Teacher:In this task, you are given text for US Congressional and California state bills, your task is to generate a summary for this bill.
Teacher: Now, understand the problem? Solve this instance: SECTION 1. SHORT TITLE.

This Act may be cited as the ''Investment Tax Simplification Act of
2005''.

SEC. 2. PERMANENT REDUCTION IN CAPITAL GAINS RATES FOR INDIVIDUALS AND
CORPORATIONS.

(a) Repeal of Sunset of Reduction in Capital Gains Rates for
Individuals.--Section 303 of the Jobs and Growth Tax Relief
Reconciliation Act of 2003 shall not apply to section 301 of such Act.
(b) Further Reduction in and Simplification of Capital Gains Rates
for Individuals.--
(1) In general.--Paragraph (1) of section 1(h) of the
Internal Revenue Code of 1986 is amended to read as follows:
''(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, and
''(B) 15 percent of the excess (if any) of--
''(i) the net capital gain (or, if less,
taxable income), over
''(ii) the amount of taxable income which
would (without regard to this paragraph) be
taxed at a rate below 25 percent.''.
(2) Alternative minimum tax.--Paragraph (3) of section
55(b) of such Code is amended to read as follows:
''(3) Maximum rate of tax on net capital gain of
noncorporate taxpayers.--The amount determined under the first
sentence of paragraph (1)(A)(i) shall not exceed the sum of--
''(A) the amount determined under such first
sentence computed at the rates and in the same manner
as if this paragraph had not been enacted on the
taxable excess reduced by the net capital gain, plus
''(B) the amount determined under section
1(h)(1)(B).''.
(3) Conforming amendments.--
(A)(i) Subsection (h) of section 1 of such Code is
amended by striking paragraphs (3) through (8) and by
redesignating paragraphs (9), (10), and (11) as
paragraphs (3), (4), and (5), respectively.
(ii) Sections 163(d)(4)(B), 854(b)(5), and
857(c)(2)(D) of such Code are each amended by striking
''section 1(h)(11)(B)'' and inserting ''section
1(h)(5)(B)''.
(iii) Sections 301(f)(4), 306(a)(1)(D), 584(c),
702(a)(5), 854(a), and 854(b)(2) of such Code are each
amended by striking ''section 1(h)(11)'' and inserting
''section 1(h)(5)''.
(iv) The heading of section 857(c)(2) of such Code
is amended by striking ''Section 1(h)(11)'' and
inserting ''Section 1(h)(5)''.
(B) Section 4985(a)(1) of such Code is amended by
striking ''section 1(h)(1)(C)'' and inserting ''section
1(h)(1)(B)''.
(c) Reduced Capital Gains Rate for Corporations.--
(1) In general.--Section 1201 of such Code is amended by
striking ''35 percent'' both places it appears and inserting
''15 percent''.
(2) Alternative minimum tax.--Section 55(b) of such Code is
amended by adding at the end the following new paragraph:
''(4) Maximum rate of tax on net capital gain of
corporations.--The amount determined under paragraph (1)(B)(i)
shall not exceed the sum of--
''(A) the amount determined under such paragraph
computed at the rates and in the same manner as if this
paragraph had not been enacted on the taxable excess
reduced by the net capital gain, plus
''(B) the amount determined under section 1201.''.
(3) Technical amendments.--
(A) Section 1445(e)(1) of such Code is amended by
striking ''35 percent (or, to the extent provided in
regulations, 15 percent)'' and inserting ''15
percent''.
(B) Section 1445(e)(2) of such Code is amended by
striking ''35 percent'' and inserting ''15 percent''.
(C) Section 7518(g)(6)(A) of such Code is amended
by striking ''(34 percent in the case of a
corporation)''.
(D) Section 607(h)(6)(A) of the Merchant Marine
Act, 1936 is amended by striking ''(34 percent in the
case of a corporation)''.
(d) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to taxable years
ending after the date of the enactment of this Act.
(2) Withholding.--The amendment made by subsection
(c)(3)(B) shall apply to amounts paid after the date of the
enactment of this Act.
Student:
Investment Tax Simplification Act of 2005 - Makes permanent the reduction in individual capital gains tax rates enacted by the Jobs and Growth Tax Relief Reconciliation Act of 2003.

Amends the Internal Revenue Code to reduce the maximum capital gains tax rates for individuals and corporations.