I
107TH CONGRESS
1ST SESSION
H. R. 2599
To spur job growth by reducing individual capital gains rates and to make
permanent the Economic Growth and Tax Relief Act of 2001.
IN THE HOUSE OF REPRESENTATIVES
JULY 23, 2001
Mr. TOOMEY introduced the following bill; which was referred to the
Committee on Ways and Means
A BILL
To spur job growth by reducing individual capital gains
rates and to make permanent the Economic Growth and
Tax Relief Act of 2001.
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 ‘‘Tax Relief Improve-
ment Act of 2001’’.
SEC. 2. REDUCED CAPITAL GAINS RATE FOR INDIVIDUALS.
(a) IN GENERAL.—Subsection (h) of section 1 of the
Internal Revenue Code of 1986 (relating to maximum cap-
ital gains rate) is amended to read as follows:
‘‘(h) MAXIMUM CAPITAL GAINS RATE.—
‘‘(1) IN GENERAL.—If a taxpayer has a net
capital gain for any taxable year, the tax imposed by
this section for such taxable year shall not exceed
the sum of—
‘‘(A) a tax computed at the rates and in
the same manner as if this subsection had not
been enacted on taxable income reduced by the
net capital gain,
‘‘(B) 7.5 percent of so much of the tax-
payer’s net capital gain (or, if less, taxable in-
come) as does not exceed the excess (if any)
of—
‘‘(i) the amount of taxable income
which would (without regard to this para-
graph) be taxed at a rate of 15 percent or
less, over
‘‘(ii) the amount on which tax is de-
termined under subparagraph (A), plus
‘‘(C) 15 percent of the taxpayer’s net cap-
ital gain (or, if less, taxable income) in excess
of the amount of capital gain on which tax is
determined under subparagraph (B).
‘‘(2) NET CAPITAL GAIN TAKEN INTO ACCOUNT
AS INVESTMENT INCOME.—For purposes of this sub-
section, 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 in-
vestment income under section 163(d)(4)(B)(iii).’’
(b) MINIMUM TAX.—
(1) IN GENERAL.—Subparagraph (A) of section
55(b)(1) of such Code is amended by redesignating
clauses (ii) and (iii) as clauses (iii) and (iv), respec-
tively, and by inserting after clause (i) the following
new clause:
‘‘(ii) MAXIMUM RATE OF TAX ON NET
CAPITAL
GAIN.—The amount determined
under the first sentence of clause (i) shall
not exceed the sum of—
‘‘(I) 
the 
amount 
determined
under such first sentence computed at
the rates and in the same manner as
if this clause had not been enacted on
the taxable excess reduced by the net
capital gain, plus
‘‘(II) a tax of 15 percent of the
lesser of the net capital gain or the
taxable excess.’’
(2) CONFORMING AMENDMENT.—Clause (iii) of
section 55(a)(1)(A) of such Code (as redesignated by
paragraph (1)) is amended by striking ‘‘clause (i)’’
and inserting ‘‘this subparagraph’’.
(c) CONFORMING AMENDMENTS.—
(1) Section 1202 of such Code (relating to 50-
percent exclusion for gain from certain small busi-
ness stock) is hereby repealed.
(2)(A) Subsection (a) of section 57 of such
Code is amended by striking paragraph (7).
(B) Subclause (II) of section 53(d)(1)(B)(ii) of
such Code is amended by striking ‘‘, (5), and (7)’’
and inserting ‘‘and (5)’’.
(3) Paragraph (1) of section 170(e) of such
Code is amended by striking ‘‘the amount of gain’’
in the material following subparagraph (B)(ii) and
inserting ‘‘50 percent (80 percent in the case of a
corporation) of the amount of gain’’.
(4) Paragraph (2) of section 172(d) of such
Code is amended to read as follows:
‘‘(2) CAPITAL
GAINS
AND
LOSSES
OF
TAX-
PAYERS OTHER THAN CORPORATIONS.—In the case
of a taxpayer other than a corporation, the amount
deductible on account of losses from sales or ex-
changes of capital assets shall not exceed the
amount includible on account of gains from sales or
exchanges of capital assets.’’