II

106TH CONGRESS

1ST SESSION S. 3

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

tax rates by 10 percent.

IN THE SENATE OF THE UNITED STATES

JANUARY 19, 1999

Mr. GRAMS (for himself, Mr. ROTH, Mr. ABRAHAM, Mr. ASHCROFT, Mr.

LOTT, Mr. MCCAIN, Mrs. HUTCHISON, and Mr. COVERDELL) introduced

the following bill; which was read twice and referred to the Committee

on Finance

A BILL

To amend the Internal Revenue Code of 1986 to reduce

individual income tax rates by 10 percent.

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 ‘‘Tax Cuts for All Americans Act’’.

6 (b) SECTION 15 NOT TO APPLY.—No amendment

7 made by section 2 shall be treated as a change in a rate

8 of tax for purposes of section 15 of the Internal Revenue

9 Code of 1986.
2

•S 3 IS

1 SEC. 2. 10 PERCENT REDUCTION IN INDIVIDUAL INCOME

2 TAX RATES.

3 (a) GENERAL RULE.—Section 1 of the Internal Reve4 nue Code of 1986 (relating to tax imposed) is amended

5 by striking subsections (a) through (e) and inserting the

6 following:

7 ‘‘(a) MARRIED INDIVIDUALS FILING JOINT RETURNS

8 AND SURVIVING SPOUSES.—There is hereby imposed on

9 the taxable income of—

10 ‘‘(1) every married individual (as defined in sec11 tion 7703) who makes a single return jointly with

12 his spouse under section 6013, and

13 ‘‘(2) every surviving spouse (as defined in sec14 tion 2(a)),

15 a tax determined in accordance with the following table:

‘‘If taxable income is: The tax is:

Not over $43,050 .......................... 13.5% of taxable income.

Over $43,050 but not over

$104,050.

$5,811.75, plus 25.2% of the excess

over $43,050.

Over $104,050 but not over

$158,550.

$21,183.75, plus 27.9% of the excess

over $104,050.

Over $158,550 but not over

$283,150.

$36,389.25, plus 32.4% of the excess

over $158,550.

Over $283,150................ ............... $76,759.65, plus 35.64% of the excess over $283,150.

16 ‘‘(b) HEADS OF HOUSEHOLDS.—There is hereby im17 posed on the taxable income of every head of a household

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

19 with the following table:

‘‘If taxable income is: The tax is:

Not over $34,550 .......................... 13.5% of taxable income.
3

•S 3 IS

‘‘If taxable income is: The tax is:

Over $34,550 but not over

$89,150.

$4,664.25, plus 25.2% of the excess

over $34,550.

Over $89,150 but not over

$144,400.

$18,423.45, plus 27.9% of the excess

over $89,150.

Over $144,400 but not over

$283,150.

$33,838.20, plus 32.4% of the excess

over $144,400.

Over $283,150................ ............... $78,793.20, plus 35.64% of the excess over $283,150.

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

3 is hereby imposed on the taxable income of every individ4 ual (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 $25,750 .......................... 13.5% of taxable income.

Over $25,750 but not over

$62,450.

$3,476.25, plus 25.2% of the excess

over $25,750.

Over $62,450 but not over

$130,250.

$12,724.65, plus 27.9% of the excess

over $62,450.

Over $130,250 but not over

$283,150.

$31,640.85, plus 32.4% of the excess

over $130,250.

Over $283,150................ ............... $81,180.45, plus 35.64% of the excess over $283,150.

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:

‘‘If taxable income is: The tax is:

Not over $21,525 .......................... 13.5% of taxable income.

Over $21,525 but not over

$52,025.

$2,905.87, plus 25.2% of the excess

over $21,525.
4

•S 3 IS

‘‘If taxable income is: The tax is:

Over $52,025 but not over

$79,275.

$10,591.87, plus 27.9% of the excess

over $52,025.

Over $79,275 but not over

$141,575.

$18,194.62, plus 32.4% of the excess

over $79,275.

Over $141,575................ ............... $38,379.82, plus 35.64% of the excess over $141,575.

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

3 ‘‘(1) every estate, and

4 ‘‘(2) every trust,

5 taxable under this subsection a tax determined in accord6 ance with the following table:

‘‘If taxable income is: The tax is:

Not over $1,750 ............................ 13.5% of taxable income.

Over $1,750 but not over $4,050 .. $236.25, plus 25.2% of the excess

over $1,750.

Over $4,050 but not over $6,200 .. $815.85, plus 27.9% of the excess

over $4,050.

Over $6,200 but not over $8,450 .. $1,415.70, plus 32.4% of the excess

over $6,200.

Over $8,450................ ................... $2,144.70, plus 35.64% of the excess

over $8,450.’’

7 (b) INFLATION ADJUSTMENT CONFORMING AMEND8 MENTS.—

9 (1) Subsection (f) of section 1 of the Internal

10 Revenue Code of 1986 is amended—

11 (A) by striking ‘‘1993’’ in paragraph (1)

12 and inserting ‘‘1999’’,

13 (B) by striking ‘‘1992’’ in paragraph

14 (3)(B) and inserting ‘‘1998’’, and

15 (C) by striking paragraph (7).
5

•S 3 IS

1 (2) The following provisions of such Code are

2 each amended by striking ‘‘1992’’ and inserting

3 ‘‘1998’’ each place it appears:

4 (A) Section 25A(h).

5 (B) Section 32(j)(1)(B).

6 (C) Section 41(e)(5)(C).

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

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

9 (F) Section 68(b)(2)(B).

10 (G) Section 135(b)(2)(B)(ii).

11 (H) Section 151(d)(4).

12 (I) Section 220(g)(2).

13 (J) Section 221(g)(1)(B).

14 (K) Section 512(d)(2)(B).

15 (L) Section 513(h)(2)(C)(ii).

16 (M) Section 685(c)(3)(B).

17 (N) Section 877(a)(2).

18 (O) Section 911(b)(2)(D)(ii)(II).

19 (P) Section 2032A(a)(3)(B).

20 (Q) Section 2503(b)(2)(B).

21 (R) Section 2631(c)(1)(B).

22 (S) Section 4001(e)(1)(B).

23 (T) Section 4261(e)(4)(A)(ii).

24 (U) Section 6039F(d).

25 (V) Section 6323(i)(4)(B).
6

•S 3 IS

1 (W) Section 6601(j)(3)(B).

2 (X) Section 7430(c)(1).

3 (3) Subclause (II) of section 42(h)(6)(G)(i) of

4 such Code is amended by striking ‘‘1987’’ and in5 serting ‘‘1998’’.

6 (4) Subparagraph (B) of section 132(f)(6) of

7 such Code is amended by inserting before the period

8 ‘‘, determined by substituting ‘calendar year 1992’

9 for ‘calendar year 1998’ in subparagraph (B) there10 of’’.

11 (c) ADDITIONAL CONFORMING AMENDMENTS.—

12 (1) Section 1(g)(7)(B)(ii)(II) of the Internal

13 Revenue Code of 1986 is amended by striking ‘‘15

14 percent’’ and inserting ‘‘13.5 percent’’.

15 (2) Section 1(h) of such Code 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 ‘‘25.2 percent’’, and

19 (B) by striking paragraph (13).

20 (3) Section 531 of such Code is amended by

21 striking ‘‘39.6 percent’’ and inserting ‘‘35.64 per22 cent’’.

23 (4) Section 541 of such Code is amended by

24 striking ‘‘39.6 percent’’ and inserting ‘‘35.64 per25 cent’’.
7

•S 3 IS

1 (5) Section 3402(p)(1)(B) of such Code is

2 amended by striking ‘‘7, 15, 28, or 31 percent’’ and

3 inserting ‘‘7, 13.5, 25.2 or 27.9 percent’’.

4 (6) Section 3402(p)(2) of such Code is amend5 ed by striking ‘‘15 percent’’ and inserting ‘‘13.5 per6 cent’’.

7 (7) Section 3402(q)(1) of such Code is amend8 ed by striking ‘‘28 percent’’ and inserting ‘‘25.2 per9 cent’’.

10 (8) Section 3402(r)(3) of such Code is amended

11 by striking ‘‘31 percent’’ and inserting ‘‘27.9 per12 cent’’.

13 (9) Section 3406(a)(1) of such Code is amended

14 by striking ‘‘31 percent’’ and inserting ‘‘27.9 per15 cent’’.

16 (d) EFFECTIVE DATES.—

17 (1) IN GENERAL.—Except as provided in para18 graph (2), the amendments made by this section

19 shall apply to taxable years beginning after Decem20 ber 31, 1998.

21 (2) AMENDMENTS TO WITHHOLDING PROVI22 SIONS.—The amendments made by paragraphs (5),

23 (6), (7), (8), and (9) of subsection (c) shall apply to

24 amounts paid after December 31, 1998.

Æ