I

107TH CONGRESS

1ST SESSION H. R. 1277

To amend the Internal Revenue Code of 1986 to reduce estate tax rates

by 20 percent, to increase the unified credit against estate and gift

taxes to the equivalent of a $2,500,000 exclusion and to provide an

inflation adjustment of such amount, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MARCH 28, 2001

Mrs. LOWEY 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

estate tax rates by 20 percent, to increase the unified

credit against estate and gift taxes to the equivalent

of a $2,500,000 exclusion and to provide an inflation

adjustment of such amount, 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.

4 This Act may be cited as the ‘‘Estate Tax Reduction

5 Act of 2001’’.
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1 SEC. 2. 20 PERCENT REDUCTION IN ESTATE TAX RATES; RE2 PEAL OF PHASEOUT OF GRADUATED RATES.

3 (a) IN GENERAL.—Subsection (c) of section 2001 of

4 the Internal Revenue Code of 1986 is amended to read

5 as follows:

6 ‘‘(c) RATE SCHEDULE.—

‘‘If the amount with respect

to which the tentative tax

is to be computed is:

The tentative tax is:

Not over $10,000 .......................... 14.4% of such amount.

Over $10,000 but not over

$20,000.

$1,440, plus 16% of the excess of

such amount over $10,000

Over $20,000 but not over

$40,000.

$3,040, plus 17.6% of the excess of

such amount over $20,000

Over $40,000 but not over

$60,000.

$6,560, plus 19.2% of the excess of

such amount over $40,000

Over $60,000 but not over

$80,000.

$10,400, plus 20.8% of the excess of

such amount over $60,000

Over $80,000 but not over

$100,000.

$14,560, plus 22.4% of the excess of

such amount over $80,000

Over $100,000 but not over

$150,000.

$19,040, plus 24% of the excess of

such amount over $100,000

Over $150,000 but not over

$250,000.

$31,040, plus 25.6% of the excess of

such amount over $150,000

Over $250,000 but not over

$500,000.

$56,640, plus 27.2% of the excess of

such amount over $250,000

Over $500,000 but not over

$750,000.

$124,640, plus 29.6% of the excess

of such amount over $500,000

Over $750,000 but not over

$1,000,000.

$198,640, plus 31.2% of the excess

of such amount over $750,000

Over $1,000,000 but not over

$1,250,000.

$276,640, plus 32.8% of the excess

of such amount over $1,000,000

Over $1,250,000 but not over

$1,500,000.

$358,640, plus 34.4% of the excess

of such amount over $1,250,000

Over $1,500,000 but not over

$2,000,000.

$444,640, plus 36% of the excess of

such amount over $1,500,000

Over $2,000,000 but not over

$2,500,000.

$624,640, plus 39.2% of the excess

of such amount over $2,000,000

Over $2,500,000 but not over

$3,000,000.

$820,640, plus 42.4% of the excess

of such amount over $2,500,000

Over $3,000,000 ............................ $1,032,640, plus 44% of the excess

of such amount over $3,000,000’’.

7 (b) EFFECTIVE DATE.—The amendment made by

8 this section shall apply to estates of decedents dying, and

9 gifts made, after the date of the enactment of this Act.
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1 SEC. 3. UNIFIED CREDIT INCREASED TO EQUIVALENT OF

2 $2,500,000 EXCLUSION; INFLATION ADJUST3 MENT OF UNIFIED CREDIT.

4 (a) INCREASE IN UNIFIED CREDIT.—

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

6 2010 of the Internal Revenue Code of 1986 (relating

7 to applicable credit amount) is amended by striking

8 all that follows ‘‘were the applicable exclusion

9 amount’’ and inserting ‘‘. For purposes of the pre10 ceding sentence, the applicable exclusion amount is

11 $2,500,000.’’

12 (2) CONFORMING AMENDMENT.—Subparagraph

13 (A) of section 2057(a)(3) of such Code is amended

14 by striking ‘‘$625,000’’ and inserting ‘‘the excess of

15 the applicable exclusion amount (determined without

16 regard to this paragraph) over $675,000’’.

17 (b) INFLATION ADJUSTMENT.—Section 2010 of such

18 Code is amended by redesignating subsection (d) as sub19 section (e) and by inserting after subsection (c) the fol20 lowing new subsection:

21 ‘‘(d) COST-OF-LIVING ADJUSTMENT.—In the case of

22 any decedent dying, and gift made, in a calendar year

23 after 2001, the $2,500,000 amount set forth in subsection

24 (c) shall be increased by an amount equal to—

25 ‘‘(1) $2,500,000, multiplied by
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1 ‘‘(2) the cost-of-living adjustment determined

2 under section 1(f)(3) for such calendar year by sub3 stituting ‘calendar year 2000’ for ‘calendar year

4 1992’ in subparagraph (B) thereof.

5 If any amount as adjusted under the preceding sentence

6 is not a multiple of $10,000, such amount shall be round7 ed to the nearest multiple of $10,000.’’

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

9 this section shall apply to estates of decedents dying, and

10 gifts made, after the date of the enactment of this Act.

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