I 

108TH CONGRESS 

1ST SESSION H. R. 42

To amend the Internal Revenue Code of 1986 reduce individual capital 

gains rates. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 7, 2003

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

Committee on Ways and Means 

A BILL

To amend the Internal Revenue Code of 1986 reduce 

individual capital gains rates.

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 ‘‘Capital Gains Tax 

5 Rate Reduction Act of 2003’’. 

6 SEC. 2. REDUCTION IN CAPITAL GAINS RATES FOR INDIVID7 UALS. 

8 (a) IN GENERAL.—

9 (1) 10-PERCENT RATE REDUCED TO 5 PER10 CENT.—Subparagraph (B) of section 1(h) of the In-
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1 ternal Revenue Code of 1986 (relating to general 

2 rule for maximum capital gains rate) is amended by 

3 striking ‘‘10 percent’’ and inserting ‘‘5 percent’’. 

4 (2) 20-PERCENT RATE REDUCED TO 10 PER5 CENT.—Subparagraph (C) of section 1(h) of such 

6 Code is amended by striking ‘‘20 percent’’ and in7 serting ‘‘10 percent’’. 

8 (3) CONFORMING AMENDMENTS.—

9 (A) Section 57(a)(7) of such Code is 

10 amended by striking the last sentence. 

11 (B) Paragraph (1) of section 1445(e) of 

12 such Code is amended by striking ‘‘20 percent’’ 

13 and inserting ‘‘10 percent’’. 

14 (C) The second sentence of section 

15 7518(g)(6)(A), and the second sentence of sec16 tion 607(h)(6)(A) of the Merchant Marine Act, 

17 1936, are each amended by striking ‘‘20 per18 cent’’ and inserting ‘‘10 percent’’. 

19 (b) REPEAL OF REDUCED RATES FOR QUALIFIED 5-

20 YEAR GAIN.—

21 (1) IN GENERAL.—Section 1(h) of such Code is 

22 amended by striking paragraph (2) and redesig23 nating paragraphs (3) through (12) as paragraphs 

24 (2) through (11), respectively. 

25 (2) CONFORMING AMENDMENTS.—
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1 (A) Subparagraph (A)(ii) of section 

2 1(h)(6) of such Code, as redesignated by para3 graph (1), is amended—

4 (i) in subclause (I) by striking ‘‘para5 graph (5)(B)’’ and inserting ‘‘paragraph 

6 (4)(B)’’, and 

7 (ii) in subclause (II) by striking 

8 ‘‘paragraph (5)(A)’’ and inserting ‘‘para9 graph (4)(A)’’. 

10 (B) Paragraph (9) of section 1(h) of such 

11 Code is amended by striking ‘‘paragraph 

12 (7)(A)(i)’’ and inserting ‘‘paragraph (6)(A)(i)’’. 

13 (c) MINIMUM TAX.—

14 (1) IN GENERAL.—

15 (A) 10-PERCENT RATE REDUCED TO 5

16 PERCENT.—Subparagraph (B) of section 

17 55(b)(3) of such Code is amended by striking 

18 ‘‘10 percent’’ and inserting ‘‘5 percent’’. 

19 (B) 20-PERCENT RATE REDUCED TO 10

20 PERCENT.—Subparagraph (C) of section 

21 55(b)(3) of such Code is amended by striking 

22 ‘‘20 percent’’ and inserting ‘‘10 percent’’. 

23 (2) CONFORMING AMENDMENT.—Paragraph (3) 

24 of section 55(b) of such Code is amended in the 

25 matter following subparagraph (D) by striking ‘‘In 
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1 the case of taxable years beginning after December 

2 31, 2000, rules similar to the rules of section 

3 1(h)(2) shall apply for purposes of subparagraphs 

4 (B) and (C).’’. 

5 (d) EFFECTIVE DATES.—

6 (1) IN GENERAL.—Except as provided by para7 graph (2), the amendments made by this section 

8 shall apply to taxable years beginning after Decem9 ber 31, 2002. 

10 (2) WITHHOLDING.—The amendment made by 

11 subsection (a)(3)(B) shall apply to amounts paid 

12 after the date of the enactment of this Act.

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