,,ii #aacth ,,congress #ast ,session ,s4 #afaf ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,october #cj1 #bjac,mr4 ,lee introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to provide for simplification1 to reduce the number of tax brackets1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,family ,fairness and ,opportunity ,tax ,reform ,act4 #b4 ,consolidation of tax brackets and modifications to tax rates 7a7 ,in general ,section #a of the ,internal ,revenue ,code of #aihf is amended by striking subsections 7a7 through 7d7 and inserting the following3 7a7 ,in general ,there is hereby imposed on the taxable income of every individual a tax determined in accordance with the following table3 ,if taxable income is3,the tax is3,not over the first bracket dollar limit#ae of taxable income4,over the first bracket dollar limit,an amount equal to #ae of the first bracket dollar limit1 plus #ce of the excess over such first bracket dollar limit4 7b7 ,first bracket dollar limit ,for purposes of this section1 the first bracket dollar limit is-- 7#a7 in the case of-- 7,a7 a married individual 7as defined in section #ggjc7 who makes a single return jointly with the individual's spouse under section #fjac1 or 7,b7 a surviving spouse 7as defined in section #b7;a771 #bjj percent of the amount determined under paragraph 7#b71 and 7#b7 in the case of any other individual1 #hg1hej4 7c7 ,inflation adjustment for rates applicable to individuals 7#a7 ,in general ,in the case of any taxable year beginning in a calendar year after #bjac1 the dollar amount in subsection 7b77#b7 shall be increased by an amount equal to-- 7,a7 such dollar amount1 multiplied by 7,b7 the cost-of-living adjustment determined under subsection 7f77#c7 for the calendar year in which the taxable year begins1 by substituting calendar year #bjab for calendar year #aiib in subparagraph 7,b7 thereof4 7#b7 ,rounding ,if any increase determined under paragraph 7#a7 is not a multiple of #ej1 such amount shall be rounded to the next lowest multiple of #ej4 4 7b7 ,treatment of capital gains rate 7#a7 ,zero percent rate ,clause 7i7 of section #a7;h77#a77;,b7 of the ,internal ,revenue ,code of #aihf is amended to read as follows3 7i7 #cf1bej 7#bjj percent of such amount in the case of a joint return or a surviving spouse 7as defined in section #b7;a7771 over 4 7#b7 #bj percent rate ,subclause 7,i7 of section #a7;h77#a77;,c77ii7 of such ,code is amended to read as follows3 7,i7 #djj1jjj 7#dej1jjj in the case of a joint return or a surviving spouse 7as defined in section #b7;a7771 over 4 7#c7 ,inflation adjustment ,subsection 7h7 of section #a of such ,code is amended by adding at the end the following new paragraph3 7#ab7 ,inflation adjustment 7,a7 ,in general ,in the case of any taxable year beginning in a calendar year after #bjac1 each of the dollar amounts in subparagraphs 7,b77i7 and 7,c77ii77,i7 of paragraph 7#a7 shall be increased by an amount equal to-- 7i7 such dollar amount1 multiplied by 7ii7 the cost-of-living adjustment determined under subsection 7f77#c7 for the calendar year in which the taxable year begins1 by substituting calendar year #bjab for calendar year #aiib in subparagraph 7,b7 thereof4 7,b7 ,rounding ,if any increase determined under paragraph 7#a7 is not a multiple of #ej1 such amount shall be rounded to the next lowest multiple of #ej4 4 7c7 ,conforming amendments 7#a7 ,subsection 7f7 of section #a of such ,code is amended-- 7,a7 by striking the heading and inserting ,inflation adjustments for estates and trusts1 7,b7 in paragraph 7#a71 by striking subsections 7a71 7b71 7c71 7d71 and 7e7 and inserting subsection 7e71 7,c7 in paragraph 7#b7-- 7i7 by striking subsection 7a71 7b71 7c71 7d71 and 7e71 as the case may be1 and inserting subsection 7e71 and 7ii7 by striking except as provided in paragraph 7#h711 and 7,d7 by striking paragraphs 7#f71 7#g71 and 7#h7 and inserting the following3 7#f7 ,rounding ,if any increase determined under paragraph 7#b77;,a7 is not a multiple of #ej1 such increase shall be rounded to the next lowest multiple of #ej4 4 7#b7 ,section #a of such ,code is amended by striking subsection 7i74 7#c7 ,section #b of such ,code is amended by striking subsection 7b74 7#d7 ,paragraph 7#b7 of section #be;,b7b7 of the ,internal ,revenue ,code of #aihf is amended to read as follows3 7#b7 ,other returns ,in the case of any taxpayer not described in paragraph 7#a71 the applicable percentage shall be determined under paragraph 7#a7 except that such paragraph shall be applied by substituting for each dollar amount therein 7as adjusted under paragraph 7#c77 a dollar amount equal to #ej percent of such dollar amount4 4 7d7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjac4 #c4 ,repeal of alternative minimum tax 7a7 ,in general ,subsection 7a7 of section #ee of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new flush sentence3 ,no tax shall be imposed by this section for any taxable year beginning after ,december #ca1 #bjac1 and the tentative minimum tax of any taxpayer for any such taxable year shall be zero for purposes of this title4 4 7b7 ,effective date ,the amendment made by this section shall apply to taxable years beginning after ,december #ca1 #bjac4 #d4 ,additional child tax credit 7a7 ,in general ,section #bd of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new subsection3 7g7 ,additional refundable credit 7#a7 ,in general ,in addition to the amount allowed under subsection 7a71 there shall be allowed as a credit against tax imposed by this chapter for the taxable year with respect to each qualifying child of the taxpayer an amount equal to #b1ejj4 7#b7 ,inflation adjustment 7,a7 ,in general ,in the case of any taxable year beginning in a calendar year after #bjac1 the dollar amount in paragraph 7#a7 shall be the greater of the amount in effect under such paragraph for the preceding taxable year or the amount determined under subparagraph 7,b74 7,b7 ,adjustment 7i7 ,in general ,not later than ,november #a of #bjac1 and each subsequent calendar year1 the ,secretary shall make and publish the determination under this subparagraph for the succeeding calendar year4 7ii7 ,amount determined ,the amount determined under this subparagraph for any calendar year is an amount equal to-- 7,i7 #b1ejj1 multiplied by 7,,ii7 the ratio of the national average wage index 7as defined in section #bji7k77#a7 of the ,social ,security ,act7 for the calendar year before the calendar year in which the determination under this subparagraph is made to the national average wage index 7as so defined7 for #bjab4 7iii7 ,rounding ,if any increase determined under clause 7i7 is not a multiple of #ej1 such amount shall be rounded to the next lowest multiple of #ej4 7#c7 ,portion of additional credit refundable 7,a7 ,in general ,the aggregate credits allowed to a taxpayer under subpart ,c shall be increased by the lesser of-- 7i7 the credit which would be allowed under this section without regard to this subsection and the limitation under section #bf7;a71 or 7ii7 the amount by which the aggregate amount of credits allowed by this subpart 7determined without regard to this subsection7 would increase if the limitation imposed by section #bf7;a7 were increased by the excess 7if any7 of-- 7,i7 the taxpayer's social security taxes for the taxable year1 over 7,,ii7 the credit allowed under section #cb for the taxable year4 ,the amount of the credit allowed under this paragraph shall not be treated as a credit allowed under this subpart and shall reduce the amount of credit otherwise allowable under paragraph 7#a7 without regard to section #bf7;a74 7,b7 ,social security taxes ,for purposes of subparagraph 7,a71 the term social security taxes has the meaning given such term under subsection 7d77#b71 except that-- 7i7 such term shall include the amount of taxes imposed by section #caaa and #cbba7;a7 on amounts paid with respect to such taxpayer during the calendar year in which the taxable year begins1 and 7ii7 in applying clauses 7ii7 and 7iii7 of subparagraph 7,a7 thereof1 #ajj percent shall be substituted for #ej percent each place it appears4 7,c7 ,coordination with subsection 7a7 ,for purposes of this title1 the amount of any refundable credit allowed by reason of subsection 7d7 shall be taken into account before the application of this paragraph4 4 7b7 ,conforming amendments 7#a7 ,subsection 7a7 of section #bd of the ,internal ,revenue ,code of #aihf is amended by striking for which the taxpayer is allowed a deduction under section #aea4 7#b7 ,subparagraph 7,a7 of section #bd7;d77#a7 of such ,code is amended by striking section and inserting subsection 7a74 7c7 ,effective date ,the amendment made by this section shall apply to taxable years beginning after ,december #ca1 #bjac4 #e4 ,personal credit 7a7 ,in general 7#a7 ,allowance of credit ,subpart ,a of part ,,iv of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf is amended by inserting after section #be;,d the following new section3 #be;,e4 ,personal credit 7a7 ,allowance of credit ,in the case of an individual1 there shall be allowed a credit against the tax imposed by this chapter for the taxable year an amount equal to-- 7#a7 in the case of an individual who does not file a joint return1 #b1jjj1 and 7#b7 in the case of an individual who files a joint return or a surviving spouse 7as defined in section #b7;a771 #bjj percent of the amount in effect under paragraph 7#a74 7b7 ,limitation ,no credit shall be allowed under subsection 7a7 to any individual who is a qualifying child 7as defined in section #bd7;c77 with respect to whom a credit is allowed under section #bd to another taxpayer for any taxable year beginning in the same calendar year as such taxable year4 7c7 ,inflation adjustment 7#a7 ,in general ,in the case of any taxable year beginning in a calendar year after #bjac1 the dollar amount under subsection 7a77#a7 shall be increased by an amount equal to-- 7,a7 such dollar amount1 multiplied by 7,b7 the cost-of-living adjustment determined under section #a7;f77#c7 for the calendar year in which the taxable year begins1 by substituting calendar year #bjab for calendar year #aiib in subparagraph 7,b7 thereof4 7#b7 ,rounding ,if any increase determined under paragraph 7#a7 is not a multiple of #ej1 such amount shall be rounded to the next lowest multiple of #ej4 4 7#b7 ,conforming amendment ,the table of sections for subpart ,a of part ,,iv of subchapter ,a of chapter #a of such ,code is amended by inserting after the item relating to section #be;,d the following new item3 ,sec4 #be;,e4 ,personal credit4 4 7b7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjac4 #f4 ,repeal of standard deduction1 certain personal exemptions1 and itemized deductions other than the mortgage interest deduction and charitable contribution deduction 7a7 ,repeal of standard deduction and itemized deductions 7#a7 ,in general ,section #fc of the ,internal ,revenue ,code of #aihf is amended by striking subsections 7b7 through 7g7 and inserting the following3 7b7 ,itemized deductions not allowed for individuals 7#a7 ,in general ,in the case of an individual1 no deduction shall be allowed for any itemized deduction4 7#b7 ,itemized deductions ,for purposes of this subtitle1 the term itemized deductions means the deductions allowable under this chapter other than-- 7,a7 the deduction for qualified residence interest 7as defined in section #afc7;h77#c771 7,b7 the deduction allowed under section #agj1 and 7,c7 any other deductions allowable in arriving at adjusted gross income4 4 7#b7 ,conforming amendment ,subsection 7a7 of section #fc is amended by striking 7other than the standard deduction74 7b7 ,repeal of personal exemptions for taxpayer and spouse ,section #aea of such ,code is amended by striking subsection 7b74 7c7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjac4 #g4 ,modifications to mortgage interest deduction 7a7 ,in general ,clause 7ii7 of section #afc7;h77#c77;,b7 of the ,internal ,revenue ,code of #aihf is amended-- 7#a7 by striking #a1jjj1jjj 7#ejj1jjj in the case of a married individual filing a separate return and inserting #cjj1jjj1 and 7#b7 by striking #a1jjj1jjj in the heading and inserting #cjj1jjj4 7b7 ,effective date ,the amendments made by this section shall apply to indebtedness incurred in taxable years beginning after ,december #ca1 #bjac4 #h4 ,repeal of additional health taxes 7a7 ,repeal of additional hospital insurance tax on high-,income taxpayers 7#a7 ,,fica 7,a7 ,in general ,section #caja7;b7 of the ,internal ,revenue ,code of #aihf is amended to read as follows3 7b7 ,hospital insurance ,in addition to the tax imposed by the preceding subsection1 there is hereby imposed on the income of every individual a tax equal to #a4de percent of the wages 7as defined in section #caba7;a77 received by him with respect to employment 7as defined in section #caba7;b774 4 7,b7 ,conforming amendments 7i7 ,section #cajb of such ,code is amended by striking subsection 7f74 7ii7 ,section #ffed of the ,internal ,revenue ,code of #aihf is amended by striking subsection 7m7 and by redesignating subsections 7n7 as subsection 7m74 7#b7 ,,seca 7,a7 ,in general ,section #adja7;b7 of the ,internal ,revenue ,code of #aihf is amended to read as follows3 7b7 ,hospital insurance ,in addition to the tax imposed by the preceding subsection1 there is hereby imposed for each taxable year1 on the self-employment income of every individual1 a tax equal to #b4ij percent of the amount of the self-employment income for such taxable year4 4 7,b7 ,conforming amendments 7i7 ,section #afd7;f7 of such ,code is amended by striking 7other than the taxes imposed by section #adjb7;b77#b774 7ii7 ,section #adjb7;a77#ab77;,b7 of such ,code is amended by striking 7determined without regard to the rate imposed under paragraph 7#b7 of section #adja7;b774 7#c7 ,effective date ,the amendments made by this subsection shall apply with respect to remuneration received1 and taxable years beginning after1 ,december #ca1 #bjac4 7b7 ,repeal of unearned income medicare contribution 7#a7 ,in general ,subtitle ,a of the ,internal ,revenue ,code of #aihf is amended by striking chapter #b;,a4 7#b7 ,conforming amendments 7,a7 ,section #ffed of the ,internal ,revenue ,code of #aihf is amended-- 7i7 in subsection 7a71 by striking the tax under chapter #b1 and the tax under chapter #b;,a and inserting and the tax imposed under chapter #b1 and 7ii7 in subsection 7f7-- 7,i7 by striking paragraph 7#c7 and redesignating paragraph 7#d7 as paragraph 7#c71 and 7,,ii7 by striking plus at the end of paragraph 7#b7 and inserting minus4 7,b7 ,the table of chapters for subchapter ,a of chapter #a of such ,code is amended by striking the item relating to chapter #b;,a4 7#c7 ,effective date ,the amendments made by this subsection shall apply to taxable years beginning after ,december #ca1 #bjac4 #i4 ,technical and conforming amendments ,the ,secretary of the ,treasury or the ,secretary's delegate shall1 not later than #ij days after the date of the enactment of this ,act1 submit to the ,committee on ,ways and ,means of the ,house of ,representatives and the ,committee on ,finance of the ,senate a draft of any technical and conforming changes in the ,internal ,revenue ,code of #aihf which are necessary to reflect throughout such ,code the purposes of the provisions of1 and amendments made by1 this ,act4