114 
the North American Industrial Classifica-
tion System, and 
‘‘(ii) all of such person’s facilities 
which are used for production in such busi-
ness are located in the United States. 
‘‘(5) CARRYBACK
AND
CARRYFORWARD
AL-
LOWED.— 
‘‘(A) IN GENERAL.—If the credit allowable 
under subsection (a) for a taxable year exceeds 
the amount of the limitation under subsection 
(f)(1) for such taxable year (in this paragraph 
referred to as the ‘unused credit year’), such 
excess shall be a credit carryback to each of the 
3 taxable years preceding the unused credit 
year and a credit carryforward to each of the 
20 taxable years following the unused credit 
year. 
‘‘(B) RULES.—Rules similar to the rules of 
section 39 shall apply with respect to the credit 
carryback and credit carryforward under sub-
paragraph (A). 
‘‘(6) CERTAIN RULES TO APPLY.—Rules similar 
to the rules of subsections (c), (d), and (e) of section 
52 shall apply.’’.
115 
(b) CONFORMING AMENDMENT.—Section 55(c)(2) of 
the Internal Revenue Code of 1986 is amended by insert-
ing ‘‘30B(f)(1),’’ after ‘‘30(b)(3),’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for subpart B of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by add-
ing at the end of 30A the following new item: 
‘‘Sec. 30B. Employer wage credit for activated military reservists.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2004. 
SEC. 625. EMPLOYER CONTRIBUTIONS TO IRAS OF CERTAIN 
MEMBERS OF THE UNIFORMED SERVICES. 
(a) IN GENERAL.—Section 3121 of the Internal Rev-
enue Code of 1986 is amended by adding at the end the 
following: 
‘‘(z) EMPLOYER CONTRIBUTIONS TO IRAS OF CER-
TAIN MEMBERS OF THE UNIFORMED SERVICES.—Noth-
ing in any paragraph of subsection (a) (other than para-
graphs (1) and (5)) shall exclude from the term ‘wages’ 
any employer payment on behalf of an individual to an 
individual retirement plan if such payment is made by the 
employer to such plan with respect to any period during 
which the individual is performing service in the uni-
formed services while on active duty for a period of more 
than 30 days.’’.
116 
(b) RAILROAD RETIREMENT.—Subsection (e) of Sec-
tion 3231 of such Code is amended by adding at the end 
the following new paragraph: 
‘‘(13) EMPLOYER CONTRIBUTIONS TO IRAS OF 
CERTAIN
MEMBERS
OF
THE
UNIFORMED
SERV-
ICES.—Nothing in any paragraph of this subsection 
(other than paragraph (2)) shall exclude from the 
term ‘compensation’ any amount described in section 
3121(z).’’. 
(c) FEDERAL UNEMPLOYMENT TAX.—Section 3306 
of such Code is amended by adding at the end the fol-
lowing: 
‘‘(v) EMPLOYER CONTRIBUTIONS TO IRAS OF CER-
TAIN MEMBERS OF THE UNIFORMED SERVICES.—Noth-
ing in any paragraph of subsection (b) (other than para-
graphs (1) and (5)) shall exclude from the term ‘wages’ 
any employer payment on behalf of an individual to an 
individual retirement plan if such payment is made by the 
employer to such plan with respect to any period during 
which the individual is performing service in the uni-
formed services while on active duty for a period of more 
than 30 days.’’. 
(d) WITHHOLDING.—Section 3401 of such Code, as 
amended by this Act, is amended by adding at the end 
the following new subsection:
117 
‘‘(j) EMPLOYER CONTRIBUTIONS TO IRAS OF CER-
TAIN MEMBERS OF THE UNIFORMED SERVICES.—Noth-
ing in any paragraph of subsection (a) (other than para-
graph (12)) shall exclude from the term ‘wages’ any 
amount described in section 3121(z).’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to amounts paid after December 
31, 2004. 
TITLE VII—FUNDING 
SEC. 701. REPEAL OF 2001 TAX CUT FOR HIGH INCOME TAX-
PAYERS. 
(a) IN GENERAL.—Section 1 of the Internal Revenue 
Code of 1986 is amended by adding at the end the fol-
lowing new subsection: 
‘‘(j) REPEAL OF 2001 TAX CUT FOR HIGH INCOME 
TAXPAYERS.—The amount determined under subsection 
(a), (b), (c), or (d), as the case may be, shall be increased 
by 4.6 percent of so much of taxable income as exceeds 
$1,000,000 in the case of individuals to whom subsection 
(a) applies ($500,000 in any other case).’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2005.
118 
SEC. 702. REPEAL OF SCHEDULED TERMINATION OF 
PHASEOUT OF PERSONAL EXEMPTIONS. 
(a) IN GENERAL.—Paragraph (3) of section 151(d) 
of the Internal Revenue Code of 1986 is amended by strik-
ing subparagraphs (E) and (F). 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2005. 
SEC. 703. REPEAL OF SCHEDULED PHASEOUT OF OVERALL 
LIMITATION ON ITEMIZED DEDUCTIONS. 
(a) IN GENERAL.—Section 68 of the Internal Rev-
enue Code of 1986 is amended by striking subsections (f) 
and (g). 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2005. 
Æ