II 

110TH CONGRESS 

2D SESSION S. 3049 

To amend the Internal Revenue Code of 1986 to make the capital gains 

and dividends rate permanent and to provide estate tax relief and reform, 

and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MAY 22, 2008 

Mr. ALEXANDER 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 make 

the capital gains and dividends rate permanent and to 

provide estate tax relief and reform, 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. CAPITAL GAINS AND DIVIDENDS RATE MADE 

4 PERMANENT. 

5 The Jobs and Growth Tax Relief Reconciliation Act 

6 of 2003 is amended by striking section 303. 


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1 SEC. 2. ESTATE TAX RELIEF AND REFORM AFTER 2009. 

2 (a) RESTORATION OF UNIFIED CREDIT AGAINST

3 GIFT TAX.—Paragraph (1) of section 2505(a) of the In4 ternal Revenue Code of 1986 (relating to general rule for 

5 unified credit against gift tax), after the application of 

6 subsection (f), is amended by striking ‘‘(determined as if 

7 the applicable exclusion amount were $1,000,000)’’. 

8 (b) EXCLUSION EQUIVALENT OF UNIFIED CREDIT

9 EQUAL TO $3,500,000.—Subsection (c) of section 2010 

10 of the Internal Revenue Code of 1986 (relating to unified 

11 credit against estate tax) is amended to read as follows: 

12 ‘‘(c) APPLICABLE CREDIT AMOUNT.— 

13 ‘‘(1) IN GENERAL.—For purposes of this sec14 tion, the applicable credit amount is the amount of 

15 the tentative tax which would be determined under 

16 section 2001(c) if the amount with respect to which 

17 such tentative tax is to be computed were equal to 

18 the applicable exclusion amount. 

19 ‘‘(2) APPLICABLE EXCLUSION AMOUNT.— 

20 ‘‘(A) IN GENERAL.—For purposes of this 

21 subsection, the applicable exclusion amount is 

22 $3,500,000. 

23 ‘‘(B) INFLATION ADJUSTMENT.—In the 

24 case of any decedent dying in a calendar year 

25 after 2009, the $3,500,000 amount in subparaVerDate Aug 31 2005 03:50 May 24, 2008 Jkt 069200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S3049.IS S3049

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1 graph (A) shall be increased by an amount 

2 equal to— 

3 ‘‘(i) such dollar amount, multiplied by 

4 ‘‘(ii) the cost-of-living adjustment de5 termined under section 1(f)(3) for such 

6 calendar year by substituting ‘calendar 

7 year 2008’ for ‘calendar year 1992’ in sub8 paragraph (B) thereof. 

9 If any amount as adjusted under the preceding 

10 sentence is not a multiple of $10,000, such 

11 amount shall be rounded to the nearest multiple 

12 of $10,000.’’. 

13 (c) FLAT ESTATE AND GIFT TAX RATES.— 

14 (1) IN GENERAL.—Subsection (c) of section 

15 2001 of the Internal Revenue Code of 1986 (relating 

16 to imposition and rate of tax) is amended to read as 

17 follows: 

18 ‘‘(c) TENTATIVE TAX.—The tentative tax is 15 per19 cent of the amount with respect to which the tentative tax 

20 is to be computed.’’. 

21 (2) CONFORMING AMENDMENTS.— 

22 (A) Paragraphs (1) and (2) of section 

23 2102(b) of such Code are amended to read as 

24 follows: 


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1 ‘‘(1) IN GENERAL.—A credit in an amount that 

2 would be determined under section 2010 as the ap3 plicable credit amount if the applicable exclusion 

4 amount were $60,000 shall be allowed against the 

5 tax imposed by section 2101. 

6 ‘‘(2) RESIDENTS OF POSSESSIONS OF THE

7 UNITED STATES.—In the case of a decedent who is 

8 considered to be a ‘nonresident not a citizen of the 

9 United States’ under section 2209, the credit al10 lowed under this subsection shall not be less than 

11 the proportion of the amount that would be deter12 mined under section 2010 as the applicable credit 

13 amount if the applicable exclusion amount were 

14 $175,000 which the value of that part of the dece15 dent’s gross estate which at the time of the dece16 dent’s death is situated in the United States bears 

17 to the value of the decedent’s entire gross estate, 

18 wherever situated.’’. 

19 (B) Section 2502(a) of such Code (relating 

20 to computation of tax), after the application of 

21 subsection (f), is amended by adding at the end 

22 the following flush sentence: 

23 ‘‘In computing the tentative tax under section 2001(c) for 

24 purposes of this subsection, ‘the last day of the calendar 

25 year in which the gift was made’ shall be substituted for 


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1 ‘the date of the decedent’s death’ each place it appears 

2 in such section.’’. 

3 (d) MODIFICATIONS OF ESTATE AND GIFT TAXES TO

4 REFLECT DIFFERENCES IN UNIFIED CREDIT RESULTING

5 FROM DIFFERENT TAX RATES.— 

6 (1) ESTATE TAX.— 

7 (A) IN GENERAL.—Section 2001(b)(2) of 

8 the Internal Revenue Code of 1986 (relating to 

9 computation of tax) is amended by striking ‘‘if 

10 the provisions of subsection (c) (as in effect at 

11 the decedent’s death)’’ and inserting ‘‘if the 

12 modifications described in subsection (g)’’. 

13 (B) MODIFICATIONS.—Section 2001 of 

14 such Code is amended by adding at the end the 

15 following new subsection: 

16 ‘‘(g) MODIFICATIONS TO GIFT TAX PAYABLE TO RE17 FLECT DIFFERENT TAX RATES.—For purposes of apply18 ing subsection (b)(2) with respect to 1 or more gifts, the 

19 rates of tax under subsection (c) in effect at the decedent’s 

20 death shall, in lieu of the rates of tax in effect at the time 

21 of such gifts, be used both to compute— 

22 ‘‘(1) the tax imposed by chapter 12 with respect 

23 to such gifts, and 

24 ‘‘(2) the credit allowed against such tax under 

25 section 2505, including in computing— 


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1 ‘‘(A) the applicable credit amount under 

2 section 2505(a)(1), and 

3 ‘‘(B) the sum of the amounts allowed as a 

4 credit for all preceding periods under section 

5 2505(a)(2). 

6 For purposes of paragraph (2)(A), the applicable 

7 credit amount for any calendar year before 1998 is 

8 the amount which would be determined under sec9 tion 2010(c) if the applicable exclusion amount were 

10 the dollar amount under section 6018(a)(1) for such 

11 year.’’. 

12 (2) GIFT TAX.—Section 2505(a) of such Code 

13 (relating to unified credit against gift tax) is amend14 ed by adding at the end the following new flush sen15 tence: 

16 ‘‘For purposes of applying paragraph (2) for any calendar 

17 year, the rates of tax in effect under section 2502(a)(2) 

18 for such calendar year shall, in lieu of the rates of tax 

19 in effect for preceding calendar periods, be used in deter20 mining the amounts allowable as a credit under this sec21 tion for all preceding calendar periods.’’. 

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

23 this section shall apply to estates of decedents dying, gen24 eration-skipping transfers, and gifts made, after Decem25 ber 31, 2009. 


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1 (f) ADDITIONAL MODIFICATIONS TO ESTATE TAX.— 

2 (1) IN GENERAL.—The following provisions of 

3 the Economic Growth and Tax Relief Reconciliation 

4 Act of 2001, and the amendments made by such 

5 provisions, are hereby repealed: 

6 (A) Subtitles A and E of title V. 

7 (B) Subsection (d), and so much of sub8 section (f)(3) as relates to subsection (d), of 

9 section 511. 

10 (C) Paragraph (2) of subsection (b), and 

11 paragraph (2) of subsection (e), of section 521. 

12 The Internal Revenue Code of 1986 shall be applied 

13 as if such provisions and amendments had never 

14 been enacted. 

15 (2) SUNSET NOT TO APPLY TO TITLE V OF

16 EGTRRA.—Section 901 of the Economic Growth and 

17 Tax Relief Reconciliation Act of 2001 shall not 

18 apply to title V of such Act. 

19 (3) REPEAL OF DEADWOOD.— 

20 (A) Sections 2011, 2057, and 2604 of the 

21 Internal Revenue Code of 1986 are hereby re22 pealed. 

23 (B) The table of sections for part II of 

24 subchapter A of chapter 11 of such Code is 


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1 amended by striking the item relating to section 

2 2011. 

3 (C) The table of sections for part IV of 

4 subchapter A of chapter 11 of such Code is 

5 amended by striking the item relating to section 

6 2057. 

7 (D) The table of sections for subchapter A 

8 of chapter 13 of such Code is amended by strik9 ing the item relating to section 2604. 

Æ 


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