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amended by adding at the end thereof the following
new item:
‘‘Sec. 1258. Recharacterization of gain from certain financial
transactions.’’
(3) EFFECTIVE DATE.—The amendments made
by this section shall apply to conversion transactions
entered into after April 30, 1993.
(b) REPEAL OF CERTAIN EXCEPTIONS TO MARKET
DISCOUNT RULES.—
(1) MARKET DISCOUNT BONDS ISSUED ON OR
BEFORE JULY 18, 1984.—The following provisions are
hereby repealed:
(A) Section 1276(e).
(B) Section 1277(d).
(2) TAX-EXEMPT OBLIGATIONS.—
(A) IN GENERAL.—Paragraph (1) of section
1278(a) (defining market discount bond) is
amended—
(i) by striking clause (ii) of subpara-
graph (B) and redesignating subclauses (iii)
and (iv) of such subparagraph as clauses
(ii) and (iii), respectively,
(ii) by redesignating subparagraph (C)
as subparagraph (D), and
(iii) by inserting after subparagraph
(B) the following new subparagraph:
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‘‘(C) SECTION
1277
NOT
APPLICABLE
TO
TAX-EXEMPT OBLIGATIONS.—For purposes of sec-
tion 1277, the term ‘market discount bond’ shall
not include any tax-exempt obligation (as de-
fined in section 1275(a)(3)).’’
(B) CONFORMING
AMENDMENT.—Sections
1276(a)(4) and 1278(b)(1) are each amended by
striking ‘‘sections 871(a)’’ and inserting ‘‘sec-
tions 103, 871(a),’’.
(3) EFFECTIVE DATE.—The amendments made
by this section shall apply to obligations purchased
(within the meaning of section 1272(d)(1) of the In-
ternal Revenue Code of 1986) after April 30, 1993.
(c) TREATMENT OF STRIPPED PREFERRED STOCK.—
(1) IN GENERAL.—Section 305 is amended by re-
designating subsection (e) as subsection (f) and by in-
serting after subsection (d) the following new sub-
section:
‘‘(e) TREATMENT OF PURCHASER OF STRIPPED PRE-
FERRED STOCK.—
‘‘(1) IN
GENERAL.—If any person purchases
after April 30, 1993, any stripped preferred stock,
then such person, while holding such stock, shall in-
clude in gross income amounts equal to the amounts
which would have been so includible if such stripped
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preferred stock were a bond issued on the purchase
date and having original issue discount equal to the
excess, if any, of—
‘‘(A) the redemption price for such stock,
over
‘‘(B) the price at which such person pur-
chased such stock.
The preceding sentence shall also apply in the case of
any person whose basis in such stock is determined by
reference to the basis in the hands of such purchaser.
‘‘(2) BASIS ADJUSTMENTS.—Appropriate adjust-
ments to basis shall be made for amounts includible
in gross income under paragraph (1).
‘‘(3) TAX
TREATMENT
OF
PERSON
STRIPPING
STOCK.—If any person strips the rights to 1 or more
dividends from any stock described in paragraph
(5)(B) and after April 30, 1993, disposes of such divi-
dend rights, for purposes of paragraph (1), such per-
son shall be treated as having purchased the stripped
preferred stock on the date of such disposition for a
purchase price equal to such person’s adjusted basis
in such stripped preferred stock.
‘‘(4) AMOUNTS
TREATED
AS
ORDINARY
IN-
COME.—Any amount included in gross income under
paragraph (1) shall be treated as ordinary income.
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‘‘(5) STRIPPED PREFERRED STOCK.—For pur-
poses of this subsection—
‘‘(A) IN GENERAL.—The term ‘stripped pre-
ferred stock’ means any stock described in sub-
paragraph (B) if there has been a separation in
ownership between such stock and any dividend
on such stock which has not become payable.
‘‘(B) DESCRIPTION OF STOCK.—Stock is de-
scribed in this subsection if such stock—
‘‘(i) is limited and preferred as to divi-
dends and does not participate in corporate
growth to any significant extent, and
‘‘(ii) has a fixed redemption price.
‘‘(6) PURCHASE.—For purposes of this sub-
section, the term ‘purchase’ means—
‘‘(A) any acquisition of stock, where
‘‘(B) the basis of such stock is not deter-
mined in whole or in part by the reference to the
adjusted basis of such stock in the hands of the
person from whom acquired.’’
(2) COORDINATION WITH SECTION 167(e).—Para-
graph (2) of section 167(e) is amended to read as fol-
lows:
‘‘(2) COORDINATION WITH OTHER PROVISIONS.—
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‘‘(A) SECTION
273.—This subsection shall
not apply to any term interest to which section
273 applies.
‘‘(B) SECTION 305(e).—This subsection shall
not apply to the holder of the dividend rights
which were separated from any stripped pre-
ferred stock to which section 305(e)(1) applies.’’
(3) EFFECTIVE DATE.—The amendments made
by this subsection shall take effect on April 30, 1993.
(d) TREATMENT OF CAPITAL GAIN UNDER LIMITATION
ON INVESTMENT INTEREST.—
(1) IN GENERAL.—Subparagraph (B) of section
163(d)(4) (defining investment income) is amended to
read as follows:
‘‘(B) INVESTMENT INCOME.—The term ‘in-
vestment income’ means the sum of—
‘‘(i) gross income from property held
for investment (other than any gain taken
into account under clause (ii)(I)),
‘‘(ii) the excess (if any) of—
‘‘(I) the net gain attributable to
the disposition of property held for in-
vestment, over
‘‘(II) the net capital gain deter-
mined by only taking into account
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gains and losses from dispositions of
property held for investment, plus
‘‘(iii) so much of the net capital gain
referred to in clause (ii)(II) (or, if lesser,
the net gain referred to in clause (ii)(I)) as
the taxpayer elects to take into account
under this clause.’’
(2) COORDINATION WITH SPECIAL CAPITAL GAINS
RATE.—Subsection (h) of section 1, as amended by
section 8202(b), is amended by adding at the end the
following new sentence:
‘‘For purposes of the preceding sentence, 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 investment income for the taxable year under
section 163(d)(4)(B)(iii).’’
(3) EFFECTIVE DATE.—The amendments made
by this subsection shall apply to taxable years begin-
ning after December 31, 1992.
(e) TREATMENT OF CERTAIN APPRECIATED INVEN-
TORY.—
(1) IN
GENERAL.—Paragraph (1) of section
751(d) is amended to read as follows:
‘‘(1) SUBSTANTIAL APPRECIATION.—
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‘‘(A) IN GENERAL.—Inventory items of the
partnership shall be considered to have appre-
ciated substantially in value if their fair market
value exceeds 120 percent of the adjusted basis to
the partnership of such property.
‘‘(B) CERTAIN PROPERTY EXCLUDED.—For
purposes of subparagraph (A), there shall be ex-
cluded any inventory property if a principal
purpose for acquiring such property was to
avoid the provisions of this section relating to
inventory items.’’
(2) EFFECTIVE DATE.—The amendment made by
paragraph (1) shall apply to sales, exchanges, and
distributions after April 30, 1993.
Subpart B—Other Provisions
SEC. 8207. REPEAL OF LIMITATION ON AMOUNT OF WAGES
SUBJECT TO HEALTH INSURANCE EMPLOY-
MENT TAX.
(a) HOSPITAL INSURANCE TAX.—
(1) Paragraph (1) of section 3121(a) (defining
wages) is amended—
(A) by inserting ‘‘in the case of the taxes
imposed by sections 3101(a) and 3111(a)’’ after
‘‘(1)’’,
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(B) by striking ‘‘applicable contribution
base (as determined under subsection (x))’’ each
place it appears and inserting ‘‘contribution and
benefit base (as determined under section 230 of
the Social Security Act)’’, and
(C) by striking ‘‘such applicable contribu-
tion base’’ and inserting ‘‘such contribution and
benefit base’’.
(2) Section 3121 is amended by striking sub-
section (x).
(b) SELF-EMPLOYMENT TAX.—
(1) Subsection (b) of section 1402 is amended—
(A) by striking ‘‘that part of the net’’ in
paragraph (1) and inserting ‘‘in the case of the
tax imposed by section 1401(a), that part of the
net’’,
(B) by striking ‘‘applicable contribution
base (as determined under subsection (k))’’ in
paragraph (1) and inserting ‘‘contribution and
benefit base (as determined under section 230 of
the Social Security Act)’’,
(C) by inserting ‘‘and’’ after ‘‘section
3121(b),’’, and
(D) by striking ‘‘and (C) includes’’ and all
that follows through ‘‘3111(b)’’.
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(2) Section 1402 is amended by striking sub-
section (k).
(c) RAILROAD RETIREMENT TAX.—
(1) Subparagraph (A) of section 3231(e)(2) is
amended by adding at the end thereof the following
new clause:
‘‘(iii) HOSPITAL INSURANCE TAXES.—
Clause (i) shall not apply to—
‘‘(I) so much of the rate applica-
ble under section 3201(a) or 3221(a) as
does not exceed the rate of tax in effect
under section 3101(b), and
‘‘(II) so much of the rate applica-
ble under section 3211(a)(1) as does
not exceed the rate of tax in effect
under section 1401(b).’’
(2) Clause (i) of section 3231(e)(2)(B) is amend-
ed to read as follows:
‘‘(i) TIER 1 TAXES.—Except as pro-
vided in clause (ii), the term ‘applicable
base’ means for any calendar year the con-
tribution and benefit base determined under
section 230 of the Social Security Act for
such calendar year.’’
(d) TECHNICAL AMENDMENTS.—
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(1) Paragraph (1) of section 6413(c) is amended
by striking ‘‘section 3101 or section 3201’’ and insert-
ing ‘‘section 3101(a) or section 3201(a) (to the extent
of so much of the rate applicable under section
3201(a) as does not exceed the rate of tax in effect
under section 3101(a))’’.
(2) Subparagraphs (B) and (C) of section
6413(c)(2) are each amended by striking ‘‘section
3101’’ each place it appears and inserting ‘‘section
3101(a)’’.
(3) Subsection (c) of section 6413 is amended by
striking paragraph (3).
(4) Sections 3122 and 3125 are each amended by
striking ‘‘applicable contribution base limitation’’
and inserting ‘‘contribution and benefit base limita-
tion’’.
(e) EFFECTIVE DATE.—The amendments made by this
section shall apply to 1994 and later calendar years.
SEC. 8208. TOP ESTATE AND GIFT TAX RATES MADE PERMA-
NENT.
(a) GENERAL RULE.—The table contained in para-
graph (1) of section 2001(c) is amended by striking the last
item and inserting the following new items:
‘‘Over $2,500,000 but not over
$3,000,000.
$1,025,800, plus 53% of the excess over
$2,500,000.
Over $3,000,000 ................................
$1,290,800, plus 55% of the excess over
$3,000,000.’’
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(b) CONFORMING AMENDMENTS.—
(1) Subsection (c) of section 2001 is amended by
striking paragraph (2) and by redesignating para-
graph (3) as paragraph (2).
(2) Paragraph (2) of section 2001(c), as redesig-
nated by paragraph (1), is amended by striking
‘‘($18,340,000 in the case of decedents dying, and
gifts made, after 1992)’’.
(3) The last sentence of section 2101(b) is
amended by striking ‘‘section 2001(c)(3)’’ and insert-
ing ‘‘section 2001(c)(2)’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply in the case of decedents dying, and gifts
made, after December 31, 1992.
SEC. 8209. REDUCTION IN DEDUCTIBLE PORTION OF BUSI-
NESS MEALS AND ENTERTAINMENT.
(a) GENERAL RULE.—Paragraph (1) of section 274(n)
(relating to only 80 percent of meal and entertainment ex-
penses allowed as deduction) is amended by striking ‘‘80
percent’’ and inserting ‘‘50 percent’’.
(b) SUBSTANTIATION REQUIREMENT.—In the case of
taxable years beginning after December 31, 1993, Treasury
Regulation § 1.274–5T(c)(2)(iii)(B) shall be applied by sub-
stituting ‘‘$20’’ for ‘‘$25’’.
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(c) CONFORMING AMENDMENT.—The subsection head-
ing for section 274(n) is amended by striking ‘‘80’’ and in-
serting ‘‘50’’.
(d) EFFECTIVE DATE.—The amendments made by this
section shall apply to taxable years beginning after Decem-
ber 31, 1993.
SEC. 8209A. SENSE OF THE SENATE RELATING TO THE DE-
DUCTIBILITY OF BUSINESS MEALS AND EN-
TERTAINMENT EXPENSES.
(a) FINDINGS.—The Congress finds the following:
(1) That—
(A) travel and tourism is the third largest
retail industry in the United States and ac-
counts for 11 percent of the total value of goods
and services exported by the United States;
(B) in 1992, the tourism industry produced
revenues in the amount of $369,000,000,000
which produced $44,000,000,000 in tax revenues;
and
(C) of such tax revenues, the Federal Gov-
ernment received $24,000,000,000.
(2) The restaurant industry provides thousands
of jobs in the United States.
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(3) The American performing arts community
supports, develops, and exports world-class perform-
ing arts.
(4) The reduction in the rate of the tax deduct-
ibility of business meals and entertainment expenses
from 80 percent to 50 percent may have a negative
impact on the United States restaurant, entertain-
ment, and tourism industries.
(5) Any loss of revenues due to the reduction de-
scribed in paragraph (4) may result in the loss of jobs
in the restaurant, entertainment, and tourism indus-
tries, many of which are filled by young individuals
in their first jobs and by members of minority groups.
(6) The unemployment rate among individuals
and members described in paragraph (5) greatly ex-
ceeds the national unemployment rate of 6.9 percent.
(b) SENSE OF THE SENATE.—It is the sense of the Sen-
ate that the conferees with respect to this title will make
every effort to reduce or eliminate the proposed reduction
in the deductibility of business meals and entertainment ex-
penses.
SEC. 8210. ELIMINATION OF DEDUCTION FOR CLUB MEM-
BERSHIP FEES.
(a) IN GENERAL.—Subsection (a) of section 274 (relat-
ing to disallowance of certain entertainment, etc., expenses)
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is amended by adding at the end thereof the following new
paragraph:
‘‘(3) DENIAL OF DEDUCTION FOR CLUB DUES.—
Notwithstanding the preceding provisions of this sub-
section, no deduction shall be allowed under this
chapter for amounts paid or incurred for membership
in any club organized for business, pleasure, recre-
ation, or other social purpose.’’
(b) EXCEPTION FOR EMPLOYEE RECREATIONAL EX-
PENSES NOT TO APPLY.—Paragraph (4) of section 274(e)
is amended by adding at the end thereof the following: ‘‘This
paragraph shall not apply for purposes of subsection
(a)(3).’’
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to amounts paid or incurred after De-
cember 31, 1993.
SEC. 8211. DISALLOWANCE OF DEDUCTION FOR CERTAIN
EMPLOYEE REMUNERATION IN EXCESS OF
$1,000,000.
(a) GENERAL RULE.—Section 162 (relating to trade
or business expenses) is amended by redesignating sub-
section (m) as subsection (n) and by inserting after sub-
section (l) the following new subsection:
‘‘(m) CERTAIN EXCESSIVE EMPLOYEE REMUNERA-
TION.—
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‘‘(1) IN GENERAL.—In the case of any publicly
held corporation, no deduction shall be allowed under
this chapter for applicable employee remuneration
with respect to any covered employee to the extent
that the amount of such remuneration for the taxable
year with respect to such employee exceeds $1,000,000.
‘‘(2) PUBLICLY HELD CORPORATION.—For pur-
poses of this subsection, the term ‘publicly held cor-
poration’ means any corporation issuing any class of
common equity securities required to be registered
under section 12 of the Securities Exchange Act of
1934.
‘‘(3) COVERED EMPLOYEE.—For purposes of this
subsection, the term ‘covered employee’ means any
employee of the taxpayer if—
‘‘(A) as of the close of the taxable year, such
employee is the chief executive officer of the tax-
payer or is an individual acting in such a ca-
pacity, or
‘‘(B) the total compensation for the taxable
year of such employee is required to be reported
to shareholders under the Securities Exchange
Act of 1934 by reason of such employee being
among the 4 highest compensated officers for the
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taxable year (other than the chief executive offi-
cer).
‘‘(4) APPLICABLE EMPLOYEE REMUNERATION.—
For purposes of this subsection—
‘‘(A) IN
GENERAL.—Except as otherwise
provided in this paragraph, the term ‘applicable
employee remuneration’ means, with respect to
any covered employee for any taxable year, the
aggregate amount allowable as a deduction
under this chapter for such taxable year (deter-
mined without regard to this subsection) for re-
muneration for services performed by such em-
ployee (whether or not during the taxable year).
‘‘(B) EXCEPTION FOR REMUNERATION PAY-
ABLE ON COMMISSION BASIS.—The term ‘appli-
cable employee remuneration’ shall not include
any remuneration payable on a commission
basis solely on account of income generated di-
rectly by the individual performance of the indi-
vidual to whom such remuneration is payable.
‘‘(C) OTHER
PERFORMANCE-BASED
COM-
PENSATION.—The term ‘applicable employee re-
muneration’ shall not include any remuneration
payable solely on account of the attainment of
one or more performance goals, but only if—
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‘‘(i) the performance goals are deter-
mined by a compensation committee of the
board of directors of the taxpayer which is
comprised solely of 2 or more outside direc-
tors,
‘‘(ii) the material terms under which
the remuneration is to be paid, including
the performance goals, are disclosed to
shareholders and approved by a majority of
the vote in a separate shareholder vote be-
fore the payment of such remuneration, and
‘‘(iii) before any payment of such re-
muneration, the compensation committee re-
ferred to in clause (i) certifies that the per-
formance goals and any other material
terms were in fact satisfied.
‘‘(D) EXCEPTION
FOR
EXISTING
BINDING
CONTRACTS.—The term ‘applicable employee re-
muneration’ shall not include any remuneration
payable under a written binding contract which
was in effect on February 17, 1993, and which
was not modified thereafter in any material re-
spect before such remuneration is paid.
‘‘(E) REMUNERATION.—For purposes of this
paragraph, the term ‘remuneration’ includes any
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remuneration (including benefits) in any me-
dium other than cash, but shall not include—
‘‘(i) any payment referred to in so
much of section 3121(a)(5) as precedes sub-
paragraph (E) thereof, and
‘‘(ii) any benefit provided to or on be-
half of an employee if at the time such bene-
fit is provided it is reasonable to believe
that the employee will be able to exclude
such benefit from gross income under this
chapter.
For purposes of clause (i), section 3121(a)(5)
shall be applied without regard to section
3121(v)(1).
‘‘(F) COORDINATION
WITH
DISALLOWED
GOLDEN
PARACHUTE
PAYMENTS.—The dollar
limitation contained in paragraph (1) shall be
reduced (but not below zero) by the amount (if
any) which would have been included in the ap-
plicable employee remuneration of the covered
employee for the taxable year but for being dis-
allowed under section 280G.’’
(b) EFFECTIVE DATE.—The amendment made by sub-
section (a) shall apply to amounts which would otherwise
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be deductible for taxable years beginning on or after Janu-
ary 1, 1994.
SEC. 8212. REDUCTION IN COMPENSATION TAKEN INTO AC-
COUNT IN DETERMINING CONTRIBUTIONS
AND BENEFITS UNDER QUALIFIED RETIRE-
MENT PLANS.
(a) QUALIFICATION REQUIREMENT.—
(1) IN GENERAL.—Section 401(a)(17) is amend-
ed—
(A) by striking ‘‘$200,000’’ in the first sen-
tence and inserting ‘‘$150,000’’,
(B) by striking the second sentence, and
(C) by adding at the end the following new
subparagraph:
‘‘(B) COST-OF-LIVING ADJUSTMENT.—
‘‘(i) IN
GENERAL.—If, for any cal-
endar year after 1994, the excess (if any)
of—
‘‘(I) $150,000, increased by the
cost-of-living adjustment for the cal-
endar year, over
‘‘(II) the dollar amount in effect
under subparagraph (A) for taxable
years beginning in the calendar year,
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is equal to or greater than $10,000, then the
$150,000 amount under subparagraph (A)
(as previously adjusted under this subpara-
graph) for any taxable year beginning in
any subsequent calendar year shall be in-
creased by $10,000.
‘‘(ii) COST-OF-LIVING
ADJUSTMENT.—
The cost-of-living adjustment for any cal-
endar year shall be the adjustment made
under section 415(d) for such calendar year,
except that the base period for purposes of
section 415(d)(1)(A) shall be the calendar
quarter beginning October 1, 1993.’’
(2) 
CONFORMING
AMENDMENT.—Section
401(a)(17) is amended by striking ‘‘(17) A trust’’ and
inserting:
‘‘(17) COMPENSATION LIMIT.—
‘‘(A) IN GENERAL.—A trust’’.
(b) SIMPLIFIED EMPLOYEE PENSIONS.—
(1) 
IN
GENERAL.—Paragraphs 
(3)(C) 
and
(6)(D)(ii) of section 408(k) are each amended by
striking ‘‘$200,000’’ and inserting ‘‘$150,000’’.
(2) COST-OF-LIVING.—Paragraph (8) of section
408(k) is amended to read as follows:
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‘‘(8) COST-OF-LIVING
ADJUSTMENT.—The Sec-
retary shall adjust the $300 amount in paragraph
(2)(C) at the same time and in the same manner as
under section 415(d) and shall adjust the $150,000
amount in paragraphs (3)(C) and (6)(D)(ii) at the
same time, and by the same amount, as the adjust-
ment under section 401(a)(17)(B).’’
(c) OTHER RELATED PROVISIONS.—
(1) IN GENERAL.—Sections 404(l) and 505(b)(7)
are each amended—
(A) by striking ‘‘$200,000’’ in the first sen-
tence and inserting ‘‘$150,000’’, and
(B) by striking the second sentence and in-
serting ‘‘The Secretary shall adjust the $150,000
amount at the same time, and by the same
amount, 
as 
the 
adjustment 
under 
section
401(a)(17)(B).’’
(2) CONFORMING AMENDMENT.—The heading for
section 505(b)(7) is amended by striking ‘‘$200,000’’.
(d) EFFECTIVE DATES.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section shall
apply to benefits accruing in plan years beginning
after December 31, 1993.
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(2) EXCEPTION FOR COLLECTIVELY BARGAINED
PLANS.—In the case of a plan maintained pursuant
to 1 or more collective bargaining agreements between
employee representatives and 1 or more employers
ratified before the date of the enactment of this Act,
the amendments made by this section shall not apply
to contributions or benefits pursuant to such agree-
ments for plan years beginning before the earlier of—
(A) the latest of—
(i) January 1, 1994,
(ii) the date on which the last of such
collective bargaining agreements terminates
(without regard to any extension, amend-
ment, or modification of such agreements on
or after such date of enactment), or
(iii) in the case of a plan maintained
pursuant to collective bargaining under the
Railway Labor Act, the date of execution of
an extension or replacement of the last of
such collective bargaining agreements in ef-
fect on such date of enactment, or
(B) January 1, 1997.
(3) TRANSITION RULE FOR STATE AND LOCAL
PLANS.—
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(A) IN GENERAL.—In the case of an eligible
participant in a governmental plan (within the
meaning of section 414(d) of the Internal Reve-
nue Code of 1986), the dollar limitation under
section 401(a)(17) of such Code shall not apply
to the extent the amount of compensation which
is allowed to be taken into account under the
plan would be reduced below the amount which
was allowed to be taken into account under the
plan as in effect on July 1, 1993.
(B) ELIGIBLE PARTICIPANT.—For purposes
of subparagraph (A), an eligible participant is
an individual who first became a participant in
the plan during a plan year beginning before the
1st plan year beginning after the earlier of—
(i) the plan year in which the plan is
amended to reflect the amendments made by
this section, or
(ii) December 31, 1995.
(C) PLAN MUST BE AMENDED TO INCOR-
PORATE
LIMITS.—This paragraph shall not
apply to any eligible participant of a plan un-
less the plan is amended so that the plan incor-
porates by reference the dollar limitation under
section 401(a)(17) of the Internal Revenue Code
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of 1986, effective with respect to noneligible par-
ticipants for plan years beginning after Decem-
ber 31, 1995 (or earlier if the plan amendment
so provides).
SEC. 8213. MODIFICATION TO DEDUCTION FOR CERTAIN
MOVING EXPENSES.
(a) DOLLAR LIMITATION.—
(1) IN
GENERAL.—Paragraph (3) of section
217(b) is amended by striking subparagraphs (A) and
(B) and inserting the following:
‘‘(A) DOLLAR LIMIT.—
‘‘(i) 
IN
GENERAL.—The 
aggregate
amount allowable as a deduction under sub-
section (a) in connection with a commence-
ment of work shall not exceed $10,000, of
which the aggregate amount which is attrib-
utable to expenses described in subpara-
graph (C) or (D) of paragraph (1) shall not
exceed $1,500.
‘‘(ii) COST-OF-LIVING
ADJUSTMENT.—
In the case of taxable years beginning in
calendar years after 1994, the $10,000
amount under clause (i) shall be increased
by an amount equal to the product of such
dollar amount and the cost-of-living adjust-
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ment determined under section 1(f)(3) for
the calendar year in which the taxable year
begins, except that section 1(f)(3)(B) shall
be applied by substituting ‘1993’ for ‘1992’.
Any amount determined under this clause
which is not a multiple of $50 shall be
rounded to the next lowest multiple of $50.
‘‘(B) HUSBAND AND WIFE.—If a husband
and wife both commence work at a new prin-
cipal place of work within the same general loca-
tion, subparagraph (A) shall be applied as if
there was only 1 commencement of work. In the
case of a husband and wife filing separate re-
turns, subparagraph (A) shall be applied by sub-
stituting ‘$5,000’ for ‘$10,000’ and ‘$750’ for
‘$1,500’.’’
(2) FOREIGN MOVES.—Paragraph (1) of section
217(h) is amended by striking subparagraphs (B) and
(C) and inserting:
‘‘(B) subsection (b)(2)(A) shall be applied
by substituting ‘$4,500’ for ‘$1,500’, and
‘‘(C) subsection (b)(2)(B) shall be applied as
if the last sentence of such subsection read as fol-
lows: ‘In the case of a husband and wife filing
separate returns, subparagraph (A) (as modified
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by subsection (h)(1)(B)) shall be applied by sub-
stituting ‘‘$2,250’’ for ‘‘$4,500’’.’.’’
(b) REPEAL OF DEDUCTION FOR QUALIFIED RESI-
DENCE SALE, ETC., EXPENSES.—
(1) IN
GENERAL.—Paragraph (1) of section
217(b) (defining moving expenses) is amended by in-
serting ‘‘or’’ at the end of subparagraph (C), by strik-
ing ‘‘, or’’ at the end of subparagraph (D) and in-
serting 
a 
period, 
and 
by 
striking
subparagraph (E).
(2) CONFORMING AMENDMENTS.—
(A) Subsection (b) of section 217, as
amended by subsection (a), is amended by strik-
ing paragraph (2) and redesignating paragraph
(3) as paragraph (2).
(B) Section 217 is amended by striking sub-
section (e).
(c) DEDUCTION DISALLOWED FOR MEAL EXPENSES.—
Paragraph (1) of section 217(b) is amended—
(1) by striking ‘‘meals and lodging’’ in subpara-
graphs (B), (C) and (D) and inserting ‘‘lodging’’, and
(2) by adding at the end thereof the following
new sentence:
‘‘Such term shall not include any expenses for meals.’’
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(d) EFFECTIVE DATE.—The amendments made by this
section shall apply to expenses incurred after December 31,
1993.
SEC. 8214. SIMPLIFICATION OF INDIVIDUAL ESTIMATED
TAX SAFE HARBOR BASED ON LAST YEAR’S
TAX.
(a) IN GENERAL.—Paragraph (1) of section 6654(d)
(relating to amount of required estimated tax installments)
is amended by striking subparagraphs (C), (D), (E), and
(F) and by inserting the following new subparagraph:
‘‘(C) LIMITATION
ON
USE
OF
PRECEDING
YEAR’S TAX.—
‘‘(i) IN
GENERAL.—If the adjusted
gross income shown on the return of the in-
dividual for the preceding taxable year ex-
ceeds $150,000, clause (ii) of subparagraph
(B) shall be applied by substituting ‘110
percent’ for ‘100 percent’.
‘‘(ii) SEPARATE
RETURNS.—In the
case of a married individual (within the
meaning of section 7703) who files a sepa-
rate return for the taxable year for which
the amount of the installment is being de-
termined, clause (i) shall be applied by sub-
stituting ‘$75,000’ for ‘$150,000’.
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‘‘(iii) SPECIAL RULE.—In the case of
an estate or trust, adjusted gross income
shall be determined as provided in section
67(e).’’
(b) CONFORMING AMENDMENTS.—
(1) Subparagraph (A) of section 6654(j)(3) is
amended by striking ‘‘and subsection (d)(1)(C)(iii)
shall not apply’’.
(2) Paragraph (4) of section 6654(l) is amended
by striking ‘‘paragraphs (1)(C)(iv) and (2)(B)(i) of
subsection 
(d)’’ 
and 
inserting 
‘‘subsection
(d)(2)(B)(i)’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to taxable years beginning after Decem-
ber 31, 1993.
SEC. 8215. SOCIAL SECURITY AND TIER 1 RAILROAD RE-
TIREMENT BENEFITS.
(a) ADDITIONAL
INCLUSION
FOR
CERTAIN
TAX-
PAYERS.—
(1) IN GENERAL.—Subsection (a) of section 86
(relating to social security and tier 1 railroad retire-
ment benefits) is amended by adding at the end the
following new paragraph:
‘‘(2) ADDITIONAL AMOUNT.—In the case of a tax-
payer with respect to whom the amount determined
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under subsection (b)(1)(A) exceeds the adjusted base
amount, the amount included in gross income under
this section shall be equal to the lesser of—
‘‘(A) the sum of—
‘‘(i) 85 percent of such excess, plus
‘‘(ii) the lesser of the amount deter-
mined under paragraph (1) or an amount
equal to one-half of the difference between
the adjusted base amount and the base
amount of the taxpayer, or
‘‘(B) 85 percent of the social security bene-
fits received during the taxable year.’’
(2) CONFORMING AMENDMENTS.—Subsection (a)
of section 86 is amended—
(A) by striking ‘‘Gross’’ and inserting:
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), gross’’, and
(B) by redesignating paragraphs (1) and
(2) as subparagraphs (A) and (B), respectively.
(b) ADJUSTED BASE AMOUNT.—Section 86(c) (defin-
ing base amount) is amended to read as follows:
‘‘(c) BASE AMOUNT AND ADJUSTED BASE AMOUNT.—
For purposes of this section—
‘‘(1) BASE AMOUNT.—The term ‘base amount’
means—
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‘‘(A) except as otherwise provided in this
paragraph, $25,000,
‘‘(B) $32,000 in the case of a joint return,
and
‘‘(C) zero in the case of a taxpayer who—
‘‘(i) is married as of the close of the
taxable year (within the meaning of section
7703) but does not file a joint return for
such year, and
‘‘(ii) does not live apart from his
spouse at all times during the taxable year.
‘‘(2) ADJUSTED BASE AMOUNT.—The term ‘ad-
justed base amount’ means—
‘‘(A) except as otherwise provided in this
paragraph, $32,000,
‘‘(B) $40,000 in the case of a joint return,
and
‘‘(C) zero in the case of a taxpayer described
in paragraph (1)(C).’’
(c) TRANSFERS TO THE HOSPITAL INSURANCE TRUST
FUND.—
(1) IN
GENERAL.—Paragraph (1) of section
121(e) of the Social Security Amendments of 1983
(Public Law 92–21) is amended by—
(A) striking ‘‘There’’ and inserting:
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‘‘(A) There’’;
(B) inserting ‘‘(i)’’ immediately following
‘‘amounts equivalent to’’; and
(C) striking the period and inserting the
following: ‘‘, less (ii) the amounts equivalent to
the aggregate increase in tax liabilities under
chapter 1 of the Internal Revenue Code of 1986
which is attributable to the amendments to sec-
tion 86 of such Code made by section 8215 of the
Revenue Reconciliation Act of 1993.
‘‘(B) There are hereby appropriated to the
hospital insurance trust fund amounts equal to
the increase in tax liabilities described in sub-
paragraph (A)(ii). Such appropriated amounts
shall be transferred from the general fund of the
Treasury on the basis of estimates of such tax li-
abilities made by the Secretary of the Treasury.
Transfers shall be made pursuant to a schedule
made by the Secretary of the Treasury that takes
into account estimated timing of collection of
such liabilities.’’
(2) DEFINITION.—Paragraph (3) of section
121(e) of such Act is amended by redesignating sub-
paragraph (B) as subparagraph (C), and by inserting
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after subparagraph (A) the following new subpara-
graph:
‘‘(B) HOSPITAL INSURANCE TRUST FUND.—
The term ‘hospital insurance trust fund’ means
the fund established pursuant to section 1817 of
the Social Security Act.’’.
(3) CONFORMING AMENDMENT.—Paragraph (2)
of section 121(e) of such Act is amended in the first
sentence by striking ‘‘paragraph (1)’’ and inserting
‘‘paragraph (1)(A).’’
(4) 
TECHNICAL
AMENDMENTS.—Paragraph
(1)(A) of section 121(e) of such Act, as redesignated
and amended by paragraph (1), is amended by strik-
ing ‘‘1954’’ and inserting ‘‘1986’’.
(d) EFFECTIVE DATE.—The amendments made by
subsections (a) and (b) shall apply to taxable years begin-
ning after December 31, 1993.
PART II—PROVISIONS AFFECTING BUSINESSES
SEC. 8221. INCREASE IN TOP MARGINAL RATE UNDER SEC-
TION 11.
(a) GENERAL RULE.—Paragraph (1) of section 11(b)
(relating to amount of tax) is amended—
(1) by striking ‘‘and’’ at the end of subpara-
graph (B),
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(2) by striking subparagraph (C) and inserting
the following:
‘‘(C) 34 percent of so much of the taxable
income as exceeds $75,000 but does not exceed
$10,000,000, and
‘‘(D) 35 percent of so much of the taxable
income as exceeds $10,000,000.’’, and
(3) by adding at the end thereof the following
new sentence: ‘‘In the case of a corporation which has
taxable income in excess of $15,000,000, the amount
of the tax determined under the foregoing provisions
of this paragraph shall be increased by an additional
amount equal to the lesser of (i) 3 percent of such ex-
cess, or (ii) $100,000.’’
(b) CERTAIN PERSONAL SERVICE CORPORATIONS.—
Paragraph (2) of section 11(b) is amended by striking ‘‘34
percent’’ and inserting ‘‘35 percent’’.
(c) CONFORMING AMENDMENTS.—
(1) Clause (iii) of section 852(b)(3)(D) is amend-
ed by striking ‘‘66 percent’’ and inserting ‘‘65 per-
cent’’.
(2) Subsection (a) of section 1201 is amended by
striking ‘‘34 percent’’ each place it appears and in-
serting ‘‘35 percent’’.
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(3) Paragraphs (1) and (2) of section 1445(e)
are each amended by striking ‘‘34 percent’’ and in-
serting ‘‘35 percent’’.
(d) EFFECTIVE DATE.—The amendments made by this
section shall apply to taxable years beginning on or after
January 1, 1993; except that the amendment made by sub-
section (c)(3) shall take effect on the date of the enactment
of this Act.
SEC. 8222. DISALLOWANCE OF DEDUCTION FOR LOBBYING
EXPENDITURES.
(a) DISALLOWANCE OF DEDUCTION.—
(1) IN GENERAL.—Part IX of subchapter B of
chapter 1 (relating to items not deductible) is amend-
ed by adding at the end the following new section:
‘‘SEC. 280I. LOBBYING EXPENDITURES.
‘‘(a) DEDUCTION DISALLOWED.—No deduction shall be
allowed under this chapter for any amount paid or in-
curred—
‘‘(1) for lobbying activities, or
‘‘(2) to another person for the conduct of lobby-
ing activities.
‘‘(b) LOBBYING ACTIVITIES.—For purposes of this sec-
tion—
‘‘(1) IN GENERAL.—The term ‘lobbying activity’
means—
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which are paid or incurred by the organization
during such calendar year, and
‘‘(B) amounts which are not deductible
under subsection (a) shall be treated as paid first
out of dues or other similar amounts.
‘‘(4) REPORTING REQUIREMENTS.—
‘‘For requirements of organization to notify con-
tributors, see section 6050O.
‘‘(e) OTHER RULES AND DEFINITIONS.—For purposes
of this section—
‘‘(1) SPECIAL RULE FOR CERTAIN TAXPAYERS.—
In the case of—
‘‘(A) any taxpayer engaged in the trade or
business of conducting activities described in
subsection (a), or
‘‘(B) any taxpayer who is an employee who
is reimbursed by his employer for expenses in-
curred in conducting such activities,
subsection (a) shall not apply to expenditures of the
taxpayer in conducting such activities on behalf of
another person or his employer (but shall apply to
payments by such other person or the employer to the
taxpayer for conducting the activities).
‘‘(2) AGENCY.—The term ‘agency’ has the same
meaning given such term by section 551(1) of title 5,
United States Code.
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‘‘(B) partnership or beneficial ownership
interest in a widely held or publicly traded part-
nership or trust;
‘‘(C) note, bond, debenture, or other evidence
of indebtedness;
‘‘(D) interest rate, currency, or equity no-
tional principal contract;
‘‘(E) evidence of an interest in, or a deriva-
tive financial instrument in, any security de-
scribed in subparagraph (A), (B), (C), or (D), or
any currency, including any option, forward
contract, short position, and any similar finan-
cial instrument in such a security or currency;
and
‘‘(F) position which—
‘‘(i) is not a security described in sub-
paragraph (A), (B), (C), (D), or (E),
‘‘(ii) is a hedge with respect to such a
security, and
‘‘(iii) is clearly identified in the deal-
er’s records as being described in this sub-
paragraph before the close of the day on
which it was acquired or entered into (or
such other time as the Secretary may by
regulations prescribe).
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rity was listed in such quotation sys-
tem and ending on such date).
SEC. 8224. CLARIFICATION OF TREATMENT OF CERTAIN
FSLIC FINANCIAL ASSISTANCE.
(a) GENERAL RULE.—For purposes of chapter 1 of the
Internal Revenue Code of 1986—
(1) any FSLIC assistance with respect to any
loss of principal, capital, or similar amount upon the
disposition of any asset shall be taken into account as
compensation for such loss for purposes of section 165
of such Code, and
(2) any FSLIC assistance with respect to any
debt shall be taken into account for purposes of sec-
tion 166, 585, or 593 of such Code in determining
whether such debt is worthless (or the extent to which
such debt is worthless) and in determining the
amount of any addition to a reserve for bad debts
arising from the worthlessness or partial worthlessness
of such debts.
(b) FSLIC ASSISTANCE.—For purposes of this section,
the term ‘‘FSLIC assistance’’ means any assistance (or
right to assistance) with respect to a domestic building and
loan association (as defined in section 7701(a)(19) of such
Code without regard to subparagraph (C) thereof) under
section 406(f) of the National Housing Act or section 21A