Title: A bill to amend the Internal Revenue Code of 1986 to make permanent the individual tax rates in effect for taxable years 2018 through 2025.
Policy area: Taxation

Summary:
This bill amends the Internal Revenue Code to make permanent provisions included in P.L. 115-97 (commonly known as the Tax Cuts and Jobs Act) that: (1) reduced the individual tax rates, and (2) modified the taxation of the unearned income of children. The existing individual tax rates (10%, 12%, 22%, 24%, 32%, 35%, and 37%) are currently scheduled to expire and revert to higher rates at the end of 2025.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 2291 Introduced in Senate (IS)]

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115th CONGRESS
  2d Session
                                S. 2291

   To amend the Internal Revenue Code of 1986 to make permanent the 
  individual tax rates in effect for taxable years 2018 through 2025.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            January 10, 2018

   Mr. Cruz introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
   To amend the Internal Revenue Code of 1986 to make permanent the 
  individual tax rates in effect for taxable years 2018 through 2025.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. PERMANENT MODIFICATION OF INDIVIDUAL RATE BRACKETS.

    (a) Married Individuals Filing Joint Returns and Surviving 
Spouses.--The table contained in subsection (a) of section 1 of the 
Internal Revenue Code of 1986 is amended to read as follows:


 
       ``If taxable income is:                    The tax is:
------------------------------------------------------------------------
Not over $19,050.....................  10% of taxable income.
Over $19,050 but not over $77,400....  $1,905, plus 12% of the excess
                                        over $19,050.
Over $77,400 but not over $165,000...  $8,907, plus 22% of the excess
                                        over $77,400.
Over $165,000 but not over $315,000..  $28,179, plus 24% of the excess
                                        over $165,000.
Over $315,000 but not over $400,000..  $64,179, plus 32% of the excess
                                        over $315,000.
Over $400,000 but not over $600,000..  $91,379, plus 35% of the excess
                                        over $400,000.
Over $600,000........................  $161,379, plus 37% of the excess
                                        over $600,000.''.

    (b) Heads of Households.--The table contained in subsection (b) of 
section 1 of the Internal Revenue Code of 1986 is amended to read as 
follows:


 
       ``If taxable income is:                    The tax is:
------------------------------------------------------------------------
Not over $13,600.....................  10% of taxable income.
Over $13,600 but not over $51,800....  $1,360, plus 12% of the excess
                                        over $13,600.
Over $51,800 but not over $82,500....  $5,944, plus 22% of the excess
                                        over $51,800.
Over $82,500 but not over $157,500...  $12,698, plus 24% of the excess
                                        over $82,500.
Over $157,500 but not over $200,000..  $30,698, plus 32% of the excess
                                        over $157,500.
Over $200,000 but not over $500,000..  $44,298, plus 35% of the excess
                                        over $200,000.
Over $500,000........................  $149,298, plus 37% of the excess
                                        over $500,000.''.

    (c) Unmarried Individuals Other Than Surviving Spouses and Heads of 
Households.--The table contained in subsection (c) of section 1 of the 
Internal Revenue Code of 1986 is amended to read as follows:


 
       ``If taxable income is:                    The tax is:
------------------------------------------------------------------------
Not over $9,525......................  10% of taxable income.
Over $9,525 but not over $38,700.....  $952.50, plus 12% of the excess
                                        over $9,525.
Over $38,700 but not over $82,500....  $4,453.50, plus 22% of the excess
                                        over $38,700.
Over $82,500 but not over $157,500...  $14,089.50, plus 24% of the
                                        excess over $82,500.
Over $157,500 but not over $200,000..  $32,089.50, plus 32% of the
                                        excess over $157,500.
Over $200,000 but not over $500,000..  $45,689.50, plus 35% of the
                                        excess over $200,000.
Over $500,000........................  $150,689.50, plus 37% of the
                                        excess over $500,000.''.

    (d) Married Individuals Filing Separate Returns.--The table 
contained in subsection (d) of section 1 of the Internal Revenue Code 
of 1986 is amended to read as follows:


 
       ``If taxable income is:                    The tax is:
------------------------------------------------------------------------
Not over $9,525......................  10% of taxable income.
Over $9,525 but not over $38,700.....  $952.50, plus 12% of the excess
                                        over $9,525.
Over $38,700 but not over $82,500....  $4,453.50, plus 22% of the excess
                                        over $38,700.
Over $82,500 but not over $157,500...  $14,089.50, plus 24% of the
                                        excess over $82,500.
Over $157,500 but not over $200,000..  $32,089.50, plus 32% of the
                                        excess over $157,500.
Over $200,000 but not over $300,000..  $45,689.50, plus 35% of the
                                        excess over $200,000.
Over $300,000........................  $80,689.50, plus 37% of the
                                        excess over $300,000.''.

    (e) Estates and Trusts.--The table contained in subsection (e) of 
section 1 of the Internal Revenue Code of 1986 is amended to read as 
follows:


 
       ``If taxable income is:                    The tax is:
------------------------------------------------------------------------
Not over $2,550......................  10% of taxable income.
Over $2,550 but not over $9,150......  $255, plus 24% of the excess over
                                        $2,550.
Over $9,150 but not over $12,500.....  $1,839, plus 35% of the excess
                                        over $9,150.
Over $12,500.........................  $3,011.50, plus 37% of the excess
                                        over $12,500.''.

    (f) Adjustment for Inflation.--Subsection (f) of section 1 of the 
Internal Revenue Code of 1986 is amended--
            (1) by striking ``1993'' in paragraph (1) and inserting 
        ``2018'';
            (2) by striking ``determined--'' and all that follows in 
        paragraph (2)(A) and inserting ``determined by substituting 
        `2017' for `2016' in paragraph (3)(A)(ii),'';
            (3) by striking ``a married individual filing a separate 
        return'' in paragraph (7)(B) and inserting ``any unmarried 
        individual other than a surviving spouse or head of 
        household'';
            (4) by striking ``married individuals filing separately'' 
        in the heading of subparagraph (B) of paragraph (7) and 
        inserting ``certain unmarried individuals''; and
            (5) by striking paragraph (8).
    (g) Special Rules for Certain Children With Unearned Income.--
Subsection (g) of section 1 of the Internal Revenue Code of 1986 is 
amended--
            (1) by striking paragraphs (1), (3), and (5);
            (2) by redesignating paragraphs (4), (6), and (7) as 
        paragraphs (5), (7), and (8), respectively;
            (3) by redesignating paragraph (2) as paragraph (6) and by 
        moving such paragraph to the position between paragraphs (5) 
        and (7) (as so redesignated);
            (4) by inserting before paragraph (5) (as so redesignated) 
        the following new paragraphs:
            ``(1) In general.--In the case of a child to whom this 
        subsection applies for the taxable year, the amount of tax 
        imposed by this section on such child shall be determined as 
        provided in paragraphs (2) and (3).
            ``(2) Modifications to applicable rate brackets.--The 
        income tax table otherwise applicable under this section to the 
        child shall be applied with the following modifications:
                    ``(A) 24-percent bracket.--The maximum taxable 
                income which is taxed at a rate below 24 percent shall 
                not be more than the sum of--
                            ``(i) the earned taxable income of such 
                        child, plus
                            ``(ii) the minimum taxable income for the 
                        24-percent bracket in the table under 
                        subsection (e) (as adjusted under subsection 
                        (f)) for the taxable year.
                    ``(B) 35-percent bracket.--The maximum taxable 
                income which is taxed at a rate below 35 percent shall 
                not be more than the sum of--
                            ``(i) the earned taxable income of such 
                        child, plus
                            ``(ii) the minimum taxable income for the 
                        35-percent bracket in the table under 
                        subsection (e) (as adjusted under subsection 
                        (f)) for the taxable year.
                    ``(C) 37-percent bracket.--The maximum taxable 
                income which is taxed at a rate below 37 percent shall 
                not be more than the sum of--
                            ``(i) the earned taxable income of such 
                        child, plus
                            ``(ii) the minimum taxable income for the 
                        37-percent bracket in the table under 
                        subsection (e) (as adjusted under subsection 
                        (f)) for the taxable year.
            ``(3) Coordination with capital gains rates.--For purposes 
        of applying subsection (h)--
                    ``(A) the maximum zero rate amount shall not be 
                more than the sum of--
                            ``(i) the earned taxable income of such 
                        child, plus
                            ``(ii) the amount in effect under 
                        subsection (h)(12)(A)(iv) for the taxable year, 
                        and
                    ``(B) the maximum 15-percent rate amount shall not 
                be more than the sum of--
                            ``(i) the earned taxable income of such 
                        child, plus
                            ``(ii) the amount in effect under 
                        subsection (h)(12)(B)(iv) for the taxable year.
            ``(4) Earned taxable income.--For purposes of this 
        subsection, the term `earned taxable income' means, with 
        respect to any child for any taxable year, the taxable income 
        of such child reduced (but not below zero) by the net unearned 
        income of such child.''; and
            (5) by striking ``paragraph (4)(A)(ii)(I)'' each place it 
        appears in subparagraphs (A)(ii), (B)(i), and (B)(ii)(II) of 
        paragraph (8) (as so redesignated) and inserting ``paragraph 
        (5)(A)(ii)(I)''.
    (h) Capital Gains Brackets.--Subsection (h) of section 1 of the 
Internal Revenue Code of 1986 is amended--
            (1) by striking ``which would (without regard to this 
        paragraph) be taxed at a rate below 25 percent'' in paragraph 
        (1)(B)(i) and inserting ``below the maximum zero rate amount'';
            (2) by striking ``which would (without regard to this 
        paragraph) be taxed at a rate below 39.6 percent'' in paragraph 
        (1)(C)(ii)(I) and inserting ``below the maximum 15-percent rate 
        amount''; and
            (3) by adding at the end the following new paragraph:
            ``(12) Maximum amounts defined.--For purposes of this 
        subsection--
                    ``(A) Maximum zero rate amount.--The maximum zero 
                rate amount shall be--
                            ``(i) in the case of a joint return or 
                        surviving spouse, $77,200,
                            ``(ii) in the case of an individual who is 
                        a head of household (as defined in section 
                        2(b)), $51,700,
                            ``(iii) in the case of any other individual 
                        (other than an estate or trust), an amount 
                        equal to \1/2\ of the amount in effect for the 
                        taxable year under clause (i), and
                            ``(iv) in the case of an estate or trust, 
                        $2,600.
                    ``(B) Maximum 15-percent rate amount.--The maximum 
                15-percent rate amount shall be--
                            ``(i) in the case of a joint return or 
                        surviving spouse, $479,000 (\1/2\ such amount 
                        in the case of a married individual filing a 
                        separate return),
                            ``(ii) in the case of an individual who is 
                        the head of a household (as defined in section 
                        2(b)), $452,400,
                            ``(iii) in the case of any other individual 
                        (other than an estate or trust), $425,800, and
                            ``(iv) in the case of an estate or trust, 
                        $12,700.
                    ``(C) Inflation adjustment.--In the case of any 
                taxable year beginning after 2018, each of the dollar 
                amounts in subparagraphs (A) and (B) shall be increased 
                by an amount equal to--
                            ``(i) such dollar amount, multiplied by
                            ``(ii) the cost-of-living adjustment 
                        determined under subsection (f)(3) for the 
                        calendar year in which the taxable year begins, 
                        determined by substituting `calendar year 2017' 
                        for `calendar year 2016' in subparagraph 
                        (A)(ii) thereof.
                If any increase under this subparagraph is not a 
                multiple of $50, such increase shall be rounded to the 
                next lowest multiple of $50.''.
    (i) Conforming Amendments.--
            (1) Section 1 of the Internal Revenue Code of 1986 is 
        amended by striking subsections (i) and (j).
            (2) Section 3402(q)(1) of such Code is amended by striking 
        ``third lowest'' and inserting ``fourth lowest''.
    (j) Section 15 Not To Apply.--Section 15 of the Internal Revenue 
Code of 1986 shall not apply to any change in a rate of tax by reason 
of this section.
    (k) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2018.
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