I 
108TH CONGRESS 
1ST SESSION 
H. R. 311
To amend the Internal Revenue Code of 1986 to provide a 10 percent 
maximum capital gains tax for individuals. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 8, 2003
Mr. PENCE (for himself, Mr. TOOMEY, Mrs. MYRICK, Mrs. JO ANN DAVIS of 
Virginia, Mr. GOODE, Mr. PITTS, Mr. KING of Iowa, Mr. CHOCOLA, Mr. 
RYUN of Kansas, Mr. TANCREDO, Mr. AKIN, Mr. WILSON of South Caro-
lina, Mr. PEARCE, Mr. HOSTETTLER, Mr. HOEKSTRA, Mr. FEENEY, Mr. 
SOUDER, Mr. FLAKE, Mr. BURTON of Indiana, Mr. TERRY, Mr. TIAHRT, 
Mr. SHADEGG, Mr. SESSIONS, Mr. OTTER, Mr. ADERHOLT, Mr. WELDON 
of Florida, Mr. RYAN of Wisconsin, Mr. BARRETT of South Carolina, Mr. 
DEMINT, Mr. CULBERSON, Mr. DOOLITTLE, Mr. GARRETT of New Jer-
sey, and Mr. SULLIVAN) 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 provide 
a 10 percent maximum capital gains tax for individuals.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘American Dream Tax 
Relief Act of 2003’’.
SEC. 2. 10 PERCENT MAXIMUM CAPITAL GAINS RATE FOR 
INDIVIDUALS. 
(a) IN GENERAL.—Subsection (h) of section 1 of the 
Internal Revenue Code of 1986 (relating to maximum cap-
ital gains rate) is amended to read as follows: 
‘‘(h) MAXIMUM CAPITAL GAINS RATE.—
‘‘(1) IN GENERAL.—If a taxpayer has a net 
capital gain for any taxable year, the tax imposed by 
this section for such taxable year shall not exceed 
the sum of—
‘‘(A) a tax computed at the rates and in 
the same manner as if this subsection had not 
been enacted on taxable income reduced by the 
net capital gain, and 
‘‘(B) 10 percent of the net capital gain. 
‘‘(2) NET CAPITAL GAIN TAKEN INTO ACCOUNT 
AS INVESTMENT INCOME.—For purposes of this sub-
section, the net capital gain for any taxable year 
shall be reduced (but not below zero) by the amount 
which the taxpayer elects to take into account as in-
vestment income under section 163(d)(4)(B)(iii).’’
(b) MINIMUM TAX.—
(1) IN
GENERAL.—Paragraph (3) of section 
55(b) of such Code is amended to read as follows: 
‘‘(3) MAXIMUM RATE OF TAX ON NET CAPITAL 
GAIN OF NONCORPORATE TAXPAYERS.—The amount
determined under the first sentence of paragraph 
(1)(A)(i) shall not exceed the sum of—
‘‘(A) the amount determined under such 
first sentence computed at the rates and in the 
same manner as if this paragraph had not been 
enacted on the taxable excess reduced by the 
net capital gain, plus 
‘‘(B) 10 percent of the lesser of the net 
capital gain or the taxable excess.’’
(2) EXCLUSION
OF
SECTION
1202
GAIN
NOT 
TREATED AS AN ITEM OF TAX PREFERENCE.—Sub-
section (a) of section 57 of such Code is amended 
by striking paragraph (7). 
(c) CONFORMING AMENDMENTS.—
(1) Subclause (II) of section 53(d)(1)(B)(ii) of 
such Code is amended by striking ‘‘, (5), and (7)’’ 
and inserting ‘‘and (5)’’. 
(2) Paragraph (1) of section 1445(e) of such 
Code is amended by striking ‘‘20 percent’’ and in-
serting ‘‘10 percent’’. 
(3) 
The 
second 
sentence 
of 
section 
7518(g)(6)(A) of such Code is amended by striking 
‘‘20 percent’’ and inserting ‘‘10 percent’’.