I

103D CONGRESS

2D SESSION H. R. 4131

To amend the Internal Revenue Code of 1986 to make the income tax

more equitable for families.

IN THE HOUSE OF REPRESENTATIVES

MARCH 24, 1994

Mr. DARDEN 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 make

the income tax more equitable for families.

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 ‘‘Family Unity Pro5 motion Act of 1994’’.

6 SEC. 2. COMBINED RETURN TO WHICH UNMARRIED RATES

7 APPLY.

8 (a) IN GENERAL.—Subpart B of part II of sub9 chapter A of chapter 61 of the Internal Revenue Code of
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1 1986 (relating to income tax returns) is amended by in2 serting after section 6013 the following new section:

3 ‘‘SEC. 6013A. COMBINED RETURN WITH SEPARATE RATES.

4 ‘‘(a) GENERAL RULE.—A husband and wife may

5 make a combined return of income taxes under subtitle

6 A under which—

7 ‘‘(1) a separate taxable income is determined

8 for each spouse by applying the rules provided in

9 this section, and

10 ‘‘(2) the tax imposed by section 1 is the aggre11 gate amount resulting from applying the separate

12 rate set forth in section 1(c) to each such taxable

13 income.

14 ‘‘(b) TREATMENT OF INCOME.—For purposes of this

15 section—

16 ‘‘(1) earned income (within the meaning of sec17 tion 911(d)), and any income received as a pension

18 or annuity which arises from an employer-employee

19 relationship, shall be treated as the income of the

20 spouse who rendered the services, and

21 ‘‘(2) income from property shall be divided be22 tween the spouses in accordance with their respec23 tive ownership rights in such property.

24 ‘‘(c) TREATMENT OF DEDUCTIONS.—For purposes of

25 this section—
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1 ‘‘(1) the deductions allowed by section 62(a)

2 (other than paragraphs (7) and (10) thereof) shall

3 be allowed to the spouse treated as having the in4 come to which such deductions relate,

5 ‘‘(2) the deduction for retirement savings de6 scribed in paragraph (7) of section 62(a) shall be al7 lowed to the spouse for whose benefit the savings are

8 maintained,

9 ‘‘(3) the deduction for alimony described in

10 paragraph (10) of section 62(a) shall be allowed to

11 the spouse who has the liability to pay the alimony,

12 ‘‘(4) the deductions allowable by section 151

13 (relating to personal exemptions) shall be deter14 mined—

15 ‘‘(A) by requiring each spouse to claim 1

16 personal exemption, and

17 ‘‘(B) by allowing the personal exemptions

18 under section 151(c) to be allocated between

19 the spouses as they determine,

20 ‘‘(5) by requiring each spouse to claim their

21 own additional standard deduction (if any) under

22 section 63, and

23 ‘‘(6) the aggregate amount of all other deduc24 tions shall be allocated between the spouses in such

25 amounts as they determine.
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1 ‘‘(d) TREATMENT OF CREDITS.—Credits shall be de2 termined (and applied against the joint liability of the cou3 ple for tax) as if the spouses had filed a joint return.

4 ‘‘(e) TREATMENT AS JOINT RETURN.—Except as

5 otherwise provided in this section or in the regulations

6 prescribed hereunder, for purposes of this title (other than

7 sections 1 and 63(c)) a combined return under this section

8 shall be treated as a joint return.

9 ‘‘(f) REGULATIONS.—The Secretary shall prescribe

10 such regulations as may be necessary or appropriate to

11 carry out this section.’’

12 (b) UNMARRIED RATE MADE APPLICABLE.—So

13 much of subsection (c) of section 1 of such Code as pre14 cedes the table is amended to read as follows:

15 ‘‘(c) SEPARATE OR UNMARRIED RETURN RATE.—

16 There is hereby imposed on the taxable income of every

17 individual (other than a married individual (as defined in

18 section 7703) filing a joint return or a separate return,

19 a surviving spouse as defined in section 2(a), or a head

20 of household as defined in section 2(b)) a tax determined

21 in accordance with the following table:’’.

22 (c) BASIC STANDARD DEDUCTION FOR UNMARRIED

23 INDIVIDUALS MADE APPLICABLE.—Subparagraph (C) of

24 section 63(c)(2) of such Code is amended to read as fol25 lows:
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1 ‘‘(C) $3,000 in the case of an individual

2 who is not—

3 ‘‘(i) a married individual filing a joint

4 return or a separate return,

5 ‘‘(ii) a surviving spouse, or

6 ‘‘(iii) a head of household, or’’.

7 (d) CLERICAL AMENDMENT.—The table of sections

8 for subpart B of part II of subchapter A of chapter 61

9 of such Code is amended by inserting after the item relat10 ing to section 6013 the following:

‘‘Sec. 6013A. Combined return with separate rates.’’

11 (e) EFFECTIVE DATE.—The amendments made by

12 this section shall apply to taxable years beginning after

13 December 31, 1994.

14 SEC. 3. HOMEMAKERS ELIGIBLE FOR FULL IRA DEDUC15 TION.

16 (a) SPOUSAL IRA COMPUTED ON BASIS OF COM17 PENSATION OF BOTH SPOUSES.—Subsection (c) of section

18 219 of the Internal Revenue Code of 1986 (relating to

19 special rules for certain married individuals) is amended

20 to read as follows:

21 ‘‘(c) SPECIAL RULES FOR CERTAIN MARRIED INDI22 VIDUALS.—

23 ‘‘(1) IN GENERAL.—In the case of an individual

24 to whom this paragraph applies for the taxable year,
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1 the limitation of paragraph (1) of subsection (b)

2 shall be equal to the lesser of—

3 ‘‘(A) $2,000, or

4 ‘‘(B) the sum of—

5 ‘‘(i) the compensation includible in

6 such individual’s gross income for the tax7 able year, plus

8 ‘‘(ii) the compensation includible in

9 the gross income of such individual’s

10 spouse for the taxable year reduced by the

11 amount allowable as a deduction under

12 subsection (a) to such spouse for such tax13 able year.

14 ‘‘(2) INDIVIDUALS TO WHOM PARAGRAPH (1)

15 APPLIES.—Paragraph (1) shall apply to any individ16 ual if—

17 ‘‘(A) such individual files a joint return for

18 the taxable year, and

19 ‘‘(B) the amount of compensation (if any)

20 includible in such individual’s gross income for

21 the taxable year is less than the compensation

22 includible in the gross income of such individ23 ual’s spouse for the taxable year.’’
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1 (b) IRA ALLOWED FOR SPOUSES WHO ARE NOT AC2 TIVE PLAN PARTICIPANTS.—Section 219(g)(1) of such

3 Code is amended by striking ‘‘or the individual’s spouse’’.

4 (c) CONFORMING AMENDMENTS.—

5 (1) Paragraph (2) of section 219(f) of such

6 Code (relating to other definitions and special rules)

7 is amended by striking ‘‘subsections (b) and (c)’’

8 and inserting ‘‘subsection (b)’’.

9 (2) Section 408(d)(5) of such Code is amended

10 by striking ‘‘$2,250’’ and inserting ‘‘$2,000’’.

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

12 this section shall apply to taxable years beginning after

13 December 31, 1994.

14 SEC. 4. INCREASE IN PERSONAL EXEMPTION FOR CERTAIN

15 DEPENDENT CHILDREN.

16 (a) GENERAL RULE.—Paragraph (1) of section

17 151(d) of the Internal Revenue Code of 1986 (defining

18 exemption amount) is amended to read as follows:

19 ‘‘(1) IN GENERAL.—Except as otherwise pro20 vided in this subsection, the term ‘exemption

21 amount’ means $2,000 (or, in the case of an exemp22 tion under subsection (c) for a child who has not at23 tained age 18 before the close of the calendar year

24 in which the taxable year begins, $3,500).’’

25 (b) CONFORMING AMENDMENTS.—
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1 (1) Subparagraph (A) of section 151(d)(3) of

2 such Code is amended by striking ‘‘the exemption

3 amount’’ and inserting ‘‘each dollar amount in effect

4 under paragraph (1) (after any adjustment under

5 paragraph (4))’’.

6 (2) Subparagraph (A) of section 151(d)(4) of

7 such Code is amended—

8 (A) by striking ‘‘the dollar amount’’ and

9 inserting ‘‘each dollar amount’’, and

10 (B) by adding at the end thereof the fol11 lowing new sentence: ‘‘In the case of the $3,500

12 amount contained in paragraph (1), the preced13 ing sentence shall be applied by substituting

14 ‘1995’ for ‘1989’ the first place it appears, and

15 by substituting ‘1994’ for ‘1988’.’’

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

17 this section shall apply to taxable years beginning after

18 December 31, 1994.

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