 (Q) Section 911(b)(2)(D)(ii)(II).

12 (R) Section 2032A(a)(3)(B).

13 (S) Section 2503(b)(2)(B).

14 (T) Section 2631(c)(2).

15 (U) Section 4001(e)(1)(B).

16 (V) Section 4261(e)(4)(A)(ii).

17 (W) Section 6039F(d).

18 (X) Section 6323(i)(4)(B).

19 (Y) Section 6334(g)(1)(B).

20 (Z) Section 6601(j)(3)(B).

21 (AA) Section 7430(c)(1).

22 (2) Sections 25A(h)(1)(A)(ii) and

23 25A(h)(2)(A)(ii) are each amended by striking ‘‘be24 gins,’’ and all that follows through ‘‘thereof’’.
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1 (3) Subclause (II) of section 42(h)(6)(G)(i) is

2 amended by striking ‘‘1987’’ and inserting ‘‘2000’’.

3 (e) ADDITIONAL CONFORMING AMENDMENTS.—

4 (1) Subparagraph (B) of section 1(g)(7) is

5 amended—

6 (A) by striking ‘‘15 percent’’ in clause

7 (ii)(II) and inserting ‘‘the first bracket percent8 age’’, and

9 (B) by adding at the end the following

10 flush sentence:

11 ‘‘For purposes of clause (ii), the first bracket

12 percentage is the percentage applicable to the

13 lowest income bracket in the table under sub14 section (c).’’

15 (2) Section 1(h) is amended—

16 (A) by striking ‘‘28 percent’’ both places it

17 appears in paragraphs (1)(A)(ii)(I) and

18 (1)(B)(i) and inserting ‘‘25 percent’’, and

19 (B) by striking paragraph (13).

20 (3) Section 15 is amended by adding at the end

21 the following new subsection:

22 ‘‘(f) RATE REDUCTIONS ENACTED BY INDIVIDUAL

23 INCOME TAX RATE REDUCTION ACT OF 2001.—This sec24 tion shall not apply to any change in rates under sub-
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1 section (i) of section 1 (relating to rate reductions after

2 2000).’’

3 (4) Section 531 is amended by striking ‘‘equal

4 to’’ and all that follows and inserting ‘‘equal to the

5 product of the highest rate of tax under section 1(c)

6 and the accumulated taxable income.’’.

7 (5) Section 541 of such Code is amended by

8 striking ‘‘equal to’’ and all that follows and inserting

9 ‘‘equal to the product of the highest rate of tax

10 under section 1(c) and the undistributed personal

11 holding company income.’’.

12 (6) Section 3402(p)(1)(B) is amended by strik13 ing ‘‘7, 15, 28, or 31 percent’’ and inserting ‘‘7 per14 cent, any percentage applicable to any of the 3 low15 est income brackets in the table under section

16 1(c),’’.

17 (7) Section 3402(p)(2) is amended by striking

18 ‘‘equal to 15 percent of such payment’’ and inserting

19 ‘‘equal to the product of the lowest rate of tax under

20 section 1(c) and such payment’’.

21 (8) Section 3402(q)(1) is amended by striking

22 ‘‘equal to 28 percent of such payment’’ and inserting

23 ‘‘equal to the product of the third to the lowest rate

24 of tax under section 1(c) and such payment’’.
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1 (9) Section 3402(r)(3) is amended by striking

2 ‘‘31 percent’’ and inserting ‘‘the third to the lowest

3 rate of tax under section 1(c)’’.

4 (10) Section 3406(a)(1) is amended by striking

5 ‘‘equal to 31 percent of such payment’’ and inserting

6 ‘‘equal to the product of the third to the lowest rate

7 of tax under section 1(c) and such payment’’.

8 (11) Section 13273 of the Revenue Reconcili9 ation Act of 1993 is amended by striking ‘‘28 per10 cent’’ and inserting ‘‘the third to the lowest rate of

11 tax under section 1(c) of the Internal Revenue Code

12 of 1986’’.

13 (f) EFFECTIVE DATES.—

14 (1) IN GENERAL.—Except as provided in para15 graph (2), the amendments made by this section

16 shall apply to taxable years beginning after Decem17 ber 31, 2000.

18 (2) AMENDMENTS TO WITHHOLDING PROVI19 SIONS.—The amendments made by paragraphs (6),

20 (7), (8), (9), (10), and (11) of subsection (e) shall

21 apply to amounts paid after the date of the enact22 ment of this Act.
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1 SEC. 3. INCREASE IN STANDARD DEDUCTION.

2 (a) IN GENERAL.—Paragraph (2) of section 63(c)

3 (relating to standard deduction) is amended to read as fol4 lows:

5 ‘‘(2) BASIC STANDARD DEDUCTION.—For pur6 poses of paragraph (1), the basic standard deduction

7 is—

8 ‘‘(A) twice the dollar amount in effect

9 under subparagraph (C) for the taxable year in

10 the case of—

11 ‘‘(i) a joint return, or

12 ‘‘(ii) a surviving spouse (as defined in

13 section 2(a)),

14 ‘‘(B) $8,500 in the case of a head of

15 household (as defined in section 2(b)), or

16 ‘‘(C) $6,000 in any other case.’’

17 (c) TECHNICAL AMENDMENTS.—

18 (1) Paragraph (4) of section 63(c) is amended

19 to read as follows:

20 ‘‘(4) ADJUSTMENTS FOR INFLATION.—

21 ‘‘(A) IN GENERAL.—In the case of any

22 taxable year beginning in a calendar year after

23 1988, each dollar amount contained in para24 graph (2) or (5) or subsection (f) shall be in25 creased by an amount equal to—

26 ‘‘(i) such dollar amount, multiplied by
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1 ‘‘(ii) the cost-of-living adjustment de2 termined under section 1(f)(3) for the cal3 endar year in which the taxable year be4 gins.

5 The preceding sentence shall not apply to the

6 amount referred to in paragraph (2)(A).

7 ‘‘(B) BASE PERIOD ADJUSTMENTS.—In de8 termining the adjustment under subparagraph

9 (A), section 1(f)(3) shall be applied by sub10 stituting for ‘calendar year 1992’ in subpara11 graph (B) thereof—

12 ‘‘(i) ‘calendar year 1987’ in the case

13 of the dollar amount contained in para14 graph (5)(A) or subsection (f),

15 ‘‘(ii) ‘calendar year 1997’ in the case

16 of the dollar amount contained in para17 graph (5)(B)’’, and

18 ‘‘(iii) ‘calendar year 2000’ in the case

19 of the dollar amounts contained in para20 graph (2).’’

21 (2) Subparagraph (B) of section 1(f)(6) is

22 amended by striking ‘‘subsection (c)(4) of section 63

23 (as it applies to subsections (c)(5)(A) and (f) of such

24 section)’’ and inserting ‘‘section 63(c)(4)’’.
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1 (d) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to taxable years beginning after

3 December 31, 2000.

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