Definition: In this task, you are given text for US Congressional and California state bills, your task is to generate a summary for this bill.
Input: SECTION 1. SHORT TITLE, ETC.

(a) Short Title.--This Act may be cited as the ''Small Business/
Family Farm and Investment Fairness Act of 1997''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment 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
provision of the Internal Revenue Code of 1986.

SEC. 2. PHASEOUT OF CAPITAL GAINS RATE FOR INDIVIDUALS.

(a) In General.--Subsection (h) of section 1 (relating to maximum
capital 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, plus
''(B) a tax equal to the applicable percentage of
the net capital gain.
''(2) Applicable percentage.--For purposes of paragraph
(1), the term 'applicable percentage' means the percentage
determined in accordance with the following table:
The applicable
For taxable years beginning in: percentage is:
1997.......................................... 14
1998.......................................... 13
1999.......................................... 12
2000.......................................... 11
2001.......................................... 10
2002.......................................... 9
2003.......................................... 8
2004.......................................... 7
2005.......................................... 6
2006.......................................... 5
2007.......................................... 4
2008.......................................... 3
2009.......................................... 2
2010.......................................... 1
2011 or thereafter............................ 0.
''(3) Net capital gain taken into account as investment
income.--For purposes of this subsection, 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
investment income under section 163(d)(4)(B)(iii).''
(b) Minimum Tax.--
(1) In general.--Subparagraph (A) of section 55(b)(1) is
amended by redesignating clauses (ii) and (iii) as clauses
(iii) and (iv), respectively, 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 equal to the
applicable percentage (as defined in
section 1(h)) of the lesser of the net
capital gain or the taxable excess.''
(2) Conforming amendment.--Clause (iii) of section
55(a)(1)(A) (as redesignated by paragraph (1)) is amended by
striking ''clause (i)'' and inserting ''this subparagraph''.
(c) Conforming Amendments.--
(1) Section 1202 (relating to 50-percent exclusion for gain
from certain small business stock) is hereby repealed.
(2)(A) Subsection (a) of section 57 is amended by striking
paragraph (7).
(B) Subclause (II) of section 53(d)(1)(B)(ii) is amended by
striking '', (5), and (7)'' and inserting ''and (5)''.
(3) Paragraph (1) of section 170(e) of such Code is
amended--
(A) by striking ''the amount of gain'' in the
material following subparagraph (B)(ii) and inserting
''the appropriate percentage of the amount of gain'',
and
(B) by adding at the end the following new
sentence: ''For purposes of subparagraph (B), the term
'appropriate percentage' means the percentage equal to
the fraction the numerator of which is the applicable
percentage under section 1(h) or 1201(b) (whichever is
appropriate) over 28 percent (35 percent in the case of
a corporation).''
(4) Paragraph (2) of section 172(d) is amended to read as
follows:
''(2) Capital gains and losses of taxpayers other than
corporations.--In the case of a taxpayer other than a
corporation, the amount deductible on account of losses from
sales or exchanges of capital assets shall not exceed the
amount includible on account of gains from sales or exchanges
of capital assets.''
(5) Paragraph (4) of section 642(c) is amended by striking
the first sentence.
(6) Paragraph (3) of section 643(a) is amended by striking
the last sentence.
(7) Paragraph (4) of section 691(c) is amended by striking
''1202,''.
(8) The second sentence of section 871(a)(2) is amended by
striking ''such gains and losses shall be determined without
regard to section 1202 and''.
(9) Subsection (a) of section 1044 is amended by striking
the last sentence.
(10) Paragraph (1) of section 1445(e) is amended by
striking ''28 percent'' and inserting ''the applicable
percentage under section 1(h)''.
(11) Section 6652 is amended by striking subsection (k) and
by redesignating subsections (l) and (m) as subsections (k) and
(l), respectively.
(12)(A) The second sentence of section 7518(g)(6)(A) is
amended by striking ''28 percent'' and all that follows and
inserting ''the applicable percentage under the appropriate
such section.''.
(B) The second sentence of section 607(h)(6)(A) of the
Merchant Marine Act, 1936 is amended by striking ''28 percent''
and all that follows and inserting ''the applicable percentage
under the appropriate such section.''.
(13) The table of sections for part I of subchapter P of
chapter 1 is amended by striking the item relating to section
1202.
(d) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to taxable years
beginning after December 31, 1996.
(2) Withholding.--The amendment made by subsection (c)(10)
shall apply to amounts paid after the date of the enactment of
this Act.

SEC. 3. PHASEDOWN OF CAPITAL GAINS RATE FOR CORPORATIONS.

(a) In General.--Section 1201 is amended to read as follows:

''SEC. 1201. ALTERNATIVE TAX FOR CORPORATIONS.

''(a) General Rule.--If for any taxable year a corporation has a
net capital gain, then, in lieu of the tax imposed by sections 11, 511,
and 831 (a) and (b) (whichever is applicable), there is hereby imposed
a tax (if such tax is less than the tax imposed by such sections) which
shall consist of the sum of--
''(1) a tax computed on the taxable income reduced by the
amount of the net capital gain, at the rates and in the manner
as if this subsection had not been enacted, plus
''(2) a tax equal to the applicable percentage of the net
capital gain.
''(b) Applicable Percentage.--For purposes of paragraph (1), the
term 'applicable percentage' means the percentage determined in
accordance with the following table:
The applicable
For taxable years beginning in: percentage is:
1997.......................................... 28
1998.......................................... 27
1999.......................................... 26
2000.......................................... 25
2001.......................................... 24
2002.......................................... 23
2003.......................................... 22
2004.......................................... 21
2005.......................................... 20
2006.......................................... 19
2007.......................................... 18
2008.......................................... 17
2009.......................................... 16
2010.......................................... 15
2011 or thereafter............................ 14.
''(c) Cross References.--

''For computation of the alternative
tax--
''(1) in the case of life insurance
companies, see section 801(a)(2),
''(2) in the case of regulated
investment companies and their shareholders, see section 852(b)(3) (A)
and (D), and
''(3) in the case of real estate
investment trusts, see section 857(b)(3)(A).''

(b) Minimum Tax.--Subparagraph (B) of section 55(b)(1) is amended
to read as follows:
''(B) Corporations.--
''(i) In general.--In the case of a
corporation, the tentative minimum tax for the
taxable year is--
''(I) 20 percent of so much of the
alternative minimum taxable income for
the taxable year as exceeds the
exemption amount, reduced by
''(II) the alternative minimum tax
foreign tax credit for the taxable
year.
''(ii) Maximum rate of tax on net capital
gain.--If for any taxable year the applicable
percentage under section 1201(b) is less than
20 percent, the amount determined under
subclause (I) of clause (i) for such taxable
year shall not exceed the sum of--
''(I) the amount determined under
such subclause computed at the rates
and in the same manner as if this
clause had not been enacted on the
excess described in such subclause
reduced by the net capital gain, plus
''(II) a tax equal to the
applicable percentage (as defined in
section 1201(b)) of the lesser of the
net capital gain or such excess.''
(c) Technical Amendments.--
(1) Clause (iii) of section 852(b)(3)(D) is amended--
(A) by striking ''65 percent'' and inserting ''the
appropriate percentage'', and
(B) by adding at the end the following new
sentence: ''For purposes of this clause, the term
'appropriate percentage' means the percentage equal to
the excess of 100 percent over the applicable
percentage under section 1201(b).''
(2) Subsection (e) of section 1445 is amended by striking
''35 percent'' each place it appears and inserting ''the
applicable percentage under section 1201(b)''.
(d) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to taxable years
ending after December 31, 1996.
(2) Withholding.--The amendment made by subsection (c)(2)
shall apply to amounts paid after the date of the enactment of
this Act.
(e) Transitional Rule.--
(1) In general.--In the case of any taxable year ending
after December 31, 1996, and beginning on or before such date,
paragraph (2) of section 1201(a) of the Internal Revenue Code
of 1986 (as amended by this section) shall be applied as if it
read as follows:
''(2) the sum of--
''(A) a tax of 28 percent of the lesser of--
''(i) the net capital gain for the taxable
year, or
''(ii) the net capital gain taking into
account only gain or loss properly taken into
account for the portion of the taxable year
after December 31, 1996, plus
''(B) a tax of 35 percent of the excess of--
''(i) the net capital gain for the taxable
year, over
''(ii) the amount of net capital gain taken
into account under subparagraph (A).''
(2) Special rule for pass-thru entities.--
(A) In general.--In applying paragraph (1) with
respect to any pass-thru entity, the determination of
when gains and losses are properly taken into account
shall be made at the entity level.
(B) Pass-thru entity defined.--For purposes of
subparagraph (A), the term ''pass-thru entity'' means--
(i) a regulated investment company,
(ii) a real estate investment trust,
(iii) an S corporation,
(iv) a partnership,
(v) an estate or trust, and
(vi) a common trust fund.

SEC. 4. INCREASE IN UNIFIED ESTATE AND GIFT TAX CREDIT.

(a) In General.--
(1) Subsection (a) of section 2010 (relating to unified
credit against estate tax) is amended by striking ''$192,800''
and inserting ''the applicable credit amount''.
(2) Section 2010 is amended by redesignating subsection (c)
as subsection (d) and by inserting after subsection (b) the
following new subsection:
''(c) Applicable Credit Amount.--For purposes of this section, the
applicable credit amount is the amount of the tentative tax which would
be determined under the rate schedule set forth in section 2001(c) if
the amount with respect to which such tentative tax is to be computed
were $1,000,000.''
(3) Paragraph (1) of section 6018(a) is amended by striking
''$600,000'' and inserting ''$1,000,000''.
(4) Paragraph (2) of section 2001(c) is amended by striking
''$21,040,000'' and inserting ''the amount at which the average
tax rate under this section is 55 percent''.
(5) Subparagraph (A) of section 2102(c)(3) is amended by
striking ''$192,800'' and inserting ''the applicable credit
amount under section 2010(c)''.
(b) Unified Gift Tax Credit.--Paragraph (1) of section 2505(a) is
amended by striking ''$192,800'' and inserting ''the applicable credit
amount under section 2010(c)''.
(c) Effective Date.--The amendments made by this section shall
apply to the estates of decedents dying, and gifts made, after the date
of the enactment of this Act.

SEC. 5. INCREASE IN MAXIMUM BENEFIT UNDER SPECIAL ESTATE TAX VALUATION
RULES FOR CERTAIN FARM, ETC., REAL PROPERTY.

(a) In General.--Paragraph (2) of section 2032A(a) (relating to
limitation on aggregate reduction in fair market value) is amended by
striking ''$750,000'' and inserting ''$1,000,000''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to decedents dying after the date of the enactment of this Act.
Output:
Small Business-Family Farm and Investment Fairness Act of 1997 - Amends the Internal Revenue Code to: (1) phaseout the capital gains tax for individuals; (2) phasedown the capital gains rate for corporations; (3) increase the unified estate and gift tax credit; and (5) increase the maximum benefit under the special estate tax valuation rules for certain real and farm property.