I

103D CONGRESS

1ST SESSION H. R. 1166

To amend the Internal Revenue Code of 1986 to provide tax relief for

middle-income taxpayers by increasing the personal exemption amount

and to provide additional revenues by increasing the taxes paid by highincome individuals and corporations.

IN THE HOUSE OF REPRESENTATIVES

MARCH 2, 1993

Ms. DELAURO 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 provide

tax relief for middle-income taxpayers by increasing the

personal exemption amount and to provide additional

revenues by increasing the taxes paid by high-income

individuals and corporations.

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; AMENDMENT OF 1986 CODE.

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

5 ‘‘Middle Class Tax Relief Act of 1993’’.

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

2 to, or repeal of, a section or other provision, the reference

3 shall be considered to be made to a section or other provi4 sion of the Internal Revenue Code of 1986.

5 TITLE I—TAX RELIEF FOR

6 MIDDLE-INCOME TAXPAYERS

7 SEC. 101. INCREASE IN PERSONAL EXEMPTION AMOUNT.

8 (a) IN GENERAL.—Paragraph (1) of section 151(d)

9 (defining exemption amount) is amended to read as

10 follows:

11 ‘‘(1) IN GENERAL.—Except as otherwise pro12 vided in this subsection, the term ‘exemption

13 amount’ means the sum of—

14 ‘‘(A) a regular exemption amount equal to

15 $2,000, and

16 ‘‘(B) an additional exemption amount

17 equal to $1,000, in the case of a middle-income

18 taxpayer.’’

19 (b) PHASEOUT OF ADDITIONAL EXEMPTION

20 AMOUNT.—Subsection (d) of section 151 is amended by

21 redesignating paragraph (4) as paragraph (5), and by in22 serting after paragraph (3) the following new paragraph:

23 ‘‘(4) SPECIAL RULES RELATING TO MIDDLE-IN24 COME TAXPAYER ADDITIONAL EXEMPTION

25 AMOUNT.—
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1 ‘‘(A) DEFINITION OF MIDDLE-INCOME

2 TAXPAYER.—

3 ‘‘(i) IN GENERAL.—For purposes of

4 this subsection, the term ‘middle-income

5 taxpayer’ means a taxpayer whose adjusted

6 gross income for the taxable year does not

7 exceed the applicable maximum dollar

8 amount.

9 ‘‘(ii) APPLICABLE MAXIMUM DOLLAR

10 AMOUNT.—For purposes of this paragraph,

11 the term ‘applicable maximum dollar

12 amount’ means—

13 ‘‘(I) $102,000 in the case of a

14 joint return or a surviving spouse (as

15 defined in section 2(a)),

16 ‘‘(II) $87,300 in the case of a

17 head of household (as defined in sec18 tion 2(b)),

19 ‘‘(III) $61,000 in the case of an

20 individual who is not married and is

21 not a surviving spouse or head of

22 household, and

23 ‘‘(IV) $51,000 in the case of a

24 married individual filing a separate

25 return.
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1 ‘‘(B) PHASEOUT OF ADDITIONAL EXEMP2 TION AMOUNT.—

3 ‘‘(i) IN GENERAL.—In the case of any

4 middle-income taxpayer whose adjusted

5 gross income exceeds the applicable transi6 tion dollar amount, the additional exemp7 tion amount shall be reduced by the

8 amount determined under clause (ii).

9 ‘‘(ii) AMOUNT OF REDUCTION.—The

10 amount determined under this clause with

11 respect to the additional exemption amount

12 shall be the amount which bears the same

13 ratio to the additional exemption amount

14 as—

15 ‘‘(I) the excess of the taxpayer’s

16 adjusted gross income for the taxable

17 year over the applicable transition dol18 lar amount, bears to

19 ‘‘(II) the excess of the applicable

20 maximum dollar amount over the ap21 plicable transition dollar amount.

22 ‘‘(iii) APPLICABLE TRANSITION DOL23 LAR AMOUNT.—For purposes of this sub24 paragraph, the term ‘applicable transition

25 dollar amount’ means—
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1 ‘‘(I) $47,000 in the case of a

2 joint return or a surviving spouse (as

3 defined in section 2(a)),

4 ‘‘(II) $37,000 in the case of a

5 head of household (as defined in sec6 tion 2(b)),

7 ‘‘(III) $28,000 in the case of an

8 individual who is not married and is

9 not a surviving spouse or head of

10 household, and

11 ‘‘(IV) $23,500 in the case of a

12 married individual filing a separate

13 return.’’

14 (c) INFLATION ADJUSTMENTS.—Paragraph (5) of

15 section 151(d) (as so redesignated by subsection (b) of this

16 section) is amended by adding at the end the following

17 new subparagraph:

18 ‘‘(C) ADJUSTMENTS RELATING TO ADDI19 TIONAL EXEMPTION AMOUNT.—In the case of

20 any taxable year beginning in a calendar year

21 after 1994, the dollar amount contained in

22 paragraph (1)(B) and each dollar amount con23 tained in paragraph (4) shall be increased by

24 an amount equal to—

25 ‘‘(i) such dollar amount, multiplied by
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1 ‘‘(ii) the cost-of-living adjustment

2 under section 1(f)(3) for the calendar year

3 in which the taxable year begins, deter4 mined by substituting ‘calendar year 1993’

5 for ‘calendar year 1989’ in subparagraph

6 (B) of such section.’’

7 (d) CONFORMING AMENDMENTS.—

8 (1) Paragraph (6) of section 1(f) is amended by

9 striking ‘‘section 151(d)(4)’’ each place it appears

10 and inserting ‘‘section 151(d)(5)’’.

11 (2) Paragraph (3) of section 151(d) is amend12 ed—

13 (A) in the paragraph caption, by inserting

14 ‘‘OF REGULAR EXEMPTION AMOUNT’’ after

15 ‘‘PHASEOUT’’, and

16 (B) in subparagraph (A), by inserting

17 ‘‘regular’’ before ‘‘exemption amount’’.

18 (3) Subparagraph (A) of section 151(d)(5) (as

19 so redesignated by subsection (b) of this section) is

20 amended—

21 (A) in the matter preceding clause (i) by

22 striking ‘‘paragraph (1)’’ and inserting ‘‘para23 graph (1)(A)’’, and

24 (B) by striking ‘‘BASIC’’ in the heading

25 and inserting ‘‘REGULAR’’.
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1 (e) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to taxable years beginning after

3 December 31, 1993.

4 TITLE II—REVENUE PROVISIONS

5 SEC. 201. INCREASE IN RATE OF INDIVIDUAL INCOME TAX

6 FOR HIGH-INCOME TAXPAYERS.

7 (a) IN GENERAL.—

8 (1) MARRIED INDIVIDUALS FILING JOINT RE9 TURNS AND SURVIVING SPOUSES.—Subsection (a) of

10 section 1 (relating to tax imposed on married indi11 viduals filing joint returns and surviving spouses) is

12 amended by striking the item beginning ‘‘Over

13 $78,400’’ and inserting the following new items:

‘‘Over $78,400 but not over

$100,000.

$17,733.50, plus 31% of the excess

over $78,400.

‘‘Over $100,000 ............................. $24,429.50, plus 36% of the excess

over $100,000.’’

14 (2) HEADS OF HOUSEHOLDS.—Subsection (b)

15 of section 1 (relating to tax imposed on heads of

16 households) is amended by striking the item begin17 ning ‘‘Over $67,200’’ and inserting the following

18 new items:

‘‘Over $67,200 but not over

$85,000.

$15,429.50, plus 31% of the excess

over $67,200.

‘‘Over $85,000 ............................... $20,947.50, plus 36% of the excess

over $85,000.’’

19 (3) UNMARRIED INDIVIDUALS (OTHER THAN

20 SURVIVING SPOUSES AND HEADS OF HOUSE21 HOLDS).—Subsection (c) of section 1 (relating to tax
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1 imposed on unmarried individuals, other than surviv2 ing spouses and heads of households) is amended by

3 striking the item beginning ‘‘Over $47,050’’ and in4 serting the following new items:

‘‘Over $47,050 but not over

$70,000.

$10,645.50, plus 31% of the excess

over $47,050.

‘‘Over $70,000 ............................... $17,760, plus 36% of the excess over

$70,000.’’

5 (4) MARRIED INDIVIDUALS FILING SEPARATE

6 RETURNS.—Subsection (d) of section 1 (relating to

7 tax imposed on married individuals filing separate

8 returns) is amended by striking the item beginning

9 ‘‘Over $39,200’’ and inserting the following new

10 items:

‘‘Over $39,200 but not over

$50,000.

$8,866.75, plus 31% of the excess

over $39,200.

‘‘Over $50,000 ............................... $12,214.75, plus 36% of the excess

over $50,000.’’

11 (5) ESTATES AND TRUSTS.—Subsection (e) of

12 section 1 (relating to tax imposed on estates and

13 trusts) is amended by striking the item beginning

14 ‘‘Over $9,900’’ and inserting the following new

15 items:

‘‘Over $9,900 but not over

$12,600.

$2,343, plus 31% of the excess over

$9,900.

‘‘Over $12,600 ............................... $3,180, plus 36% of the excess over

$12,600.’’

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

17 this section shall apply to taxable years beginning after

18 December 31, 1993.
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1 SEC. 202. SURTAX ON INDIVIDUALS WITH INCOMES OVER

2 $225,000.

3 (a) GENERAL RULE.—Subchapter A of chapter 1

4 (relating to determination of tax liability) is amended by

5 adding at the end the following new part:

6 ‘‘PART VIII—SURTAX ON INDIVIDUALS WITH

7 INCOMES OVER $225,000

‘‘Sec. 59B. Surtax on section 1 tax.

‘‘Sec. 59C. Surtax on minimum tax.

‘‘Sec. 59D. Special rules.

8 ‘‘SEC. 59B. SURTAX ON SECTION 1 TAX.

9 ‘‘In the case of an individual who has taxable income

10 for the taxable year in excess of $225,000, the amount

11 of the tax imposed under section 1 for such taxable year

12 shall be increased by 15 percent of the amount which

13 bears the same ratio to the tax imposed under section 1

14 (determined without regard to this section) as—

15 ‘‘(1) the amount by which the taxable income of

16 such individual for such taxable year exceeds

17 $225,000, bears to

18 ‘‘(2) the total amount of such individual’s tax19 able income for such taxable year.

20 ‘‘SEC. 59C. SURTAX ON MINIMUM TAX.

21 ‘‘In the case of an individual who has alternative min22 imum taxable income for the taxable year in excess of

23 $225,000, the amount of the tentative minimum tax deter24 mined under section 55 for such taxable year shall be in-
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1 creased by 2.5 percent of the amount by which the alter2 native minimum taxable income of such taxpayer for the

3 taxable year exceeds $225,000.

4 ‘‘SEC. 59D. SPECIAL RULES.

5 ‘‘(a) SURTAX TO APPLY TO ESTATES AND TRUSTS.—

6 For purposes of this part, the term ‘individual’ includes

7 any estate or trust taxable under section 1.

8 ‘‘(b) TREATMENT OF MARRIED INDIVIDUALS FILING

9 SEPARATE RETURNS.—In the case of a married individual

10 (within the meaning of section 7703) filing a separate re11 turn for the taxable year, sections 59B and 59C shall be

12 applied by substituting ‘$112,500’ for ‘$225,000’.

13 ‘‘(c) COORDINATION WITH OTHER PROVISIONS.—

14 The provisions of this part shall be applied—

15 ‘‘(1) after the application of section 1(h), but

16 ‘‘(2) before the application of any other provi17 sion of this title which refers to the amount of tax

18 imposed by section 1 or 55, as the case may be.’’

19 (b) CLERICAL AMENDMENT.—The table of parts for

20 such subchapter A is amended by adding at the end the

21 following new item:

‘‘Part VIII. Surtax on individuals with incomes over $225,000.’’

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

23 this section shall apply to taxable years beginning after

24 December 31, 1993.
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1 SEC. 203. INCREASE IN RATE OF CORPORATE INCOME TAX.

2 (a) IN GENERAL.—Subparagraph (C) of section

3 11(b)(1) (relating to amount of tax) is amended by strik4 ing ‘‘34 percent’’ and inserting ‘‘36 percent’’.

5 (b) CONFORMING AMENDMENT.—Paragraph (2) of

6 section 11(b) (relating to ineligibility of personal service

7 corporations for graduated rate) is amended by striking

8 ‘‘34 percent’’ and inserting ‘‘36 percent’’.

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

10 this section shall apply to taxable years beginning after

11 December 31, 1993.

12 SEC. 204. INCREASE IN RATE OF INDIVIDUAL ALTERNATIVE

13 MINIMUM TAX.

14 (a) IN GENERAL.—Subparagraph (A) of section

15 55(b)(1) (relating to tentative minimum tax) is amended

16 by striking ‘‘24 percent’’ and inserting ‘‘27 percent’’.

17 (b) EFFECTIVE DATE.—The amendment made by

18 this section shall apply to taxable years beginning after

19 December 31, 1993.

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