(C) Subsection (c) of section 56 is amended by
striking so much of the subsection as precedes para-
graph (1), by redesignating paragraphs (1), (2), and
(3) as paragraphs (8), (9), and (10), respectively,
and moving them to the end of subsection (a).
(D) Paragraph (8) of section 56(a), as redesig-
nating by paragraph (12)(C), is amended by striking
‘‘subsection (g)’’ and inserting ‘‘subsection (c)’’.
(E) Section 56 is amended by striking sub-
section (e) and by redesignating subsections (d) and
(g) as subsections (b) and (c), respectively.
(11)(A) Section 58 is hereby repealed.
(B) Clause (i) of section 56(b)(2)(A) (as redes-
ignated by paragraph (12)(E), is amended by insert-
ing ‘‘, in the case of taxable years beginning before
January 1, 2000,’’ before ‘‘section 58’’.
(C) Subsection (h) of section 59 is amended—
(i) by striking ‘‘, 465, and 1366(d)’’ and
inserting ‘‘and 465’’, and
(ii) by striking ‘‘56, 57, and 58’’ and in-
serting ‘‘56 and 57’’.
(12(A) Subparagraph (C) of section 59(a)(1) is
amended by striking ‘‘subparagraph (A)(i) or (B)(i)
of section 55(b)(1) (whichever applies)’’ and insert-
ing ‘‘section 55(b)(1)(A)’’.
(B) Paragraph (3) of section 59(a) is amended
to read as follows:
‘‘(3) PRE-CREDIT TENTATIVE MINIMUM TAX.—
For purposes of this subsection, the term ‘pre-credit
tentative minimum tax’ means the amount deter-
mined under section 55(b)(1)(A).’’.
(C) Section 59 is amended by striking sub-
section (c).
(D) Section 59 is amended by striking sub-
section (j).
(13) Paragraph (7) of section 382(l) is amend-
ed by striking ‘‘section 56(d)’’ and inserting ‘‘section
56(b)’’.
(14) Paragraph (2) of section 641(c) is amend-
ed by striking subparagraph (B) and by redesig-
nating subparagraphs (C) and (D) as subparagraphs
(B) and (C), respectively.
(15) Subsections (b) and (c) of section 666 are
each amended by striking ‘‘(other than the tax im-
posed by section 55)’’.
(16) Subsections (c)(5) and (d)(3)(B) of section
772 are each amended by striking ‘‘56, 57, and 58’’
and inserting ‘‘56 and 57’’.
(17) Sections 847 and 848(i) are each amended
by striking ‘‘section 56(g)’’ and inserting ‘‘section
56(c)’’.
(18) Sections 871(b)(1) and 877(b) are each
amended by striking ‘‘or 55’’.
(19) Subsection (a) of section 897 is amended
to read as follows:
‘‘(a) GENERAL RULE.—For purposes of this title,
gain or loss of a nonresident alien individual or a foreign
corporation from the disposition of a United States real
property interest shall be taken into account—
‘‘(1) in the case of a nonresident alien indi-
vidual, under section 871(b)(1), or
‘‘(2) in the case of a foreign corporation, under
section 882(a)(1),
as if the taxpayer were engaged in a trade or business
within the United States during the taxable year and as
if such gain or loss were effectively connected with such
trade or business.’’.
(20) Paragraph (1) of section 962(a) is amend-
ed by striking ‘‘sections 1 and 55’’ and inserting
‘‘section 1’’.
(21) Paragraph (1) of section 1397E(c) is
amended to read as follows:
‘‘(1) the regular tax liability (as defined in sec-
tion 26(b), over’’
(22) The last sentence of section 1563(a) is
amended by striking ‘‘section 55(d)(3)’’ and insert-
ing ‘‘section 55(d)(2)’’.
(23) Subparagraph (B) of section 6015(d)(2) is
amended by striking ‘‘or 55’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1999.
(d) TRANSITIONAL RULE RELATING TO MINIMUM
TAX CREDIT.—
(1) IN GENERAL.—The pre-effective date min-
imum tax credit of a taxpayer other than a corpora-
tion shall not be allowed under section 53 of the In-
ternal Revenue Code of 1986 but shall be allowed
under this subsection.
(2) PRE-EFFECTIVE DATE MINIMUM TAX CRED-
IT.—For purposes of this subsection, the term ‘‘pre-
effective date minimum tax credit’’ means the
amount determined under section 53(b) of such
Code for the first taxable year beginning after De-
cember 31, 1999.
(3) AMOUNT OF CREDIT.—
(A) IN GENERAL.—The pre-effective date
minimum tax credit of a taxpayer other than a
corporation shall be allowed ratably over the pe-
riod of 10 taxable years beginning with the first
taxable year beginning after December 31,
1999.
(B) LIMITATION.—The credit allowable by
this subsection for any taxable year shall not
exceed the regular tax liability of the taxpayer
for such taxable year reduced by the sum of the
credits allowable under subparts A, B, D, E,
and F of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986.
(C) CARRYFORWARD.—If the credit allow-
able by this subsection exceeds the limitation
imposed by subparagraph (B), such excess shall
be carried to the succeeding taxable year and
added to the credit allowable under this sub-
section for such succeeding taxable year.
(4) ACCELERATION
OF
CREDIT
WHERE
PRE-
VIOUSLY TAXED INCOME.—
(A) IN
GENERAL.—The credit allowed
under this subsection for any taxable year shall
not be less than so much of the limitation de-
scribed in paragraph (3)(B) for the taxable year
Subtitle B—Revenue Offsets
SEC. 311. ADDITIONAL INCOME TAX.
(a) IN GENERAL.—Section 1 is amended by adding
at the end the following new subsection:
‘‘(h) ADDITIONAL INCOME TAX.—
‘‘(1) IN GENERAL.—If the adjusted gross in-
come of an individual exceeds the initial threshold
amount, the tax imposed by this section (determined
without regard to this subsection) shall be increased
by an amount equal to the sum of—
‘‘(A) 1 percent of so much of the adjusted
gross income as exceeds the initial threshold
amount but does not exceed the second thresh-
old amount, and
‘‘(B) 2.08 percent of so much of the ad-
justed gross income as exceeds the second
threshold amount.
‘‘(2) THRESHOLD AMOUNTS.—For purposes of
this subsection—
‘‘(A) INITIAL THRESHOLD AMOUNT.—The
initial threshold amount is—
‘‘(i) $120,000 in the case of a joint
return,
‘‘(ii) $90,000 in the case of an indi-
vidual who is not married, and
‘‘(iii) 1⁄2 the dollar amount applicable
under clause (i) in the case of a married
individual filing a separate return.
‘‘(B) SECOND THRESHOLD AMOUNT.—The
second threshold amount is—
‘‘(i) $150,000 in the case of a joint
return,
‘‘(ii) $112,000 in the case of an indi-
vidual who is not married, and
‘‘(iii) 1⁄2 the dollar amount applicable
under clause (i) in the case of a married
individual filing a separate return.
‘‘(C) MARITAL STATUS.—For purposes of
this paragraph, marital status shall be deter-
mined under section 7703.
‘‘(3) INFLATION ADJUSTMENT.—In the case of
any taxable year beginning in a calendar year after
2000, each dollar amount contained in paragraph
(2) shall be increased by an amount equal to—
‘‘(A) such dollar amount, multiplied by
‘‘(B) the cost-of-living adjustment deter-
mined under subsection (f)(3) for the calendar
year in which the taxable year begins, by sub-
stituting ‘calendar year 1999’ for ‘calendar year
1992’ in subparagraph (B) thereof.
If any increase under the preceding sentence is not
a multiple of $50, such increase shall be rounded to
the nearest multiple of $50.
‘‘(4) TAX
NOT
TO
APPLY
TO
ESTATES
AND
TRUSTS.—This subsection shall not apply to an es-
tate or trust.’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to taxable years beginning after
December 31, 1999.
(c) SECTION 15 NOT TO APPLY.—The amendment
made by this section shall not be treated as a change in
a rate of tax for purposes of section 15 of such Code.
SEC. 
312. 
INCREASE 
IN 
FLOOR 
ON 
MISCELLANEOUS
ITEMIZED DEDUCTIONS FOR HIGHER IN-
COME TAXPAYERS.
(a) IN GENERAL.—Subsection (a) of section 67 (re-
lating to 2-percent floor on miscellaneous itemized deduc-
tions) is amended by striking ‘‘2 percent of adjusted gross
income’’ and inserting ‘‘the sum of—
‘‘(1) 2 percent of so much of adjusted gross in-
come as does not exceed $100,000, and
‘‘(2) 4 percent of so much of adjusted gross in-
come as exceeds $100,000’’.
(b) INFLATION ADJUSTMENT.—Section 67 is amend-
ed by adding at the end the following new subsection:
‘‘(g) INFLATION ADJUSTMENT.—In the case of any
taxable year beginning in a calendar year after 2000, the
$100,000 amount contained in subsection (a) shall be in-
creased by an amount equal to—
‘‘(1) such dollar amount, multiplied by
‘‘(2) the cost-of-living adjustment determined
under subsection (f)(3) for the calendar year in
which the taxable year begins, by substituting ‘cal-
endar year 1999’ for ‘calendar year 1992’ in sub-
paragraph (B) thereof.
If any increase under the preceding sentence is not a mul-
tiple of $50, such increase shall be rounded to the nearest
multiple of $50.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1999.
Æ