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107TH CONGRESS

1ST SESSION H. R. 1836

To provide for reconciliation pursuant to section 104 of the concurrent

resolution on the budget for fiscal year 2002.

IN THE HOUSE OF REPRESENTATIVES

MAY 15, 2001

Mr. THOMAS introduced the following bill; which was referred to the

Committee on Ways and Means

A BILL

To provide for reconciliation pursuant to section 104 of

the concurrent resolution on the budget for fiscal year 2002.

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 ‘‘Economic Growth and Tax Relief Reconciliation Act of

6 2001’’.

7 (b) AMENDMENT OF 1986 CODE.—Except as other8 wise expressly provided, whenever in this Act an amend9 ment or repeal is expressed in terms of an amendment

10 to, or repeal of, a section or other provision, the reference
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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. REDUCTION IN INCOME TAX RATES FOR INDIVID8 UALS.

9 (a) IN GENERAL.—Section 1 is amended by adding

10 at the end the following new subsection:

11 ‘‘(i) RATE REDUCTIONS AFTER 2000.—

12 ‘‘(1) NEW LOWEST RATE BRACKET.—

13 ‘‘(A) IN GENERAL.—In the case of taxable

14 years beginning after December 31, 2000—

15 ‘‘(i) the rate of tax under subsections

16 (a), (b), (c), and (d) on taxable income not

17 over the initial bracket amount shall be 12

18 percent (as modified by paragraph (2)),

19 and

20 ‘‘(ii) the 15 percent rate of tax shall

21 apply only to taxable income over the ini22 tial bracket amount.

23 ‘‘(B) INITIAL BRACKET AMOUNT.—For

24 purposes of this subsection, the initial bracket

25 amount is—
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1 ‘‘(i) $12,000 in the case of subsection

2 (a),

3 ‘‘(ii) $10,000 in the case of subsection

4 (b), and

‘‘(iii) 1 5 ⁄2 the amount applicable under

6 clause (i) in the case of subsections (c) and

7 (d).

8 ‘‘(C) INFLATION ADJUSTMENT.—In pre9 scribing the tables under subsection (f) which

10 apply with respect to taxable years beginning in

11 calendar years after 2001—

12 ‘‘(i) the Secretary shall make no ad13 justment to the initial bracket amount for

14 any taxable year beginning before January

15 1, 2007,

16 ‘‘(ii) the cost-of-living adjustment

17 used in making adjustments to the initial

18 bracket amount for any taxable year begin19 ning after December 31, 2006, shall be de20 termined under subsection (f)(3) by sub21 stituting ‘2005’ for ‘1992’ in subparagraph

22 (B) thereof, and

23 ‘‘(iii) such adjustment shall not apply

24 to the amount referred to in subparagraph

25 (B)(iii).
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1 If any amount after adjustment under the pre2 ceding sentence is not a multiple of $50, such

3 amount shall be rounded to the next lowest

4 multiple of $50.

5 ‘‘(2) REDUCTIONS IN RATES AFTER 2001.—In

6 the case of taxable years beginning in a calendar

7 year after 2001, the corresponding percentage speci8 fied for such calendar year in the following table

9 shall be substituted for the otherwise applicable tax

10 rate in the tables under subsections (a), (b), (c), (d),

11 and, to the extent applicable, (e).

‘‘In the case of taxable years

beginning during calendar year:

The corresponding percentages shall

be substituted for

the following percentages:

12% 28% 31% 36% 39.6%

2002 ............................................................ 12% 27% 30% 35% 38%

2003 ............................................................ 11% 27% 29% 35% 37%

2004............................................................ 11% 26% 28% 34% 36%

2005 ............................................................ 11% 26% 27% 34% 35%

2006 and thereafter .................................... 10% 25% 25% 33% 33%

12 ‘‘(3) ADJUSTMENT OF TABLES.—The Secretary

13 shall adjust the tables prescribed under subsection

14 (f) to carry out this subsection.’’.

15 (b) REPEAL OF REDUCTION OF REFUNDABLE TAX

16 CREDITS.—

17 (1) Subsection (d) of section 24 is amended by

18 striking paragraph (2) and redesignating paragraph

19 (3) as paragraph (2).
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1 (2) Section 32 is amended by striking sub2 section (h).

3 (c) CONFORMING AMENDMENTS.—

4 (1) Subparagraph (B) of section 1(g)(7) is

5 amended—

6 (A) by striking ‘‘15 percent’’ in clause

7 (ii)(II) and inserting ‘‘the first bracket percent8 age’’, and

9 (B) by adding at the end the following

10 flush sentence:

11 ‘‘For purposes of clause (ii), the first bracket

12 percentage is the percentage applicable to the

13 lowest income bracket in the table under sub14 section (c).’’

15 (2) Section 1(h) is amended—

16 (A) by striking ‘‘28 percent’’ both places it

17 appears in paragraphs (1)(A)(ii)(I) and

18 (1)(B)(i) and inserting ‘‘25 percent’’, and

19 (B) by striking paragraph (13).

20 (3) Section 15 is amended by adding at the end

21 the following new subsection:

22 ‘‘(f) RATE REDUCTIONS ENACTED BY ECONOMIC

23 GROWTH AND TAX RELIEF RECONCILIATION ACT OF

24 2001.—This section shall not apply to any change in rates
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1 under subsection (i) of section 1 (relating to rate reduc2 tions after 2000).’’.

3 (4) Section 531 is amended by striking ‘‘equal

4 to’’ and all that follows and inserting ‘‘equal to the

5 product of the highest rate of tax under section 1(c)

6 and the accumulated taxable income.’’.

7 (5) Section 541 is amended by striking ‘‘equal

8 to’’ and all that follows and inserting ‘‘equal to the

9 product of the highest rate of tax under section 1(c)

10 and the undistributed personal holding company in11 come.’’.

12 (6) Section 3402(p)(1)(B) is amended by strik13 ing ‘‘7, 15, 28, or 31 percent’’ and inserting ‘‘7 per14 cent, any percentage applicable to any of the 3 low15 est income brackets in the table under section

16 1(c),’’.

17 (7) Section 3402(p)(2) is amended by striking

18 ‘‘equal to 15 percent of such payment’’ and inserting

19 ‘‘equal to the product of the lowest rate of tax under

20 section 1(c) and such payment’’.

21 (8) Section 3402(q)(1) is amended by striking

22 ‘‘equal to 28 percent of such payment’’ and inserting

23 ‘‘equal to the product of the third to the lowest rate

24 of tax under section 1(c) and such payment’’.
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1 (9) Section 3402(r)(3) is amended by striking

2 ‘‘31 percent’’ and inserting ‘‘the third to the lowest

3 rate of tax under section 1(c)’’.

4 (10) Section 3406(a)(1) is amended by striking

5 ‘‘equal to 31 percent of such payment’’ and inserting

6 ‘‘equal to the product of the third to the lowest rate

7 of tax under section 1(c) and such payment’’.

8 (11) Section 13273 of the Revenue Reconcili9 ation Act of 1993 is amended by striking ‘‘28 per10 cent’’ and inserting ‘‘the third to the lowest rate of

11 tax under section 1(c) of the Internal Revenue Code

12 of 1986’’.

13 (d) EFFECTIVE DATES.—

14 (1) IN GENERAL.—Except as provided in para15 graph (2), the amendments made by this section

16 shall apply to taxable years beginning after Decem17 ber 31, 2000.

18 (2) AMENDMENTS TO WITHHOLDING PROVI19 SIONS.—The amendments made by paragraphs (6),

20 (7), (8), (9), (10), and (11) of subsection (c) shall

21 apply to amounts paid after the 60th day after the

22 date of the enactment of this Act.
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1 SEC. 3. PROTECTION OF SOCIAL SECURITY AND MEDICARE.

2 The amounts transferred to any trust fund under the

3 Social Security Act shall be determined as if this Act had

4 not been enacted.

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