I
106TH CONGRESS
1ST SESSION
H. R. 2414
To amend the Internal Revenue Code of 1986 to eliminate certain particularly
unfair tax provisions, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JULY 1, 1999
Mr. TANCREDO (for himself, Mr. SCHAFFER, Mr. BURTON of Indiana, and
Mr. BARR of Georgia) introduced the following bill; which was referred
to the Committee on Ways and Means, and in addition to the Committee
on Commerce, for a period to be subsequently determined by the Speaker,
in each case for consideration of such provisions as fall within the juris-
diction of the committee concerned
A BILL
To amend the Internal Revenue Code of 1986 to eliminate
certain particularly unfair tax provisions, and for other
purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Top Ten Terrible Tax Act of 1999’’.
(b) AMENDMENT OF 1986 CODE.—Except as other-
wise expressly provided, whenever in this Act an amend-
ment or repeal is expressed in terms of an amendment
to, or repeal of, a section or other provision, the reference
shall be considered to be made to a section or other provi-
sion of the Internal Revenue Code of 1986.
(c) TABLE OF CONTENTS.—
Sec. 1. Short title.
Sec. 2. Repeal over 10 years of estate and gift taxes.
Sec. 3. Repeal of universal service charge.
Sec. 4. Repeal of excise tax on telephone and other communications services.
Sec. 5. Repeal of marriage penalty in individual income tax rates and standard
deduction.
Sec. 6. Repeal over 10 years of capital gains tax on individuals.
Sec. 7. Repeal of excise tax on vaccines.
Sec. 8. Repeal of excise tax on sport fishing equipment.
Sec. 9. Repeal of 1993 income tax increase on social security benefits.
Sec. 10. Repeal of double taxation on interest and dividends.
Sec. 11. Repeal of 1993 increases in motor fuel taxes.
SEC. 2. REPEAL OVER 10 YEARS OF ESTATE AND GIFT
TAXES.
(a) REPEAL OF ESTATE AND GIFT TAXES.—Subtitle
B (relating to estate and gift taxes) is repealed effective
with respect to estates of decedents dying, and gifts made,
after December 31, 2009.
(b) PHASEOUT OF TAX.—Subsection (c) of section
2001 (relating to imposition and rate of tax) is amended
by adding at the end the following new paragraph:
‘‘(3) PHASEOUT OF TAX.—In the case of es-
tates of decedents dying, and gifts made, during any
calendar year after 1999 and before 2010—
‘‘(A) IN
GENERAL.—The tentative tax
under this subsection shall be determined by
using a table prescribed by the Secretary (in
lieu of using the table contained in paragraph
(1)) which is the same as such table; except
that—
‘‘(i) each of the rates of tax shall be
reduced (but not below zero) by the num-
ber of percentage points determined under
subparagraph (B), and
‘‘(ii) the amounts setting forth the tax
shall be adjusted to the extent necessary to
reflect the adjustments under clause (i).
‘‘(B) PERCENTAGE
POINTS
OF
REDUC-
TION.—
The number of
‘‘For calendar year:
percentage points is:
2000 .........................................................................................
2001 .........................................................................................
2002 .........................................................................................
2003 .........................................................................................
2004 .........................................................................................
2005 .........................................................................................
2006 .........................................................................................
2007 .........................................................................................
2008 .........................................................................................
2009 .........................................................................................
50.
‘‘(C) COORDINATION
WITH
PARAGRAPH
(2).—Paragraph (2) shall be applied by reduc-
ing the 55 percent percentage contained therein
by the number of percentage points determined
for such calendar year under subparagraph (B).
‘‘(D) COORDINATION
WITH
CREDIT
FOR
STATE
DEATH
TAXES.—Rules similar to the
rules of subparagraph (A) shall apply to the
table contained in section 2011(b) except that
(3) in paragraph (3), by striking ‘‘public insti-
tutional telecommunications user’’ and inserting
‘‘health care provider’’;
(4) in paragraph (4), by striking ‘‘, is a school’’
and all that follows through ‘‘Act’’; and
(5) in paragraph (5)—
(A) by striking subparagraphs (A) and
(C); and
(B) by redesignating subparagraph (B) as
subparagraph (A).
(b) UNIVERSAL
SERVICE
PRINCIPLES.—Section
254(b)(6) of the Communications Act of 1934 (47 U.S.C.
254(b)(6)) is amended—
(1) in the paragraph heading, by striking
‘‘SCHOOLS, HEALTH CARE, AND LIBRARIES’’ and in-
serting ‘‘HEALTH CARE’’; and
(2) by striking ‘‘Elementary and secondary
schools and classrooms, health care providers, and li-
braries’’ and inserting ‘‘Health care providers’’.
(c) SPECIAL SERVICES.—Section 254(c)(3) of the
Communications Act of 1934 (47 U.S.C. 254(c)(3)) is
amended by striking ‘‘schools, libraries, and’’.
SEC. 4. REPEAL OF EXCISE TAX ON TELEPHONE AND
OTHER COMMUNICATIONS SERVICES.
(a) IN GENERAL.—Chapter 33 (relating to facilities
and services) is amended by striking subchapter B.
(b) CONFORMING AMENDMENTS.—
(1) Section 4293 is amended by striking ‘‘chap-
ter 32 (other than the taxes imposed by sections
4064 and 4121) and subchapter B of chapter 33,’’
and inserting ‘‘and chapter 32 (other than the taxes
imposed by sections 4064 and 4121),’’.
(2)(A) Paragraph (1) of section 6302(e) is
amended by striking ‘‘section 4251 or’’.
(B) Paragraph (2) of section 6302(e) is
amended—
(i) by striking ‘‘imposed by—’’ and all that
follows through ‘‘with respect to’’ and inserting
‘‘imposed by section 4261 or 4271 with respect
to’’, and
(ii) by striking ‘‘bills rendered or’’.
(C) The subsection heading for section 6302(e)
is amended by striking ‘‘COMMUNICATIONS SERV-
ICES AND’’.
(3) Section 6415 is amended by striking ‘‘4251,
4261, or 4271’’ each place it appears and inserting
‘‘4261 or 4271’’.
(4) Paragraph (2) of section 7871(a) is amend-
ed by inserting ‘‘or’’ at the end of subparagraph
(B), by striking subparagraph (C), and by redesig-
nating subparagraph (D) as subparagraph (C).
(5) The table of subchapters for chapter 33 is
amended by striking the item relating to subchapter
B.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to amounts paid pursuant to bills
first rendered more than 90 days after the date of the
enactment of this Act.
SEC. 5. REPEAL OF MARRIAGE PENALTY IN INDIVIDUAL IN-
COME TAX RATES AND STANDARD DEDUC-
TION.
(a) RATES.—Section 1 (relating to tax imposed) is
amended by striking subsections (a) through (e) and in-
serting the following:
‘‘(a) MARRIED INDIVIDUALS FILING JOINT RETURNS
AND SURVIVING SPOUSES.—There is hereby imposed on
the taxable income of—
‘‘(1) every married individual (as defined in sec-
tion 7703) who makes a single return jointly with
his spouse under section 6013, and
‘‘(2) every surviving spouse (as defined in sec-
tion 2(a)),
a tax determined in accordance with the following table:
‘‘If taxable income is:
The tax is:
Not over $51,500 ..........................
15% of taxable income.
Over 
$51,500 
but 
not 
over
$124,900.
$7,725, plus 28% of the excess over
$51,500.
Over 
$124,900 
but 
not 
over
$260,500.
$28,277, plus 31% of the excess over
$124,900.
Over 
$260,500 
but 
not 
over
$566,300.
$70,313, plus 36% of the excess over
$260,500.
Over $566,300................ ...............
$180,401, plus 39.6% of the excess
over $566,300.
‘‘(b) HEADS OF HOUSEHOLDS.—There is hereby im-
posed on the taxable income of every head of a household
(as defined in section 2(b)) a tax determined in accordance
with the following table:
‘‘If taxable income is:
The tax is:
Not over $34,550 ..........................
15% of taxable income.
Over 
$34,550 
but 
not 
over
$89,150.
$5,182.50, plus 28% of the excess
over $34,550.
Over 
$89,150 
but 
not 
over
$144,400.
$20,470.50, plus 31% of the excess
over $89,150.
Over 
$144,400 
but 
not 
over
$283,150.
$37,598, plus 36% of the excess over
$144,400.
Over $283,150 ...............................
$87,548, plus 39.6% of the excess
over $283,150.
‘‘(c) OTHER INDIVIDUALS.—There is hereby imposed
on the taxable income of every individual (other than an
individual to whom subsection (a) or (b) applies) a tax
determined in accordance with the following table:
‘‘If taxable income is:
The tax is:
Not over $25,750 ..........................
15% of taxable income.
Over 
$25,750 
but 
not 
over
$62,450.
$3,862.50, plus 28% of the excess
over $25,750.
Over 
$62,450 
but 
not 
over
$130,250.
$14,138.50, plus 31% of the excess
over $62,450.
Over 
$130,250 
but 
not 
over
$283,150.
$35,156.50, plus 36% of the excess
over $130,250.
Over $283,150 ...............................
$90,200.50, plus 39.6% of the excess
over $283,150.
‘‘(d) ESTATES AND TRUSTS.—There is hereby im-
posed on the taxable income of—
‘‘(1) every estate, and
‘‘(2) every trust,
taxable under this subsection a tax determined in accord-
ance with the following table:
‘‘If taxable income is:
The tax is:
Not over $1,750 ............................
15% of taxable income.
Over $1,750 but not over $4,050 ..
$262.50, plus 28% of the excess over
$1,750.
Over $4,050 but not over $6,200 ..
$906.50, plus 31% of the excess over
$4,050.
Over $6,200 but not over $8,450 ..
$1,573, plus 36% of the excess over
$6,200.
Over $8,450 ...................................
$2,383, plus 39.6% of the excess over
$8,450.’’.
(b) STANDARD DEDUCTION.—
(1) IN
GENERAL.—Paragraph (2) of section
63(c) (relating to standard deduction) is amended to
read as follows:
‘‘(2) BASIC STANDARD DEDUCTION.—For pur-
poses of paragraph (1), the basic standard deduction
is—
‘‘(A) $8,600 in the case of—
‘‘(i) a joint return, or
‘‘(ii) a surviving spouse (as defined in
section 2(a)),
‘‘(B) $6,350 in the case of a head of
household (as defined in section 2(b)), or
‘‘(C) $4,300 in any other case.’’
(2) TECHNICAL AMENDMENTS.—
(A) Paragraph (4) of section 63(c) is
amended to read as follows:
‘‘(4) ADJUSTMENTS
FOR
INFLATION.—In the
case of any taxable year beginning in a calendar
year after 1999, each dollar amount contained in
paragraph (2) or (5) or subsection (f) shall be in-
creased by an amount equal to—
‘‘(A) such dollar amount, multiplied by
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for the calendar
year in which the taxable year begins.’’
(B) Subparagraph (A) of section 63(c)(5)
is amended by striking ‘‘$500’’ and inserting
‘‘$700’’.
(C) Subsection (f) of section 63 is amend-
ed by striking ‘‘$600’’ each place it appears and
inserting ‘‘$850’’ and by striking ‘‘$750’’ in
paragraph (3) and inserting ‘‘$1,050’’.
(D) Subparagraph (B) of section 1(f)(6) is
amended by striking ‘‘subsection (c)(4) of sec-
tion 63 (as it applies to subsections (c)(5)(A)
and (f) of such section)’’ and inserting ‘‘section
63(c)(4)’’.
(c) CONFORMING AMENDMENTS RELATED TO INFLA-
TION ADJUSTMENT OF INCOME TAX BRACKETS.—
(1) Subsection (f) of section 1 is amended—
(A) by striking ‘‘1993’’ in paragraph (1)
and inserting ‘‘1999’’,
(B) by striking ‘‘1992’’ in paragraph
(3)(B) and inserting ‘‘1998’’, and
(C) by striking paragraph (7).
(2) The following provisions are each amended
by striking ‘‘1992’’ and inserting ‘‘1998’’ each place
it appears:
(A) Section 25A(h).
(B) Section 32(j)(1)(B).
(C) Section 41(e)(5)(C).
(D) Section 59(j)(2)(B).
(E) Section 63(c)(4)(B).
(F) Section 68(b)(2)(B).
(G) Section 135(b)(2)(B)(ii).
(H) Section 151(d)(4).
(I) Section 220(g)(2).
(J) Section 221(g)(1)(B).
(K) Section 512(d)(2)(B).
(L) Section 513(h)(2)(C)(ii).
(M) Section 685(c)(3)(B).
(N) Section 877(a)(2).
(O) Section 911(b)(2)(D)(ii)(II).
(P) Section 2032A(a)(3)(B).
(Q) Section 2503(b)(2)(B).
(R) Section 2631(c)(1)(B).
(S) Section 4001(e)(1)(B).
(T) Section 4261(e)(4)(A)(ii).
(U) Section 6039F(d).
(V) Section 6323(i)(4)(B).
(W) Section 6601(j)(3)(B).
(X) Section 7430(c)(1).
(3) Subclause (II) of section 42(h)(6)(G)(i) is
amended by striking ‘‘1987’’ and inserting ‘‘1998’’.
(4) Subparagraph (B) of section 132(f)(6) is
amended by inserting before the period ‘‘, deter-
mined by substituting ‘calendar year 1992’ for ‘cal-
endar year 1998’ in subparagraph (B) thereof’’.
(5) Sections 468B(b)(1), 511(b)(1), 641(a),
641(d)(2)(A), and 685(d) are each amended by
striking ‘‘section 1(e)’’ each place it appears and in-
serting ‘‘section 1(d)’’.
(6) Sections 1(f)(2) and 904(b)(3)(E)(ii) are
each amended by striking ‘‘(d), or (e)’’ and inserting
‘‘or (d)’’.
(7) Paragraph (1) of section 1(f) is amended by
striking ‘‘(d), and (e)’’ and inserting ‘‘and (d)’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1999.
(e) SECTION 15 NOT TO APPLY.—No amendment
made by this section shall be treated as a change in a
rate of tax for purposes of section 15 of the Internal Rev-
enue Code of 1986.
SEC. 6. REPEAL OVER 10 YEARS OF CAPITAL GAINS TAX ON
INDIVIDUALS.
(a) IN GENERAL.—Part I of subchapter P of chapter
1 (relating to treatment of capital gains) is amended by
adding at the end the following new section:
‘‘SEC. 1203. EXCLUSION OF CERTAIN AMOUNTS OF NET CAP-
ITAL GAIN OF INDIVIDUALS.
‘‘(a) GENERAL RULE.—In the case of an individual,
gross income shall not include an amount equal to the ap-
plicable percentage of the net capital gain of the taxpayer
for the taxable year.
‘‘(b) APPLICABLE PERCENTAGE.—For purposes of
subsection (a), the term ‘applicable percentage’ means the
percentage determined under the following table:
‘‘For taxable years beginning
in calendar year—
The applicable percentage is—
2000 .........................................................................................
2001 .........................................................................................
2002 .........................................................................................
2003 .........................................................................................
2004 .........................................................................................
2005 .........................................................................................
2006 .........................................................................................
‘‘For taxable years beginning
in calendar year—
The applicable percentage is—
2007 .........................................................................................
2009 .........................................................................................
2010 and thereafter .................................................................
100.’’
(b) CONFORMING AMENDMENTS.—
(1) Section 1222 is amended by adding at the
end the following new sentence:
‘‘Determinations under this section shall be made before
the application of section 1203.’’
(2) The table of sections for part I of sub-
chapter P of chapter 1 is amended by adding at the
end the following new item:
‘‘Sec. 1203. Exclusion of certain amounts of net capital gain of
individuals.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1999.
SEC. 7. REPEAL OF EXCISE TAX ON VACCINES.
(a) IN GENERAL.—Subchapter C of chapter 32 (re-
lating to certain vaccines) is hereby repealed.
(b) CONFORMING AMENDMENTS.—
(1) Subsection (a) of section 4121 is amended
by striking ‘‘In the case of the tax imposed by sec-
tion 4131, paragraphs (3), (4), and (5) shall not
apply and paragraph (2) shall apply only if the use
of the exported vaccine meets such requirements as
the Secretary may by regulations prescribe.’’.
spect to the manufacturer, producer, or im-
porter,
then such related person shall be liable for tax under
section 4161 in the same manner as if such related
person were the manufacturer of the article.
‘‘(2) CREDIT FOR TAX PREVIOUSLY PAID.—If—
‘‘(A) tax is imposed on the sale of any arti-
cle by reason of paragraph (1), and
‘‘(B) the related person establishes the
amount of the tax which was paid on the sale
described in paragraph (1)(A), the amount of
the tax so paid shall be allowed as a credit
against the tax imposed by reason of paragraph
(1).
‘‘(3) RELATED PERSON.—For purposes of this
subsection, the term ‘related person’ has the mean-
ing given such term by section 465(b)(3)(C).
‘‘(4) REGULATIONS.—Except to the extent pro-
vided in regulations, rules similar to the rules of this
subsection shall also apply in cases (not described in
paragraph (1)) in which intermediaries or other de-
vices are used for purposes of reducing the amount
of the tax imposed by section 4161(a).’’
(b) CLERICAL AMENDMENT.—The item relating to
subchapter D in the table of subchapters for chapter 32
is amended to read as follows:
‘‘Subchapter D. Bows and arrows.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall take effect on January 1, 2000.
SEC. 9. REPEAL OF 1993 INCOME TAX INCREASE ON SOCIAL
SECURITY BENEFITS.
(a) IN GENERAL.—Paragraph (2) of section 86(a)
(relating to social security and tier 1 railroad retirement
benefits) is amended by adding at the end the following
new sentence:
‘‘This paragraph shall not apply to any taxable year
beginning after December 31, 1999.’’
(b) CONFORMING AMENDMENTS.—
(1) Paragraph (3) of section 871(a) is amended
by striking ‘‘85 percent’’ in subparagraph (A) and
inserting ‘‘50 percent’’.
(2)(A) Subparagraph (A) of section 121(e)(1)
of the Social Security Amendments of 1983 (Public
Law 98–21) is amended—
(i) by striking ‘‘(A) There’’ and inserting
‘‘There’’;
(ii) by striking ‘‘(i)’’ immediately following
‘‘amounts equivalent to’’; and
(iii) by striking ‘‘, less (ii)’’ and all that
follows and inserting a period.
(B) Paragraph (1) of section 121(e) of such Act
is amended by striking subparagraph (B).
(C) Paragraph (3) of section 121(e) of such Act
is amended by striking subparagraph (B) and by re-
designating subparagraph (C) as subparagraph (B).
(D) Paragraph (2) of section 121(e) of such
Act is amended in the first sentence by striking
‘‘paragraph (1)(A)’’ and inserting ‘‘paragraph (1)’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1999.
SEC. 10. REPEAL OF DOUBLE TAXATION ON INTEREST AND
DIVIDENDS.
(a) IN GENERAL.—Part III of subchapter B of chap-
ter 1 (relating to amounts specifically excluded from gross
income) is amended by inserting after section 115 the fol-
lowing new section:
‘‘SEC. 116. EXCLUSION OF DIVIDENDS AND INTEREST RE-
CEIVED BY INDIVIDUALS.
‘‘(a) EXCLUSION FROM GROSS INCOME.—Gross in-
come does not include dividends and interest received dur-
ing the taxable year by an individual.
‘‘(b) CERTAIN DIVIDENDS EXCLUDED.—Subsection
(a) shall not apply to any dividend from a corporation
which, for the taxable year of the corporation in which
the distribution is made, or for the next preceding taxable
year of the corporation, is a corporation exempt from tax
under section 501 (relating to certain charitable, etc., or-
ganization) or section 521 (relating to farmers’ coopera-
tive associations).
‘‘(c) 
SPECIAL
RULES.—For 
purposes 
of 
this
section—
‘‘(1) EXCLUSION NOT TO APPLY TO CAPITAL
GAIN
DIVIDENDS
FROM
REGULATED
INVESTMENT
COMPANIES
AND
REAL
ESTATE
INVESTMENT
TRUSTS.—
‘‘For treatment of capital gain dividends, see sec-
tions 854(a) and 857(c).
‘‘(2) CERTAIN
NONRESIDENT
ALIENS
INELI-
GIBLE
FOR
EXCLUSION.—In the case of a non-
resident alien individual, subsection (a) shall apply
only—
‘‘(A) in determining the tax imposed for
the taxable year pursuant to section 871(b)(1)
and only in respect of dividends and interest
which are effectively connected with the conduct
of a trade or business within the United States,
or
‘‘(B) in determining the tax imposed for
the taxable year pursuant to section 877(b).
‘‘(3) DIVIDENDS FROM EMPLOYEE STOCK OWN-
ERSHIP PLANS.—Subsection (a) shall not apply to
any dividend described in section 404(k).’’.
(b) CONFORMING AMENDMENTS.—
(1)(A) Subparagraph (A) of section 135(c)(4) is
amended by inserting ‘‘116,’’ before ‘‘137’’.
(B) Subsection (d) of section 135 is amended
by redesignating paragraph (4) as paragraph (5)
and by inserting after paragraph (3) the following
new paragraph:
‘‘(4) COORDINATION WITH SECTION 116.—This
section shall be applied before section 116.’’.
(2) Paragraph (2) of section 265(a) is amended
by inserting before the period ‘‘, or to purchase or
carry obligations or shares, or to make deposits, to
the extent the interest thereon is excludable from
gross income under section 116’’.
(3) Subsection (c) of section 584 is amended by
adding at the end thereof the following new flush
sentence:
‘‘The proportionate share of each participant in the
amount of dividends or interest received by the common
trust fund and to which section 116 applies shall be con-