I 

109TH CONGRESS 

2D SESSION H. R. 5601 

To amend the Internal Revenue Code of 1986 to strengthen the earned 

income tax credit. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 13, 2006 

Mr. PASCRELL (for himself, Mr. DOYLE, Mr. CLEAVER, Ms. NORTON, Mr. 

PAYNE, and Mr. WYNN) 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 strengthen 

the earned income tax credit. 

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 ‘‘Strengthen the Earned 

5 Income Tax Credit Act of 2006’’. 

6 SEC. 2. STRENGTHEN THE EARNED INCOME TAX CREDIT. 

7 (a) REDUCTION IN MARRIAGE PENALTY.— 

8 (1) IN GENERAL.—Section 32(b)(2)(B) of the 

9 Internal Revenue Code of 1986 (relating to joint reVerDate Aug 31 2005 01:14 Jun 16, 2006 Jkt 049200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H5601.IH H5601

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1 turns) is amended by striking clauses (ii) and (iii) 

2 and inserting the following new clauses: 

3 ‘‘(ii) $2,000 in the case of taxable 

4 years beginning in 2005, 

5 ‘‘(iii) $3,000 in the case of taxable 

6 years beginning in 2006, 

7 ‘‘(iv) $3,500 in the case of taxable 

8 years beginning in 2007, 

9 ‘‘(v) $4,000 in the case of taxable 

10 years beginning in 2008, 

11 ‘‘(vi) $4,500 in the case of taxable 

12 years beginning in 2009, and 

13 ‘‘(vii) $5,000 in the case of taxable 

14 years beginning after 2009.’’. 

15 (2) INFLATION ADJUSTMENT.—Section 

16 32(j)(1)(B)(ii) of such Code is amended— 

17 (A) by striking ‘‘$3,000’’ and inserting 

18 ‘‘$5,000’’, and 

19 (B) by striking ‘‘2007’’ and inserting 

20 ‘‘2009’’. 

21 (3) PROVISIONS NOT SUBJECT TO SUNSET.— 

22 Title IX of the Economic Growth and Tax Relief 

23 Reconciliation Act of 2001 (relating to sunset provi24 sions of such Act) shall not apply to section 303(a) 

25 of such Act. 


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1 (b) INCREASE IN CREDIT PERCENTAGE FOR FAMI2 LIES WITH 3 OR MORE CHILDREN.—The table contained 

3 in section 32(b)(1)(A) of such Code (relating to percent4 ages) is amended— 

5 (1) by striking ‘‘2 or more qualifying children’’ 

6 in the second row and inserting ‘‘2 qualifying chil7 dren’’, and(2) by inserting after the second row the 

8 following new item: 

‘‘3 or more qualifying children ..................... 45 ......................................... 21.06’’. 

9 (c) REDUCTION IN PHASEOUT OF CREDIT FOR INDI10 VIDUALS WITH NO CHILDREN.—The table contained in 

11 section 32(b)(1)(A) of such Code is amended by striking 

12 ‘‘7.65’’ in the third column of the third row and inserting 

13 ‘‘3.82’’. 

14 (d) PERMANENT EXTENSION OF SPECIAL RULE

15 TREATING COMBAT PAY AS EARNED INCOME.— 

16 (1) IN GENERAL.—Clause (vi) of section 

17 32(c)(2)(B) of such Code (relating to earned in18 come) is amended to read as follows: 

19 ‘‘(vi) a taxpayer may elect to treat 

20 amounts excluded from gross income by 

21 reason of section 112 as earned income.’’. 

22 (2) PROVISION NOT SUBJECT TO SUNSET.— 

23 Section 105 of the Working Families Tax Relief Act 

24 of 2004 (relating to application of EGTRRA sunset 


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1 to this title) shall not apply to section 104(b) of 

2 such Act. 

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

4 this section shall apply to taxable years beginning after 

5 December 31, 2006. 

6 SEC. 3. IMPOSITION OF INDIVIDUAL INCOME TAX SUR7 CHARGE. 

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

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

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

11 new subsection: 

12 ‘‘(j) ADDITIONAL INCOME TAX.— 

13 ‘‘(1) IN GENERAL.—If the adjusted gross in14 come of the taxpayer exceeds the threshold amount, 

15 the tax imposed by this section (determined without 

16 regard to this subsection) shall be increased by an 

17 amount equal to 0.5 percent of so much of the ad18 justed gross income as exceeds the threshold 

19 amount. 

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

21 this subsection, the term ‘threshold amount’ means 

22 $1,000,000. 

23 ‘‘(3) TAX NOT TO APPLY TO ESTATES AND

24 TRUSTS.—This subsection shall not apply to an es25 tate or trust.’’. 


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1 (b) COORDINATION WITH MINIMUM TAX.—Section 

2 55(c) of such Code (defining regular tax) is amended by 

3 redesignating paragraph (3) as paragraph (4) and by in4 serting after paragraph (2) the following new paragraph: 

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

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

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

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

9 this section shall apply to taxable years beginning after 

10 December 31, 2006. 

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

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

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

14 Revenue Code of 1986. 

Æ 


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