I
107TH CONGRESS
1ST SESSION
H. R. 873
To amend the Internal Revenue Code of 1986 to provide individual income
tax rate reductions.
IN THE HOUSE OF REPRESENTATIVES
MARCH 6, 2001
Mr. CRANE introduced the following bill; which was referred to the Committee
on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to provide
individual income tax rate reductions.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; ETC.
(a) SHORT TITLE.—This Act may be cited as the
‘‘AMT Rate Reduction Act of 2001’’.
(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) SECTION 15 NOT TO APPLY.—No amendment
made by this Act shall be treated as a change in a rate
of tax for purposes of section 15 of the Internal Revenue
Code of 1986.
SEC. 2. REDUCTION IN MARGINAL INCOME TAX RATES FOR
INDIVIDUALS.
(a) RATES FOR 2002.—Section 1 (relating to tax im-
posed) is amended by striking subsections (a) through (d)
and inserting 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 $12,000 ..........................
14% of taxable income.
Over 
$12,000 
but 
not 
over
$45,200.
$1,680, plus 15% of the excess over
$12,000.
Over 
$45,200 
but 
not 
over
$109,250.
$6,660, plus 27% of the excess over
$45,200.
Over 
$109,250 
but 
not 
over
$166,450.
$23,953.50, plus 30% of the excess
over $109,250.
Over 
$166,450 
but 
not 
over
$297,300.
$41,113.50, plus 35% of the excess
over $166,450.
Over $297,300 ...............................
$86,911, plus 38% of the excess over
$297,300.
‘‘(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 $10,000 ..........................
14% of taxable income.
Over 
$10,000 
but 
not 
over
$36,250.
$1,400, plus 15% of the excess over
$10,000.
Over 
$36,250 
but 
not 
over
$93,600.
$5,337.50, plus 27% of the excess
over $36,250.
Over 
$93,600 
but 
not 
over
$151,600.
$20,822, plus 30% of the excess over
$93,600.
Over 
$151,600 
but 
not 
over
$297,300.
$38,222, plus 35% of the excess over
$151,600.
Over $297,300 ...............................
$89,217, plus 38% of the excess over
$297,300.
‘‘(c) UNMARRIED INDIVIDUALS (OTHER THAN SUR-
VIVING SPOUSES AND HEADS OF HOUSEHOLDS).—There
is hereby imposed on the taxable income of every indi-
vidual (other than a surviving spouse as defined in section
2(a) or the head of a household as defined in section 2(b))
who is not a married individual (as defined in section
7703) a tax determined in accordance with the following
table:
‘‘If taxable income is:
The tax is:
Not over $6,000 ............................
14% of taxable income.
Over $6,000 but not over $27,050
$840, plus 15% of the excess over
$6,000.
Over 
$27,050 
but 
not 
over
$65,550.
$3,997.50, plus 27% of the excess
over $27,050.
Over 
$65,550 
but 
not 
over
$136,750.
$14,362.50, plus 30% of the excess
over $65,550.
Over 
$136,750 
but 
not 
over
$297,300.
$35,752.50, plus 35% of the excess
over $136,750.
Over $297,300 ...............................
$91,945, plus 38% of the excess over
$297,300.
‘‘(d) MARRIED INDIVIDUALS FILING SEPARATE RE-
TURNS.—There is hereby imposed on the taxable income
of every married individual (as defined in section 7703)
who does not make a single return jointly with his spouse
under section 6013, a tax determined in accordance with
the following table:
‘‘If taxable income is:
The tax is:
Not over $6,000 ............................
14% of taxable income.
Over $6,000 but not over $22,600
$840, plus 15% of the excess over
$6,000.
Over 
$22,600 
but 
not 
over
$54,625.
$3,330, plus 27% of the excess over
$22,600.
Over 
$54,625 
but 
not 
over
$83,225.
$11,976.75, plus 30% of the excess
over $54,625.
Over 
$83,225 
but 
not 
over
$148,650.
$20,556.75, plus 35% of the excess
over $83,225.
Over $148,650 ...............................
$43,455.50, plus 38% of the excess
over $148,650.’’.
(b) PHASEIN OF RATE REDUCTIONS.—Section 1 is
amended by adding at the end the following new sub-
section:
‘‘(i) PHASEIN OF 2006 RATES OF 10, 15, 25, AND
33 PERCENT.—
‘‘(1) IN GENERAL.—In the case of taxable years
beginning in a calendar year after 2002, the tax
rates determined under subsection (a), (b), (c), or
(d) shall be the tax rates imposed by such subsection
in taxable years beginning in calendar year 2002, re-
duced—
‘‘(A) in the case of the 14 percent rate, by
1 percentage point in each taxable year begin-
ning in a calendar year after 2002 and before
2007,
‘‘(B) in the case of the 27 and 35 percent
rates, by 1 percentage point in taxable years be-
ginning in calendar year 2004, and by an addi-
tional 1 percentage point in taxable years begin-
ning in calendar year 2006, and
‘‘(C) in the case of the 30 and 38 percent
rate, by 1 percentage point in each taxable year
beginning in a calendar year after 2002 and be-
fore 2006, and by an additional 2 percentage
points in taxable years beginning in calendar
year 2006.
‘‘(2) ADJUSTMENT OF TABLES.—The Secretary
shall adjust the tables prescribed under subsection
(f) to carry out the reductions under this sub-
section.’’.
(c) INFLATION ADJUSTMENT TO APPLY IN DETER-
MINING RATES FOR 2002.—Subsection (f) of section 1 is
amended—
(1) by striking ‘‘1993’’ in paragraph (1) and in-
serting ‘‘2001’’,
(2) by striking ‘‘1992’’ in paragraph (3)(B) and
inserting ‘‘2000’’, and
(3) by striking paragraph (7) and inserting the
following new paragraph:
‘‘(7) SPECIAL RULE FOR CERTAIN BRACKETS.—
‘‘(A) CALENDAR
YEARS
2002
THROUGH
2006.—In prescribing the tables under para-
graph (1) which apply with respect to taxable
years beginning in calendar years after 2001
and before 2007, the Secretary shall make no
adjustment to the dollar amounts at which the
first rate bracket begins or at which the second
rate bracket begins under any table contained
in subsection (a), (b), (c), or (d).
‘‘(B) LATER CALENDAR YEARS.—In pre-
scribing the tables under paragraph (1) which
apply with respect to taxable years beginning in
a calendar year after 2006, the cost-of-living
adjustment used in making adjustments to the
dollar amounts referred to in subparagraph (A)
shall be determined under paragraph (3) by
substituting ‘2005’ for ‘2000’.’’.
(d) CONFORMING AMENDMENTS.—
(1) The following provisions are each amended
by striking ‘‘1992’’ and inserting ‘‘2000’’ each place
it appears:
(A) Section 32(j)(1)(B).
(B) Section 41(e)(5)(C).
(C) Section 42(h)(3)(H)(i)(II).
(D) Section 59(j)(2)(B).
(2) 
Sections 
25A(h)(1)(A)(ii) 
and
25A(h)(2)(A)(ii) are each amended by striking ‘‘be-
gins,’’ and all that follows through ‘‘thereof’’.
(3) Subclause (II) of section 42(h)(6)(G)(i) is
amended by striking ‘‘1987’’ and inserting ‘‘2000’’.
(e) ADDITIONAL CONFORMING AMENDMENTS.—
(1) Section 1(g)(7)(B)(ii)(II) is amended by
striking ‘‘15 percent’’ and inserting ‘‘10 percent’’.
(2) Section 1(h) is amended—
(A) by striking ‘‘28 percent’’ both places it
appears 
in 
paragraphs 
(1)(A)(ii)(I) 
and
(1)(B)(i) and inserting ‘‘15 percent’’, and
(B) by striking paragraph (13).
(3) Section 531 is amended by striking ‘‘39.6
percent’’ and inserting ‘‘33 percent’’.
(4) Section 541 of such Code is amended by
striking ‘‘39.6 percent’’ and inserting ‘‘33 percent’’.
(5) Section 3402(p)(1)(B) is amended by strik-
ing ‘‘7, 15, 28, or 31 percent’’ and inserting ‘‘5, 10,
15, or 25 percent’’.
(6) Section 3402(p)(2) is amended by striking
‘‘15 percent’’ and inserting ‘‘10 percent’’.
(7) Section 3402(q)(1) is amended by striking
‘‘28 percent’’ and inserting ‘‘15 percent’’.
(8) Section 3402(r)(3) is amended by striking
‘‘31 percent’’ and inserting ‘‘25 percent’’.
(9) Section 3406(a)(1) is amended by striking
‘‘31 percent’’ and inserting ‘‘25 percent’’.
(10) The Secretary of the Treasury may pre-
scribe percentages which shall apply in lieu of the
percentages specified in the amendments made by
this subsection in order to coordinate those percent-
ages with the percentages specified in the tables pre-
scribed under the last sentence of section 1(i)(1) of
the Internal Revenue Code of 1986, as added by this
section.
(f) EFFECTIVE DATES.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section
shall apply to taxable years beginning after Decem-
ber 31, 2001.
(2) AMENDMENTS
TO
WITHHOLDING
PROVI-
SIONS.—The amendments made by paragraphs (5),
(6), (7), (8), and (9) of subsection (e) shall apply to
amounts paid after December 31, 2001.
SEC. 3. REDUCTION IN ALTERNATIVE MINIMUM TAX RATES
FOR INDIVIDUALS.
(a) IN GENERAL.—Clause (i) of section 55(b)(1)(A)
(defining tentative minimum tax) is amended to read as
follows:
‘‘(i) IN GENERAL.—In the case of a
taxpayer other than a corporation, the ten-
tative minimum tax for the taxable year is
25 percent of the taxable excess.’’
(b) PHASEIN OF REDUCED RATE FOR CERTAIN TAX-
PAYERS.—Subparagraph (A) of section 55(b)(1) is amend-
ed by redesignating clauses (ii) and (iii) as clauses (iii)
and (iv), respectively, and by inserting after clause (ii) the
following new clause:
‘‘(iii) PHASEIN OF REDUCED RATE.—
In the case of so much of the taxable ex-
cess as exceeds $175,000, clause (i) shall
be applied by substituting for ‘25 per-
cent’—
‘‘(I) 27 percent in the case of
taxable years beginning during 2002
or 2003, and
‘‘(II) 26 percent in the case of
taxable years beginning during 2004
or 2005.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 2001.
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