‘‘(1) an individual’s taxable income shall include
the taxable income of each dependent child of such
individual who has not attained age 14 as of the
close of such taxable year, and
‘‘(2) such dependent child shall have no liability
for tax imposed by this section with respect to such
income and shall not be required to file a return for
such taxable year.
‘‘(f) INFLATION ADJUSTMENT.—
‘‘(1) IN GENERAL.—In the case of any taxable
year beginning in a calendar year after 1998, each
dollar amount contained in subsection (d) shall be
increased by an amount determined by the Secretary
to be equal to—
‘‘(A) such dollar amount, multiplied by
‘‘(B) the cost-of-living adjustment for such
calendar year.
‘‘(2) COST-OF-LIVING ADJUSTMENT.—For pur-
poses of paragraph (1), the cost-of-living adjustment
for any calendar year is the percentage (if any) by
which—
‘‘(A) the CPI for the preceding calendar
year, exceeds
‘‘(B) the CPI for the calendar year 1997.
‘‘(3) CPI FOR ANY CALENDAR YEAR.—For pur-
poses of paragraph (2), the CPI for any calendar
year is the average of the Consumer Price Index as
of the close of the 12-month period ending on
August 31 of such calendar year.
‘‘(4) CONSUMER PRICE INDEX.—For purposes
of paragraph (3), the term ‘Consumer Price Index’
means the last Consumer Price Index for all-urban
consumers published by the Department of Labor.
For purposes of the preceding sentence, the revision
of the Consumer Price Index which is most consist-
ent with the Consumer Price Index for calendar year
1986 shall be used.
‘‘(5) ROUNDING.—If any increase determined
under paragraph (1) is not a multiple of $10, such
increase shall be rounded to the next highest mul-
tiple of $10.
‘‘(g) MARRIED COUPLE MUST FILE JOINT RE-
TURN.—
‘‘(1) IN GENERAL.—Except in the case of a
husband and wife who live apart at all times during
the taxable year, if the taxpayer is married at the
close of the taxable year, an election under sub-
section (a) shall be made only if the taxpayer and
his spouse file a joint return for the taxable year.
‘‘(2) MARITAL STATUS.—For purposes of this
section, marital status shall be determined under
section 7703.’’
(b) CONFORMING AMENDMENT.—The table of sec-
tions for part I of subchapter A of chapter 1 of such Code
is amended by striking the item relating to section 5 and
inserting after the item relating to section 4 the following
new items:
‘‘Sec. 5. Flat alternative individual return tax.
‘‘Sec. 6. Cross references relating to tax on individuals.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1997.
SEC. 3. SUPERMAJORITY REQUIRED.
(a) IN GENERAL.—It shall not be in order in the
House of Representatives or the Senate to consider any
bill, joint resolution, amendment thereto, or conference re-
port thereon that includes any provision that—
(1) increases the FAIR tax rate (as specified in
subsection (b) of section 5 of the Internal Revenue
Code of 1986, as added by this Act),
(2) creates any additional FAIR income tax
rate (related to the alternative tax imposed by such
section 5), or
(3) reduces the FAIR standard deduction (as
defined in subsection (d) of such section 5).
(b) WAIVER OR SUSPENSION.—This section may be
waived or suspended in the House of Representatives or
the Senate only by the affirmative vote of three-fifths of
the Members, duly chosen and sworn.
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