I

106TH CONGRESS

1ST SESSION H. R. 1440

To amend the Internal Revenue Code of 1986 to reduce the 15 and 28

percent individual income tax rates to 10 and 23 percent over a 10

year period.

IN THE HOUSE OF REPRESENTATIVES

APRIL 15, 1999

Mr. GREENWOOD (for himself, Mr. OSE, Mr. ENGLISH, and Mr. HORN) 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 reduce

the 15 and 28 percent individual income tax rates to

10 and 23 percent over a 10 year period.

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; ETC.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Tax Rate Reduction Act of 1999’’.

6 (b) SECTION 15 NOT TO APPLY.—The amendments

7 made by section 2 shall not be treated as a change in a

8 rate of tax for purposes of section 15 of the Internal Rev9 enue Code of 1986.
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1 SEC. 2. 5 PERCENTAGE POINT REDUCTION IN 15 AND 28

2 PERCENT INDIVIDUAL INCOME TAX RATES

3 OVER 10 YEARS.

4 (a) IN GENERAL.—Section 1 of the Internal Revenue

5 Code of 1986 (relating to tax imposed) is amended by

6 striking subsections (a) through (e) and inserting the fol7 lowing:

8 ‘‘(a) MARRIED INDIVIDUALS FILING JOINT RETURNS

9 AND SURVIVING SPOUSES.—There is hereby imposed on

10 the taxable income of—

11 ‘‘(1) every married individual (as defined in sec12 tion 7703) who makes a single return jointly with

13 his spouse under section 6013, and

14 ‘‘(2) every surviving spouse (as defined in sec15 tion 2(a)),

16 a tax determined in accordance with the following table:

‘‘If taxable income is: The tax is:

Not over $43,050 .......................... 14.5% of taxable income.

Over $43,050 but not over

$104,050.

$6,242.25, plus 27.5% of the excess

over $43,050

Over $104,050 but not over

$158,550.

$23,017.25, plus 31% of the excess

over $104,050

Over $158,550 but not over

$283,150.

$39,912.25, plus 36% of the excess

over $158,550

Over $283,150................ ............... $84,768.25, plus 39.6% of the excess

over $283,150

17 ‘‘(b) HEADS OF HOUSEHOLDS.—There is hereby im18 posed on the taxable income of every head of a household

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

20 with the following table:
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‘‘If taxable income is: The tax is:

Not over $34,550 .......................... 14.5% of taxable income.

Over $34,550 but not over

$89,150.

$5,009.75, plus 27.5% of the excess

over $34,550

Over $89,150 but not over

$144,400.

$20,024.75, plus 31% of the excess

over $89,150

Over $144,400 but not over

$283,150.

$37,152.25, plus 36% of the excess

over $144,400

Over $283,150................ ............... $87,102.25, plus 39.6% 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 indi4 vidual (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 $25,570 .......................... 14.5% of taxable income.

Over $25,570 but not over

$62,450.

$3,707.65, plus 27.5% of the excess

over $25,570

Over $62,450 but not over

$130,250.

$13,849.65, plus 31% of the excess

over $62,450

Over $130,250 but not over

$283,150.

$34,867.65, plus 36% of the excess

over $130,250

Over $283,150................ ............... $89,911.65, plus 39.6% 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 .......................... 14.5% of taxable income.
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‘‘If taxable income is: The tax is:

Over $21,525 but not over

$52,025.

$3,121.12, plus 27.5% of the excess

over $21,525

Over $52,025 but not over

$79,275.

$11,508.62, plus 31% of the excess

over $52,025

Over $79,275 but not over

$141,575.

$19,956.12, plus 36% of the excess

over $79,275

Over $141,575................ ............... $42,384.12, plus 39.6% 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 ............................ 14.5% of taxable income.

Over $1,750 but not over $4,050 .. $253.75, plus 27.5% of the excess

over $1,750

Over $4,050 but not over $6,200 .. $886.25, plus 31% of the excess over

$4,050

Over $6,200 but not over $8,450 .. $1,552.75, plus 36% of the excess

over $6,200

Over $8,450................ ................... $2,362.75, plus 39% of the excess

over $8,450

7 (b) ADDITIONAL REDUCTIONS AFTER 1999.—

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

9 1(f) of such Code is amended to read as follows:

10 ‘‘(7) PHASEIN OF 5 PERCENTAGE POINT RATE

11 REDUCTION IN LOWER BRACKETS.—In prescribing

12 the tables under paragraph (1) which apply with re13 spect to taxable years beginning in a calendar year

14 after 1999, the corresponding percentages specified

15 for such calendar year in the following table shall be
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1 substituted for 14.5% and 27.5%, respectively, in

2 subsections (a), (b), (c), (d), and (e).

In the case of taxable years

beginning during calendar year:

The corresponding

percentage shall

be substituted for

the following percentages:

14.5% 27.5%

2000 ..................................................................... 14.0% 27.0%

2001 ..................................................................... 13.5% 26.5%

2002 ..................................................................... 13.0% 26.0%

2003 ..................................................................... 12.5% 25.5%

2004 ..................................................................... 12.0% 25.0%

2005 ..................................................................... 11.5% 24.5%

2006 ..................................................................... 11.0% 24.0%

2007 ..................................................................... 10.5% 23.5%

2008 or thereafter ................................................ 10.0% 23.0%.’’

3 (2) TECHNICAL AMENDMENTS.—

4 (A) Subparagraph (B) of section 1(f)(2) of

5 such Code is amended by inserting ‘‘except as

6 provided in paragraph (7),’’ before ‘‘by not

7 changing’’.

8 (B) Subparagraph (C) of section 1(f)(2) of

9 such Code is amended by inserting ‘‘and the re10 ductions under paragraph (7) in the rates of

11 tax’’ before the period.

12 (C) The heading for subsection (f) of sec13 tion 1 of such Code is amended by inserting

14 ‘‘RATE REDUCTIONS;’’ before ‘‘ADJUSTMENTS’’.

15 (D) Subparagraph (B) of section 1(g)(7)

16 of such Code is amended—
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1 (i) by striking ‘‘15 percent’’ in clause

2 (ii)(II) and inserting ‘‘the applicable first

3 bracket percentage’’, and

4 (ii) by adding at the end the following

5 flush sentence:

6 ‘‘For purposes of clause (ii), the applicable first

7 bracket percentage is the percentage applicable

8 to the lowest income bracket in the table con9 tained in subsection (c).’’

10 (E) Section 1(h) of such Code is

11 amended—

12 (i) by striking ‘‘28 percent’’ both

13 places it appears in paragraphs

14 (1)(A)(ii)(I) and (1)(B)(i) and inserting

15 ‘‘23 percent’’, and

16 (ii) by striking paragraph (13).

17 (F) Section 3402(p)(1)(B) of such Code is

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

19 and inserting ‘‘7 percent, a percentage applica20 ble to any income bracket in the table contained

21 in section 1(c) other than the highest 2 brack22 ets,’’.

23 (G) Section 3402(p)(2) of such Code is

24 amended by striking ‘‘15 percent’’ and inserting
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1 ‘‘the applicable first bracket percentage (as de2 fined in section 1(g)(7))’’.

3 (H) Section 3402(q)(1) of such Code is

4 amended by striking ‘‘28 percent of such pay5 ment.’’ and inserting ‘‘the applicable percentage

6 of such payment. For purposes of the preceding

7 sentence, the applicable percentage is the per8 centage applicable to the next to the lowest in9 come bracket in the table contained in section

10 1(c).’’

11 (c) INFLATION ADJUSTMENT CONFORMING AMEND12 MENTS.—

13 (1) Subsection (f) of section 1 of such Code is

14 amended—

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

16 and inserting ‘‘1999’’, and

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

18 (3)(B) and inserting ‘‘1998’’.

19 (2) The following provisions of such Code are

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

21 ‘‘1998’’ each place it appears:

22 (A) Section 25A(h).

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

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

25 (D) Section 59(j)(2)(B).
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1 (E) Section 63(c)(4)(B).

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

17 (U) Section 6039F(d).

18 (V) Section 6323(i)(4)(B).

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

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

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

22 such Code is amended by striking ‘‘1987’’ and in23 serting ‘‘1998’’.

24 (d) EFFECTIVE DATES.—
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1 (1) IN GENERAL.—Except as provided in para2 graph (2), the amendments made by this section

3 shall apply to taxable years beginning after Decem4 ber 31, 1998.

5 (2) AMENDMENTS TO WITHHOLDING PROVI6 SIONS.—The amendments made by subparagraphs

7 (F), (G), and (H) of subsection (b)(2) shall apply to

8 amounts paid after the date of the enactment of this

9 Act.

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