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104TH CONGRESS
1ST SESSION
H. R. 2083
To provide for a tax reduction in the case of low economic growth.
IN THE HOUSE OF REPRESENTATIVES
JULY 20, 1995
Mr. OBEY (for himself, Mr. HINCHEY, Mr. BRYANT of Texas, and Ms.
PELOSI) introduced the following bill; which was referred to the Commit-
tee on Ways and Means
A BILL
To provide for a tax reduction in the case of low economic
growth.
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 ‘‘Tax Reduction and
Economic Growth Act of 1995’’.
SEC. 2. TAX REDUCTION IN THE EVENT OF LOW GROWTH.
(a) LOW-GROWTH REPORT.—
(1) IN GENERAL.—At any time, the Director of
the Office of Management and Budget (hereafter in
this section referred to as the ‘‘Director’’) shall no-
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tify the President and the Congress if the Director
has determined that for any of the periods described
in paragraph (2)—
(A) economic growth as measured by the
change in real Gross Domestic Product (GDP)
at an annual rate is estimated to be less than
1.5 percent, and
(B) the rate of national unemployment
(seasonally adjusted) is estimated to be greater
than 6.5 percent.
(2) TESTING PERIODS.—For purposes of para-
graph (1), the periods described in this paragraph
are—
(A) the period consisting of the quarter
during which the notification is given and the
quarter preceding such notification,
(B) the period consisting of the preceding
4 quarters, and
(C) the period consisting of the 2 quarters
following such notification.
(b) PRESIDENTIAL AUTHORIZATION OF TEMPORARY
TAX REDUCTIONS.—
(1) PRESIDENTIAL DECLARATION.—After noti-
fication under subsection (a), the President may
issue a declaration that temporary income tax reduc-
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tions are required for a specified calendar year to
provide a quick and necessary fiscal stimulus to the
economy. Any such declaration shall be transmitted
to the Congress.
(2) TEMPORARY TAX MODIFICATIONS.—If the
President transmits a declaration under paragraph
(1) to the Congress—
(A) TEMPORARY TAX REDUCTIONS.—
(i) IN
GENERAL.—Effective for tax-
able years beginning in the calendar year
specified in such declaration—
(I) the rates applicable to the
first income bracket in the tax tables
contained in section 1 of the Internal
Revenue Code of 1986 shall be re-
duced by a percentage (not to exceed
3 percent) specified in such declara-
tion, and
(II) the amounts set fourth as
tax in such tables shall be adjusted to
reflect such rate reduction.
(ii) WITHHOLDING
ADJUSTMENTS.—
The withholding tables or procedures pre-
scribed by the Secretary of the Treasury or
his delegate under section 3402(a) of such
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Code shall be modified so that, to the max-
imum extent possible, the full calendar
year effect of such reduction is reflected
through withholding reductions during the
portion of the calendar year after such dec-
laration.
(B) TEMPORARY
SURTAX
WHERE
ECO-
NOMIC
GROWTH
REQUIREMENTS
SUBSE-
QUENTLY SATISFIED.—
(i) IN
GENERAL.—Effective for tax-
able years beginning in the first subse-
quent calendar year for which the eco-
nomic growth requirements of paragraph
(3) are satisfied—
(I) each rate of tax in the tax ta-
bles contained in section 1 of the In-
ternal Revenue Code of 1986 shall be
increased by the percentage deter-
mined under paragraph (4) for such
year, except the tax rate for individ-
uals with Adjusted Gross Income of
less than $50,000 and taxpayers filing
jointly with Adjusted Gross Income of
less than $75,000 shall not exceed the
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rates established in the year prior to
the temporary tax reduction, and
(II) the amounts set forth as tax
in such tables shall be adjusted to re-
flect such rate increases.
(ii) WITHHOLDING
ADJUSTMENTS.—
Effective for such subsequent calendar
year, the withholding tables or procedures
prescribed by the Secretary of the Treas-
ury or his delegate under section 3402(a)
of such Code shall be modified to reflect
the increase in tax rates under clause (i).
(3) ECONOMIC GROWTH REQUIREMENTS.—The
economic growth requirements of this paragraph are
satisfied for any calendar year if, before the begin-
ning of such calendar year, the President determines
(and publishes such determination in the Federal
Register) that for such calendar year and the imme-
diately preceding calendar year—
(A) economic growth as measured by the
change in the real Gross Domestic Product
(GDP) is estimated to be greater than 4.5 per-
cent, and
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(B) the rate of national unemployment
(seasonally adjusted) is estimated to be less
than 5.5 percent.
(4) RATE INCREASE PERCENTAGE.—The per-
centage determined under this paragraph is the per-
centage increase in the tax rates contained in section
1 of the Internal Revenue Code of 1986 which the
President estimates will result in an aggregate in-
crease in receipts under chapter 1 of such Code
equal to the aggregate decrease in receipts under
such Code by reason of subparagraph (A) of para-
graph (2) without increasing the tax rate for individ-
uals with Adjusted Gross Income of less than
$50,000 and taxpayers filing jointly with Adjusted
Gross Income of less than $75,000 above the rates
established in the year prior to the temporary tax re-
duction. Such percentage shall be published in the
Federal Register before the beginning of the cal-
endar year for which the economic requirements of
paragraph (2) are satisfied.
SEC. 3. TREATMENT UNDER PAY-AS-YOU-GO PROCEDURES.
Any reduction or increase in receipts resulting from
section 2 of this Act shall not be considered for any pur-
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pose under the Balanced Budget and Emergency Deficit
Control Act of 1985.
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