I 

109TH CONGRESS 

2D SESSION H. R. 5473 

To repeal the increase in tax on unearned income of minor children enacted 

by the Tax Increase Prevention and Reconciliation Act of 2005. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 24, 2006 

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

Committee on Ways and Means 

A BILL 

To repeal the increase in tax on unearned income of minor 

children enacted by the Tax Increase Prevention and 

Reconciliation Act of 2005. 

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 ‘‘Student Savings Act 

5 of 2006’’. 

6 SEC. 2. REPEAL OF TAX INCREASE ON UNEARNED INCOME 

7 OF MINOR CHILDREN. 

8 Section 510 of the Tax Increase Prevention and Rec9 onciliation Act of 2005 (Public Law 109–222), and the 

10 amendments made by such section, is hereby repealed. 


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1 The Internal Revenue Code of 1986 shall be applied and 

2 administered as if such section and amendments had never 

3 been enacted. 

4 SEC. 3. IMPOSITION OF INDIVIDUAL INCOME TAX SUR5 CHARGE. 

6 (a) IMPOSITION OF TAX.—Section 1 of the Internal 

7 Revenue Code of 1986 (relating to imposition of tax on 

8 individuals) is amended by adding at the end the following 

9 new subsection: 

10 ‘‘(j) ADDITIONAL INCOME TAX.— 

11 ‘‘(1) IN GENERAL.—If the adjusted gross in12 come of the taxpayer exceeds the threshold amount, 

13 the tax imposed by this section (determined without 

14 regard to this subsection) shall be increased by an 

15 amount equal to the applicable percentage of so 

16 much of the adjusted gross income as exceeds the 

17 threshold amount. 

18 ‘‘(2) THRESHOLD AMOUNTS.—For purposes of 

19 paragraph (1), the term ‘threshold amount’ means 

20 $1,000,000. 

21 ‘‘(3) APPLICABLE PERCENTAGE.—For purposes 

22 of paragraph (1), the applicable percentage for a 

23 taxable year shall be the percentage which the Sec24 retary shall determine will (after the application of 

25 paragraph (1)) result in an increase in revenues to 


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1 the Treasury for the taxable year in an amount 

2 equal to the decrease in such revenues by reason of 

3 the enactment of section 2 of the Student Savings 

4 Act of 2006. 

5 ‘‘(4) TAX NOT TO APPLY TO ESTATES AND

6 TRUSTS.—This subsection shall not apply to an es7 tate or trust.’’. 

8 (b) COORDINATION WITH MINIMUM TAX.—Section 

9 55(c) of such Code (defining regular tax) is amended by 

10 redesignating paragraph (3) as paragraph (4) and by in11 serting after paragraph (2) the following new paragraph: 

12 ‘‘(3) COORDINATION WITH MINIMUM TAX.— 

13 Solely for purposes of this section, section 1(j) shall 

14 not apply in computing the regular tax.’’. 

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

16 this section shall apply to taxable years beginning after 

17 December 31, 2005. 

18 (d) SECTION 15 NOT TO APPLY.—The amendments 

19 made by this section shall not be treated as a change in 

20 a rate of tax for purposes of section 15 of the Internal 

21 Revenue Code of 1986. 

Æ 


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