I 
108TH CONGRESS 
1ST SESSION H. R. 1789
To amend the Internal Revenue Code of 1986 to repeal the income taxation 
of corporations, to impose a 10 percent tax on the earned income (and 
only the earned income) of individuals, to repeal the estate and gift 
taxes, to provide amnesty for all tax liability for prior taxable years, 
and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 11, 2003
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 repeal 
the income taxation of corporations, to impose a 10 
percent tax on the earned income (and only the earned 
income) of individuals, to repeal the estate and gift taxes, 
to provide amnesty for all tax liability for prior taxable 
years, 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. 
This Act may be cited as the ‘‘Crane Tithe Tax Act 
of 2003’’.
SEC. 2. REPEAL OF TAXATION OF CORPORATIONS. 
The following provisions of the Internal Revenue 
Code of 1986 are hereby repealed: 
(1) section 11 (relating to corporate income 
tax), 
(2) section 55 (relating to alternative minimum 
tax) insofar as it applies to corporations, 
(3) section 511 (relating to unrelated business 
income tax), 
(4) section 531 (relating to accumulated earn-
ings tax), 
(5) section 541 (relating to personal holding 
company tax), 
(6) section 594 (relating to alternative tax for 
certain mutual savings banks), 
(7) section 801 (relating to tax imposed on life 
insurance companies), 
(8) section 821 (relating to tax imposed on cer-
tain mutual insurance companies), 
(9) section 831 (relating to tax on certain other 
insurance companies), 
(10) section 852 (relating to tax on regulated 
investment companies), 
(11) section 857 (relating to tax on real estate 
investment trusts), and
(12) section 882 (relating to tax on income of 
foreign corporations connected with United States 
business). 
SEC. 3. 10 PERCENT INCOME TAX RATE FOR INDIVIDUALS. 
Section 1 of the Internal Revenue Code of 1986 (re-
lating to tax imposed on individuals) is amended to read 
as follows: 
‘‘SECTION 1. TAX IMPOSED. 
‘‘(a) IN GENERAL.—There is hereby imposed on the 
income of every individual a tax equal to 10 percent of 
the excess of the earned income of such individual for the 
taxable year over the exemption amount for such year. 
‘‘(b) DEFINITIONS.—For purposes of this section—
‘‘(1) EXEMPTION AMOUNT.—
‘‘(A) IN GENERAL.—The term ‘exemption 
amount’ means, for any taxable year, $10,000 
increased (for taxable years beginning after De-
cember 31, 2003) by an amount equal to 
$10,000 multiplied by the cost-of-living adjust-
ment for the calendar year in which the taxable 
year begins. 
‘‘(B) COST-OF-LIVING ADJUSTMENT.—For 
purposes of this paragraph—
‘‘(i) IN GENERAL.—The cost-of-living 
adjustment for any calendar year is the 
percentage (if any) by which—
‘‘(I) the CPI for October of the 
preceding calendar year, exceeds 
‘‘(II) the CPI for October of 
2002. 
‘‘(ii) CPI.—The term ‘CPI’ means the 
last Consumer Price Index for all-urban 
consumers published by the Department of 
Labor. 
‘‘(C) ROUNDING.—If the increase deter-
mined under this paragraph is not a multiple of 
$10, such increase shall be rounded to the near-
est multiple of $10 (or if such increase is a 
multiple of $5, such increase shall be increased 
to the next highest multiple of $10). 
‘‘(2) EARNED INCOME.—
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), the term ‘earned income’ 
means—
‘‘(i) wages, salaries, and other em-
ployee compensation,
‘‘(ii) the amount of the taxpayer’s net 
earnings from self-employment for the tax-
able year, and 
‘‘(iii) the amount of dividends which 
are from a personal service corporation or 
which are otherwise directly or indirectly 
compensation for services. 
‘‘(B) EXCEPTIONS.—The term ‘earned in-
come’ does not include—
‘‘(i) any amount received as a pension 
or annuity, or 
‘‘(ii) any tip unless the amount of the 
tip is not within the discretion of the serv-
ice-recipient. 
‘‘(C) FRINGE BENEFITS VALUED AT EM-
PLOYER COST.—The amount of any fringe ben-
efit which is included as earned income shall be 
the cost to the employer of such benefit.’’
SEC. 4. AMNESTY FOR ALL PRIOR TAX LIABILITY. 
(a) IN GENERAL.—No person shall be liable for any 
tax imposed by chapter 1 of the Internal Revenue Code 
of 1986 (or for penalties and interest with respect to such 
tax) for any taxable year ending before January 1, 2002. 
(b) EXCEPTIONS.—
(1) AMOUNTS PAID.—Subsection (a) shall not 
apply to amounts paid before the date of the enact-
ment of this Act. 
(2) TAX ATTRIBUTABLE TO ILLEGAL ACTIVI-
TIES.—Subsection (a) shall not apply to any tax (in-
cluding penalties and interest with respect to such 
tax) attributable to any business activity which is in 
violation of any Federal, State, or local law. 
SEC. 5. REPEAL OF SPECIAL DEDUCTIONS, CREDITS, AND 
EXCLUSIONS FROM INCOME FOR INDIVID-
UALS. 
Chapter 1 of the Internal Revenue Code of 1986 is 
amended by striking out all specific exclusions from gross 
income, all deductions, and all credits against income tax 
to the extent related to the computation of individual in-
come tax liability. 
SEC. 6. REPEAL OF ESTATE AND GIFT TAXES. 
Subtitle B of the Internal Revenue Code of 1986 (re-
lating to estate, gift, and generation-skipping taxes) is 
hereby repealed. 
SEC. 7. EFFECTIVE DATES. 
(a) IN GENERAL.—Except as provided in subsection 
(b), the amendments made by this Act shall apply to tax-
able years beginning after the date of the enactment of 
this Act.
(b) REPEAL OF ESTATE AND GIFT TAXES.—The re-
peal made by section 6 shall apply to estates of decedents 
dying, and transfers made, after the date of the enactment 
of this Act. 
(c) TECHNICAL AND CONFORMING CHANGES.—The 
Secretary of the Treasury or his delegate shall, as soon 
as practicable but in any event not later than 90 days 
after the date of the enactment of this Act, submit to the 
Committee on Ways and Means of the House of Rep-
resentatives a draft of any technical and conforming 
changes in the Internal Revenue Code of 1986 which are 
necessary to reflect throughout such Code the changes in 
the substantive provisions of law made by this Act.
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