II

105TH CONGRESS

2D SESSION S. 1569

To amend the Internal Revenue Code of 1986 to raise the 15 percent

income tax bracket into middle class income levels, and for other purposes.

IN THE SENATE OF THE UNITED STATES

JANUARY 27, 1998

Mr. COVERDELL (for himself and Mr. MCCAIN) 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 raise the

15 percent income tax bracket into middle class income

levels, and for other purposes.

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 1998’’.

6 (b) AMENDMENT OF 1986 CODE.—Except as other7 wise expressly provided, whenever in this Act an amend8 ment or repeal is expressed in terms of an amendment

9 to, or repeal of, a section or other provision, the reference
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•S 1569 IS

1 shall be considered to be made to a section or other provi2 sion of the Internal Revenue Code of 1986.

3 (c) SECTION 15 NOT TO APPLY.—No amendment

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

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

6 Code of 1986.

7 SEC. 2. INCOME TAXED AT LOWEST RATE INCREASED TO

8 $35,000 FOR UNMARRIED INDIVIDUALS,

9 $70,000 FOR JOINT RETURNS AND SURVIVING

10 SPOUSES, AND $52,600 FOR HEADS OF HOUSE11 HOLDS.

12 (a) GENERAL RULE.—Section 1 (relating to tax im13 posed) is amended by striking subsections (a) through (e)

14 and inserting the following:

15 ‘‘(a) MARRIED INDIVIDUALS FILING JOINT RETURNS

16 AND SURVIVING SPOUSES.—There is hereby imposed on

17 the taxable income of—

18 ‘‘(1) every married individual (as defined in sec19 tion 7703) who makes a single return jointly with

20 his spouse under section 6013, and

21 ‘‘(2) every surviving spouse (as defined in sec22 tion 2(a)),

23 a tax determined in accordance with the following table:

‘‘If taxable income is: The tax is:

Not over $70,000 .......................... 15% of taxable income.

Over $70,000 but not over

$102,300.

$10,500, plus 28% of the excess over

$70,000.
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‘‘If taxable income is: The tax is:

Over $102,300 but not over

$155,950.

$19,544, plus 31% of the excess over

$102,300.

Over $155,950 but not over

$278,450.

$36,175, plus 36% of the excess over

$155,950.

Over $278,450 ............................... $80,275, plus 39.6% of the excess

over $278,450.

1 ‘‘(b) HEADS OF HOUSEHOLDS.—There is hereby im2 posed on the taxable income of every head of a household

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

4 with the following table:

‘‘If taxable income is: The tax is:

Not over $52,600 .......................... 15% of taxable income.

Over $52,600 but not over

$87,700.

$7,890, plus 28% of the excess over

$52,600.

Over $87,700 but not over

$142,000.

$17,718, plus 31% of the excess over

$87,700.

Over $142,000 but not over

$278,450.

$34,551, plus 36% of the excess over

$142,000.

Over $278,450 ............................... $83,673 plus 39.6% of the excess

over $278,450.

5 ‘‘(c) UNMARRIED INDIVIDUALS (OTHER THAN SUR6 VIVING SPOUSES AND HEADS OF HOUSEHOLDS).—There

7 is hereby imposed on the taxable income of every individ8 ual (other than a surviving spouse as defined in section

9 2(a) or the head of a household as defined in section 2(b))

10 who is not a married individual (as defined in section

11 7703) a tax determined in accordance with the following

12 table:

‘‘If taxable income is: The tax is:

Not over $35,000 .......................... 15% of taxable income.

Over $35,000 but not over

$61,400.

$5,250, plus 28% of the excess over

$35,000.

Over $61,400 but not over

$128,100.

$12,642, plus 31% of the excess over

$61,400.

Over $128,100 but not over

$278,450.

$33,319, plus 36% of the excess over

$128,100.

Over $278,450 ............................... $87,445, plus 39.6% of the excess

over $278,450.
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1 ‘‘(d) MARRIED INDIVIDUALS FILING SEPARATE RE2 TURNS.—There is hereby imposed on the taxable income

3 of every married individual (as defined in section 7703)

4 who does not make a single return jointly with his spouse

5 under section 6013, a tax determined in accordance with

6 the following table:

‘‘If taxable income is: The tax is:

Not over $35,000 .......................... 15% of taxable income.

Over $36,000 but not over

$51,150.

$5,250, plus 28% of the excess over

$35,000.

Over $51,150 but not over

$77,975.

$9,772, plus 31% of the excess over

$51,150.

Over $77,975 but not over

$139,225.

$18,088, plus 36% of the excess over

$77,975.

Over $139,225 ............................... $40,138, plus 39.6% of the excess

over $139,225.

7 ‘‘(e) ESTATES AND TRUSTS.—There is hereby im8 posed on the taxable income of—

9 ‘‘(1) every estate, and

10 ‘‘(2) every trust,

11 taxable under this subsection a tax determined in accord12 ance with the following table:

‘‘If taxable income is: The tax is:

Not over $1,700 ............................ 15% of taxable income.

Over $1,700 but not over $4,000 .. $255, plus 28% of the excess over

$1,700.

Over $4,000 but not over $6,100 .. $899, plus 31% of the excess over

$4,000.

Over $6,100 but not over $8,350 .. $1,550, plus 36% of the excess over

$6,100.

Over $8,350 ................................... $2,360, plus 39.6% of the excess over

$8,350.’’.

13 (b) INFLATION ADJUSTMENT TO APPLY IN DETER14 MINING RATES FOR 1999.—Subsection (f) of section 1 is

15 amended—
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1 (1) by striking ‘‘1993’’ in paragraph (1) and in2 serting ‘‘1998’’,

3 (2) by striking ‘‘1992’’ in paragraph (3)(B) and

4 inserting ‘‘1997’’, and

5 (3) by striking paragraph (7).

6 (c) CONFORMING AMENDMENTS.—

7 (1) The following provisions are each amended

8 by striking ‘‘1992’’ and inserting ‘‘1997’’ each place

9 it appears:

10 (A) Section 25A(h).

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

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

13 (D) Section 42(h)(6)(G)(i)(II).

14 (E) Section 68(b)(2)(B).

15 (F) Section 135(b)(2)(B)(ii).

16 (G) Section 151(d)(4).

17 (H) Section 221(g)(1)(B).

18 (I) Section 512(d)(2)(B).

19 (J) Section 513(h)(2)(C)(ii).

20 (K) Section 877(a)(2).

21 (L) Section 911(b)(2)(D)(ii)(II).

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

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

24 (O) Section 6039F(d).

25 (P) Section 6334(g)(1)(B).
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1 (Q) Section 7430(c)(1).

2 (2) Subparagraph (B) of section 59(j)(2) is

3 amended by striking ‘‘, determined by substituting

4 ‘1997’ for ‘1992’ in subparagraph (B) thereof’’.

5 (3) Subparagraph (B) of section 63(c)(4) is

6 amended by striking ‘‘by substituting for’’ and all

7 that follows and inserting ‘‘by substituting for ‘cal8 endar year 1997’ in subparagraph (B) thereof ‘cal9 endar year 1987’ in the case of the dollar amounts

10 contained in paragraph (2) or (5)(A) or subsection

11 (f).’’

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

13 amended by inserting before the period ‘‘, deter14 mined by substituting ‘calendar year 1992’ for ‘cal15 endar year 1997’ in subparagraph (B) thereof’’.

16 (5) Paragraph (2) of section 220(g) is amended

17 by striking ‘‘by substituting ‘calendar year 1997’ for

18 ‘calendar year 1992’ in subparagraph (B) thereof’’.

19 (6) Subparagraph (B) of section 685(c)(3) is

20 amended by striking ‘‘, by substituting ‘calendar

21 year 1997’ for ‘calendar year 1992’ in subparagraph

22 (B) thereof’’.

23 (7) Subparagraph (B) of section 2032A(a)(3) is

24 amended by striking ‘‘by substituting ‘calendar year
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1 1997’ for ‘calendar year 1992’ in subparagraph (B)

2 thereof’’.

3 (8) Subparagraph (B) of section 2503(b)(2) is

4 amended by striking ‘‘by substituting ‘calendar year

5 1997’ for ‘calendar year 1992’ in subparagraph (B)

6 thereof’’.

7 (9) Paragraph (2) of section 2631(c) is amend8 ed by striking ‘‘by substituting ‘calendar year 1997’

9 for ‘calendar year 1992’ in subparagraph (B) there10 of’’.

11 (10) Subparagraph (B) of 6601(j)(3) is amend12 ed by striking ‘‘by substituting ‘calendar year 1997’

13 for ‘calendar year 1992’ in subparagraph (B) there14 of’’.

15 (d) MODIFICATION OF WITHHOLDING TABLES FOR

16 TAXABLE YEAR 1998.—Notwithstanding the provisions of

17 section 3402(a) of the Internal Revenue Code of 1986, the

18 Secretary of the Treasury shall modify the tables and pro19 cedures under section 3402(a)(1) of such Code to reflect

20 the amendment made by subsection (a). Such modification

21 shall—

22 (1) take effect on July 1, 1998, and

23 (2) reflect the entire reduction in taxes for cal24 endar year 1998 made by such amendment during

25 the 6-month period beginning July 1, 1998.
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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, 1997.

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