Fairness in Taxation Act of 2013

To amend the Internal Revenue Code of 1986 to impose increased rates of tax with respect to taxpayers with more than $1,000,000 taxable income, and for other purposes. 1. Short title This Act may be cited as the Fairness in Taxation Act of 2013 2. Increased tax rates for taxpayers with more than $1,000,000 taxable income (a) In general (1) Married individuals filing joint returns and surviving spouses The table contained in subsection (a) of section 1 If taxable income is: The tax is: Not over $17,850 10% of taxable income Over $17,850 but not over $72,500 $1,785, plus 15% of the excess over $17,850. Over $72,500 but not over $146,400 $9,982.50, plus 25% of the excess over $72,500. Over $146,400 but not over $223,050 $28,457.50, plus 28% of the excess over $146,400. Over $223,050 but not over $398,350 $49,919.50, plus 33% of the excess over $223,050. Over $398,350 but not over $450,000 $107,768.50, plus 35% of the excess over $398,350. Over $450,000 but not over $1,000,000 $125,846, plus 39.6% of the excess over $450,000. Over $1,000,000 but not over $10,000,000 $343,646, plus 45% of the excess over $1,000,000. Over $10,000,000 but not over $20,000,000 $4,393,646, plus 46% of the excess over $10,000,000. Over $20,000,000 but not over $100,000,000 $8,993,646, plus 47% of the excess over $20,000,000. Over $100,000,000 but not over $1,000,000,000 $46,593,646, plus 48% of the excess over $100,000,000. Over $1,000,000,000 $478,593,646, plus 49% over the excess over $1,000,000,000. (2) Heads of household The table contained in subsection (b) of section 1 of such Code is amended to read as follows: If taxable income is: The tax is: Not over $12,750 10% of taxable income. Over $12,750 but not over $48,600 $1,275, plus 15% of the excess over $12,750. Over $48,600 but not over $125,450 $6,652.50, plus 25% of the excess over $48,600. Over $125,450 but not over $203,150 $25,865, plus 28% of the excess over $125,450. Over $203,150 but not over $398,350 $47,621, plus 33% of the excess over $203,150. Over $398,350 but not over $425,000 $112,037, plus 35% of the excess over $398,350. Over $425,000 but not over $1,000,000 $121,364.50, plus 39.6% of the excess over $425,000. Over $1,000,000 but not over $10,000,000 $349,064.50, plus 45% of the excess over $1,000,000. Over $10,000,000 but not over $20,000,000 $4,399,064.50, plus 46% of the excess over $10,000,000. Over $20,000,000 but not over $100,000,000 $8,999,064.50, plus 47% of the excess over $20,000,000. Over $100,000,000 but not over $1,000,000,000 $46,599,064.50, plus 48% of the excess over $100,000,000. Over $1,000,000,000 $478,599,064.50, plus 49% of the excess over $1,000,000,000. (3) Unmarried individuals (other than surviving spouses and heads of households) The table contained in subsection (c) of section 1 of such Code is amended to read as follows: If taxable income is: The tax is: Not over $8,925 10% of taxable income Over $8,925 but not over $36,250 $892.50, plus 15% of the excess over $8,925. Over $36,250 but not over $87,850 $4,991.25, plus 25% of the excess over $36,250. Over $87,850 but not over $183,250 $17,891.25, plus 28% of the excess over $87,850. Over $183,250 but not over $398,350 $44,603.25, plus 33% of the excess over $183,250. Over $398,350 but not over $400,000 $115,586.25, plus 35% of the excess over $398,350. Over $400,000 but not over $1,000,000 $116,163.75, plus 39.6% of the excess over $400,000. Over $1,000,000 but not over $10,000,000 $353,763.75, plus 45% of the excess over $1,000,000. Over $10,000,000 but not over $20,000,000 $4,403,763.75, plus 46% of the excess over $10,000,000. Over $20,000,000 but not over $100,000,000 $9,003,763.75, plus 47% of the excess over $20,000,000. Over $100,000,000 but not over $1,000,000,000 $46,603,763.75, plus 48% of the excess over $100,000,000. Over $1,000,000,000 $478,603,763.75, plus 49% of the excess over $1,000,000,000. (4) Married individuals filing separate returns The table contained in subsection (d) of section 1 of such Code is amended to read as follows: If taxable income is: The tax is: Not over $8,925 10% of taxable income Over $8,925 but not over $36,250 $892.50, plus 15% of the excess over $8,925. Over $36,250 but not over $73,200 $4,991.25, plus 25% of the excess over $36,250. Over $73,200 but not over $111,525 $14,228.75, plus 28% of the excess over $73,200. Over $111,525 but not over $199,175 $24,959.75, plus 33% of the excess over $111,525. Over $199,175 but not over $225,000 $53,884.25, plus 35% of the excess over $199,175 Over $225,000 but not over $500,000 $62,923, plus 39.6% of the excess over $225,000. Over $500,000 but not over $5,000,000 $171,823, plus 45% of the excess over $500,000. Over $5,000,000 but not over $10,000,000 $2,196,823, plus 46% of the excess over $5,000,000. Over $10,000,000 but not over $50,000,000 $4,496,823, plus 47% of the excess over $10,000,000. Over $50,000,000 but not over $500,000,000 $23,296,823, plus 48% of the excess over $50,000,000. Over $500,000,000 $239,296,823, plus 49% of the excess over $500,000,000. (5) Inflation adjustment Subsection (f) of section 1 of such Code is amended by adding at the end the following new paragraph: (9) Special rule for taxable years beginning after 2013 In prescribing the tables under paragraph (1) which apply with respect to taxable years beginning in a calendar year after 2013, the cost-of-living adjustment under paragraph (3) shall be determined by substituting 2012 1992 . (6) Conforming amendment Section 1 of such Code is amended by striking subsection (i). (b) Recapture of lower capital gains rates for individuals subject to added rate brackets (1) In general Section 1 of such Code is amended by adding at the end the following new subsection: (j) Special rule for capital gains in case of taxable income subject to at least 45-Percent rate bracket If for the taxable year a taxpayer has taxable income in excess of the minimum dollar amount for the 45-percent rate bracket and has a net capital gain, then— (1) the tax imposed by this section for the taxable year with respect to such excess shall be determined without regard to subsection (h), and (2) the amount of net capital gain of the taxpayer taken into account for the taxable year under subsection (h) shall be reduced by the lesser of— (A) such excess, or (B) the net capital gain for the taxable year. Any reduction in net capital gain under the preceding sentence shall be allocated between adjusted net capital gain, unrecaptured 1250 gain, and section 1202 gain in amounts proportionate to the amounts of each such gain. Any term used in this subsection which is also used in subsection (h) shall have the meaning given such term in subsection (h). . (2) Conforming amendment Paragraph (1) of section 1(h) of such Code is amended by striking If a taxpayer has Except to the extent provided in subsection (j), if a taxpayer has (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2012.

Summary: Fairness in Taxation Act of 2013 - Amends the Internal Revenue Code to: (1) increase individual income tax rates for taxpayers whose taxable income exceeds $1 million, and (2) provide for an adjustment in the capital gains tax of taxpayers whose taxable income is subject to the 45% tax bracket.