I 

111TH CONGRESS 

2D SESSION H. R. 6358 

To amend the Internal Revenue Code of 1986 to provide for a zero percent 

capital gains rate for individuals and corporations. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 29, 2010 

Mr. MACK 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 

for a zero percent capital gains rate for 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. ZERO PERCENT CAPITAL GAINS RATE FOR IN4 DIVIDUALS AND CORPORATIONS. 

5 (a) ZERO PERCENT CAPITAL GAINS RATE FOR INDI6 VIDUALS.— 

7 (1) IN GENERAL.—Paragraph (1) of section 

8 1(h) of the Internal Revenue Code of 1986 is 

9 amended by striking subparagraph (C), by redesig10 nating subparagraphs (D) and (E) and subparaVerDate Mar 15 2010 03:39 Oct 14, 2010 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H6358.IH H6358

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1 graphs (C) and (D), respectively, and by amending 

2 subparagraph (B) to read as follows: 

3 ‘‘(B) 0 percent of the adjusted net capital 

4 gain (or, if less, taxable income);’’. 

5 (2) ALTERNATIVE MINIMUM TAX.—Paragraph 

6 (3) of section 55(b) is amended by striking subpara7 graph (C), by redesignating subparagraph (D) as 

8 subparagraph (C), and by amending subparagraph 

9 (B) to read as follows: 

10 ‘‘(B) 0 percent of the adjusted net capital 

11 gain (or, if less, taxable excess), plus’’. 

12 (3) REPEAL OF SUNSET OF REDUCTION IN CAP13 ITAL GAINS RATES FOR INDIVIDUALS.—Section 303 

14 of the Jobs and Growth Tax Relief Reconciliation 

15 Act of 2003 shall not apply to section 301 of such 

16 Act. 

17 (b) ZERO PERCENT CAPITAL GAINS RATE FOR COR18 PORATIONS.— 

19 (1) IN GENERAL.—Section 1201 of the Internal 

20 Revenue Code of 1986 is amended by redesignating 

21 subsection (b) as subsection (c), and by striking sub22 section (a) and inserting the following new sub23 sections: 

24 ‘‘(a) GENERAL RULE.—If for any taxable year a cor25 poration has a net capital gain, then, in lieu of the tax 


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1 imposed by sections 11, 511, 821(a) or (c), and 831(a), 

2 there is hereby imposed a tax (if such tax is less than 

3 the tax imposed by such sections) which shall consist of 

4 the sum of— 

5 ‘‘(1) a tax computed on the taxable income re6 duced by the amount of the net capital gain, at the 

7 rates and in the manner as if this subsection had 

8 not been enacted, 

9 ‘‘(2) 0 percent of the adjusted net capital gain 

10 (or, if less, taxable income), 

11 ‘‘(3) 25 percent of the excess (if any) of— 

12 ‘‘(A) the unrecaptured section 1250 gain 

13 (or, if less, the net capital gain (determined 

14 without regard to subsection (b)(2)), over 

15 ‘‘(B) the excess (if any) of— 

16 ‘‘(i) the sum of the amount on which 

17 tax is determined under paragraph (1) 

18 plus the net capital gain, over 

19 ‘‘(ii) taxable income, plus 

20 ‘‘(4) 28 percent of the amount of taxable in21 come in excess of the sum of the amounts on which 

22 tax is determined under the preceding paragraphs of 

23 this subsection. 

24 ‘‘(b) DEFINITIONS AND SPECIAL RULES.—For pur25 poses of this section— 


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1 ‘‘(1) IN GENERAL.—The terms ‘adjusted net 

2 capital gain’ and ‘unrecaptured section 1250 gain’ 

3 shall have the respective meanings given such terms 

4 in section 1(h). 

5 ‘‘(2) DIVIDENDS TAXED AT NET CAPITAL

6 GAIN.—Except as otherwise provided in this section, 

7 the term ‘net capital gain’ has the meaning given 

8 such term in section 1(h)(11).’’. 

9 (2) ALTERNATIVE MINIMUM TAX.—Section 

10 55(b) of such Code is amended by adding at the end 

11 the following new paragraph: 

12 ‘‘(4) MAXIMUM RATE OF TAX ON NET CAPITAL

13 GAIN OF CORPORATIONS.—The amount determined 

14 under paragraph (1)(B)(i) shall not exceed the sum 

15 of— 

16 ‘‘(A) the amount determined under such 

17 paragraph computed at the rates and in the 

18 same manner as if this paragraph had not been 

19 enacted on the taxable excess reduced by the 

20 net capital gain, plus 

21 ‘‘(B) the amount determined under section 

22 1201.’’. 

23 (3) TECHNICAL AMENDMENTS.— 


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1 (A) Section 1202(a) of such Code is 

2 amended by striking ‘‘50 percent’’ and inserting 

3 ‘‘100 percent’’. 

4 (B) Section 1445(e)(1) of such Code is 

5 amended by striking ‘‘35 percent (or, to the ex6 tent provided in regulations, 15 percent)’’ and 

7 inserting ‘‘0 percent’’. 

8 (C) Section 1445(e)(2) of such Code is 

9 amended by striking ‘‘35 percent’’ and inserting 

10 ‘‘0 percent’’. 

11 (D) Section 7518(g)(6)(A) of such Code is 

12 amended by striking ‘‘15 percent (34 percent in 

13 the case of a corporation)’’ and inserting ‘‘0 

14 percent’’. 

15 (E) Section 607(h)(6)(A) of the Merchant 

16 Marine Act, 1936, is amended by striking ‘‘15 

17 percent (34 percent in the case of a corpora18 tion)’’ and inserting ‘‘0 percent’’. 

19 (c) EFFECTIVE DATE.— 

20 (1) IN GENERAL.—Except as provided in para21 graph (2), the amendments made by this section 

22 shall apply to taxable years beginning after Decem23 ber 31, 2010. 

24 (2) WITHHOLDING.—The amendments made by 

25 subparagraphs (A) and (B) of subsection (b)(3) 


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1 shall apply to dispositions and distributions after the 

2 date of the enactment of this Act. 

Æ 


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