,,ii #aacth ,,congress #b;d ,session ,s4 #cjje ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,december #aa1 #bjad ,mr4 ,cardin 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 a progressive consumption tax and to reform the income tax1 and for other purposes4 #a4 ,short title1 etc 7a7 ,in general ,this ,act may be cited as the ,progressive ,consumption ,tax ,act of #bjad4 7b7 ,reference ,except as otherwise expressly provided1 whenever in this ,act an amendment or repeal is expressed in terms of an amendment to1 or repeal of1 a section or other provision1 the reference shall be considered to be made to a section or other provision of the ,internal ,revenue ,code of #aihf4 7c7 ,table of contents ,the table of contents of this ,act is as follows3 ,sec4 #a4 ,short title1 etc4 ,,title ,i--,progressive consumption tax ,sec4 #aja4 ,imposition of progressive consumption tax4 ,,title ,,ii--,individual and corporate tax reform ,subtitle ,a--,individual income tax reforms ,sec4 #bja4 ,individual income tax rate reductions4 ,sec4 #bjb4 ,family allowance amounts4 ,sec4 #bjc4 ,repeal of limitations relating to itemized deductions4 ,sec4 #bjd4 ,termination of separate treatment of capital gains4 ,sec4 #bje4 ,repeals4 ,sec4 #bjf4 ,establishment of progressive tax rebate4 ,sec4 #bjg4 ,technical and conforming amendments4 ,subtitle ,b--,corporate tax reforms ,sec4 #baa4 ,corporate income tax rate reduction4 ,,title ,,iii--,refund of excess consumption tax revenue ,sec4 #cja4 ,refunds of excess consumption tax revenue4 ,i ,progressive consumption tax #aja4 ,imposition of progressive consumption tax 7a7 ,in ,general ,subtitle ,d is amended by inserting before chapter #ca the following new chapter3 #cj ,progressive consumption tax ,subchapter ,a4 ,imposition of tax ,subchapter ,b4 ,taxable supply ,subchapter ,c4 ,credit against tax ,subchapter ,d4 ,administration ,subchapter ,e4 ,definitions and special rules ,a ,imposition of ,tax ,sec4 #cija4 ,imposition of tax4 ,sec4 #cijb4 ,taxable amount4 #cija4 ,imposition of tax 7a7 ,general ,rule ,a tax is hereby imposed on every taxable supply4 7b7 ,amount of ,tax 7#a7 ,in general ,except as provided in paragraph 7#b71 the amount of the tax shall be #aj percent of the taxable amount4 7#b7 ,special rate for exports ,the amount of the tax shall be zero with respect to the provision of any supply which is-- 7,a7 a supply of tangible personal property that is exported from the ,united ,states within #ij days after the provider gives an invoice for the supply1 or 7,b7 a supply1 other than a supply of tangible personal property-- 7i7 which is provided to a recipient that is not in the ,united ,states when the supply is performed or otherwise done1 and 7ii7 the use of which takes place outside of the ,united ,states4 #cijb4 ,taxable amount 7a7 ,amount charged customer ,for purposes of this chapter1 the taxable amount for any taxable supply for which money is the only consideration shall be the price charged by the provider-- 7#a7 including all invoiced charges for transportation1 and other items payable to the provider with respect to the supply1 but 7#b7 excluding the tax imposed by section #cija with respect to the supply and excluding any ,state and local sales and use taxes with respect to the supply4 7b7 ,barter transactions ,for purposes of this chapter1 the taxable amount for any taxable supply which includes consideration other than money shall be the fair market value of the consideration 7including all invoiced charges for transportation and other items payable to the provider7 plus the amount of any money paid in consideration4 7c7 ,imports ,for purposes of this chapter1 the taxable amount in the case of any import shall be-- 7#a7 the customs value plus customs duties and any other duties which may be imposed1 or 7#b7 if there is no such customs value1 the fair market value 7determined as if the importer had sold the supply74 ,for purposes of this subsection1 the customs value of any import shall include all invoiced charges for transportation and other items payable to the importer with respect to the supply4 7d7 ,special rule in the case of sales of certain used consumer goods ,for purposes of this chapter1 if-- 7#a7 a person acquires any tangible personal property in a transaction which was not taxable under this chapter1 and 7#b7 such property had been used by an ultimate consumer before such acquisition1 the taxable amount in the case of any sale of such property by such person 7determined without regard to this subsection7 shall be reduced by the amount paid for such property by such person4 ,b ,taxable supply ,sec4 #ciaa4 ,taxable supply4 ,sec4 #ciab4 ,supplies made in connection with the ,united ,states4 ,sec4 #ciac4 ,exempt supply4 #ciaa4 ,taxable supply 7a7 ,in general ,for purposes of this chapter1 the term taxable supply means-- 7#a7 the importation of property into the ,united ,states1 and 7#b7 any supply 7other than an exempt supply7-- 7,a7 which is provided-- 7i7 in the course of carrying on a trade or business1 7ii7 in the case of an organization exempt from tax under section #eja7;a71 in furtherance of the activities related to the purpose or function constituting the basis of its exemption under section #eja1 or 7iii7 in the case of a ,state1 an ,indian tribal government1 a possession of the ,united ,states1 or any political subdivision of any of the foregoing1 or the ,united ,states or the ,district of ,columbia1 in carrying out any activity that is not an essential governmental function1 7,b7 for which consideration is provided in return1 and 7,c7 which is made in connection with the ,united ,states4 7b7 ,supply ,for purposes of this chapter-- 7#a7 ,in general ,the term supply means any supply whatsoever1 including-- 7,a7 the sale or provision 7including through renting1 leasing1 or licensing7 of property1 7,b7 the performance of services1 7,c7 the grant1 assignment1 or surrender of real property1 7,d7 the creation1 grant1 transfer1 assignment1 or surrender of any right1 7,e7 financial supplies1 and 7,f7 an entry into1 or release from1 an obligation or agreement to perform or refrain from performing an act4 7#b7 ,special rule for services for employer ,an employee's services for the employee's employer shall not be treated as a supply4 #ciab4 ,supplies made in connection with the ,united ,states 7a7 ,tangible property ,for purposes of this chapter-- 7#a7 ,in general ,the supply of tangible property is made in connection with the ,united ,states if-- 7,a7 the property is delivered or made available to the recipient in the ,united ,states1 or 7,b7 the property is assembled in or removed from any location in the ,united ,states4 7#b7 ,real property ,the supply of real property is made in connection with the ,united ,states if the real property is located in the ,united ,states4 7b7 ,services1 intangible property1 and other supplies ,for purposes of this chapter1 the supply of anything other than tangible property or real property is made in connection with the ,united ,states if-- 7#a7 the supply is used1 performed1 or otherwise done in the ,united ,states1 or 7#b7 the supply is provided through a trade or business in the ,united ,states4 #ciac4 ,exempt supply 7a7 ,in general ,an exempt supply shall not be subject to tax under this chapter4 7b7 ,exempt supply ,for purposes of this chapter-- 7#a7 ,in general ,the term exempt supply means-- 7,a7 the rental or leasing of residential real property1 7,b7 any sale of qualified residential real property1 7,c7 any financial supply1 and 7,d7 any taxable supply 7or category of such supplies7 treated as an exempt supply under section #cicb7;b74 7#b7 ,qualified residential real property ,for purposes of paragraph 7#a71 the term qualified residential real property means residential real property-- 7,a7 which-- 7i7 has previously been sold as residential real property1 or 7ii7 has been continuously rented for #e years or more1 and 7,b7 to which substantial renovations have not been made after the date of the enactment of this chapter4 ,c ,credit against tax ,sec4 #ciaf4 ,credit against tax4 #ciaf4 ,credit against tax 7a7 ,general rule ,there shall be allowed as a credit against the aggregate amount of tax imposed by section #cija with respect to all taxable supplies made by the taxpayer during the taxable period an amount equal to the aggregate amount of tax imposed by section #cija on creditable acquisitions of the taxpayer during such taxable period4 7b7 ,creditable acquisitions ,for purposes of this chapter1 the term creditable acquisition means the acquisition or receipt of any supply-- 7#a7 which was subject to tax under section #cija at the time it was provided to the taxpayer1 7#b7 which was used by the taxpayer-- 7,a7 in the course of carrying on a trade or business1 7,b7 in the case of a taxpayer exempt from tax under section #eja7;a71 in furtherance of the activities related to the purpose or function constituting the basis of the exemption under section #eja1 or 7,c7 in the case of a ,state1 an ,indian tribal government1 a possession of the ,united ,states1 or any political subdivision of any of the foregoing1 or the ,united ,states or the ,district of ,columbia1 in carrying out any activity that is not an essential governmental function1 and 7#c7 which was not used by the taxpayer to make an exempt supply4 7c7 ,exempt supplies1 etc ,if supplies are used partly for a use described in subsection 7b77#b7 and partly for another use1 the credit shall be allowable only with respect to the supplies used as described in subsection 7b77#b74 7d7 ,excess credit treated as overpayment 7#a7 ,in general ,if for any taxable period the amount of the credit allowable by subsection 7a7 exceeds the aggregate amount of the tax imposed by section #cija for such period1 such excess shall be treated as an overpayment of the tax imposed by section #cija4 7#b7 ,time when overpayment arises ,any overpayment under paragraph 7#a7 for any taxable period shall be treated as arising on the later of-- 7,a7 the due date for the return for such period1 or 7,b7 the date on which the return is filed4 ,d ,administration ,sec4 #ciba4 ,provider liable for tax4 ,sec4 #cibb4 ,tax invoices4 ,sec4 #cibc4 ,time for filing return and claiming credit2 deposits of tax4 ,sec4 #cibd4 ,treatment of related businesses1 etc4 ,sec4 #cibe4 ,reports4 ,sec4 #cibf4 ,regulations4 #ciba4 ,provider liable for tax 7a7 ,in general ,except as provided in subsection 7b71 the person providing the supply shall be liable for the tax imposed by section #cija4 7b7 ,special rule for imports ,the person receiving the supply shall be liable for the tax imposed under section #cija-- 7#a7 in the case of any taxable supply described in section #ciaa7;a77#a71 and 7#b7 in the case of any taxable supply which is not a supply of tangible property and which is-- 7,a7 performed or otherwise done outside the ,united ,states1 7,b7 used in the ,united ,states1 and 7,c7 acquired for use-- 7i7 in carrying on a trade or business in the ,united ,states1 7ii7 by an organization exempt from tax under section #eja7;a71 in furtherance of activities related to the purpose or function constituting the basis of its exemption under section #eja1 or 7iii7 by a ,state1 an ,indian tribal government1 a possession of the ,united ,states1 or any political subdivision of any of the foregoing1 or the ,united ,states or the ,district of ,columbia1 in carrying out any activity that is not an essential governmental function4 #cibb4 ,tax invoices 7a7 ,in general 7#a7 ,supplies made in connection with the ,united ,states ,except as otherwise provided in this subsection1 any person providing a taxable supply shall give the recipient a tax invoice with respect to such supply4 7#b7 ,certain services performed outside the ,united ,states ,in the case of any taxable supply described in section #ciba7;b77#b71 paragraph 7#a7 shall not apply and the person receiving the taxable supply shall generate a tax invoice with respect to such supply4 7#c7 ,imports ,in the case of any taxable supply described in section #ciaa7;a71 the ,secretary1 in consultation with the ,commissioner of ,customs and ,border ,protection1 shall promulgate regulations governing the provision of tax invoices4 7b7 ,content of invoice ,the tax invoice required by subsection 7a7 with respect to any supply shall set forth-- 7#a7 the name and1 in the case of an invoice under subsection 7a77#a71 identification number of the provider1 7#b7 the name of the recipient1 7#c7 the date of the taxable supply1 7#d7 the taxable amount with respect to the taxable supply1 7#e7 the amount of the tax imposed by section #cija1 and 7#f7 such other information as may be prescribed by regulations4 7c7 ,no credit without invoice 7#a7 ,in general ,except as provided in paragraph 7#b7 or 7#c71 a taxpayer may claim a credit with respect to a creditable acquisition only if the taxpayer-- 7,a7 has in the taxpayer's possession a tax invoice which meets the requirements of this section1 and 7,b7 is named as the recipient of the supply in such invoice4 7#b7 ,employees or other agents named in invoices ,to the extent provided in regulations1 the naming of an employee or other agent of the recipient of the supply shall be treated as the naming of the recipient4 7#c7 ,waiver of invoice requirement in certain cases ,to the extent provided in regulations1 paragraph 7#a7 shall not apply-- 7,a7 where the taxpayer can demonstrate that the failure to receive or to have in the taxpayer's possession a tax invoice was without fault on the taxpayer's part1 or 7,b7 to a taxable supply 7or category of supplies7 where-- 7i7 the amount involved is de minimis1 or 7ii7 the information required by subsection 7b7 can be reliably established by sampling or by another method and can be adequately documented4 7d7 ,time for furnishing invoice ,any invoice required to be furnished by subsection 7a7 with respect to any supply shall be furnished not later than #ae business days after the tax point for such supply4 #cibc4 ,time for filing return and claiming credit2 deposits of tax 7a7 ,filing return ,before the last day of the fourth week 7third week1 in the case of any taxpayer to which subsection 7c77#b7 applies7 after the close of each taxable period1 each person liable for tax under this chapter shall file a return of the tax imposed by section #cija on taxable supplies having a tax point within such taxable period4 7b7 ,credit allowed for taxable period in which recipient receives invoice 7#a7 ,in general ,except as provided in paragraph 7#b71 a credit allowable by section #ciaf with respect to a supply may be allowed only for the first taxable period by the close of which the taxpayer-- 7,a7 has paid or accrued amounts properly allocable to the tax imposed by section #cija with respect to such supply1 and 7,b7 has a tax invoice 7or equivalent7 with respect to such supply4 7#b7 ,use for later period ,under regulations1 a credit allowable by section #ciaf may be allowed for a period after the period set forth in paragraph 7#a74 7c7 ,taxable period ,for purposes of this chapter-- 7#a7 ,in general ,except as provided in paragraph 7#b71 the term taxable period means a calendar quarter4 7#b7 ,monthly period for certain taxpayers 7,a7 ,in general ,in the case of a taxpayer who makes taxable supplies for any month in excess of #bj1jjj1jjj1 the term taxable period means a calendar month4 7,b7 ,election of #a-month period ,if the taxpayer so elects1 the term taxable period means a calendar month4 7d7 ,tax point ,for purposes of this chapter-- 7#a7 ,chapter #a rules with respect to provider govern ,except as provided in paragraph 7#b71 the tax point for any supply is the earlier of-- 7,a7 the time 7or times7 when any income from the provision of the supply should be treated by the provider as received or accrued 7or any loss should be taken into account by the seller7 for purposes of chapter #a1 or 7,b7 the time 7or times7 when the provider receives payment for the sale4 7#b7 ,imports ,in the case of the importing of property1 the tax point is when the property is entered1 or withdrawn from warehouse1 for consumption in the ,united ,states4 7e7 ,monthly deposits required ,to the extent provided in regulations1 monthly deposits may be required of the estimated liability for any taxable period for the tax imposed by section #cija4 #cibd4 ,treatment of related businesses1 etc ,for purposes of this chapter1 to the extent provided in regulations1 the taxpayer may elect-- 7#a7 to treat as #a person #b or more businesses which may be treated under section #eb7;b7 as #a employer1 and 7#b7 to treat as separate persons separate divisions of the same business4 #cibe4 ,reports ,the ,secretary shall submit to ,congress semi-annual reports on the implementation and administration of this chapter1 including the amount of revenue collected from the tax imposed under this chapter and estimates of the revenue to be collected from such tax for future period4 #cibf4 ,regulations ,the ,secretary shall prescribe such regulations as may be necessary to carry out the purposes of this chapter4 ,e ,definitions and ,special ,rules ,sec4 #cica4 ,definitions4 ,sec4 #cicb4 ,special rules4 #cica4 ,definitions ,for purposes of this chapter-- 7#a7 ,business ,the term business includes-- 7,a7 a trade1 and 7,b7 an activity regularly carried on for profit4 7#b7 ,business ,day ,the term business day means any day other than ,saturday and ,sunday and other than a legal holiday 7within the meaning of section #gejc74 7#c7 ,employee ,the term employee has the meaning such term has for purposes of chapter #bd4 7#d7 ,financial supplies ,the term financial supplies means the provision1 acquisition1 or disposal of any of the following3 a bank account1 a debit or credit arrangement1 a mortgage1 a superannuation fund1 an annuity1 insurance1 a financial guarantee1 an indemnity1 currency1 securities1 or derivatives4 7#e7 ,person ,the term person includes any governmental entity4 7#f7 ,provide2 provider ,the term provide1 when used in reference to taxable supplies 7other than in section #ciaa7;a77#b771 includes the importation of property and the term provider includes the importer of property4 7#g7 ,united ,states ,the term ,united ,states1 when used in a geographical sense1 includes a ,commonwealth and any possession of the ,united ,states4 #cicb4 ,special rules 7a7 ,coordination with subtitle ,a ,for purposes of subtitle ,a-- 7#a7 ,treatment of credit ,any credit allowable to a taxpayer under section #ciaf which is attributable to any supply shall be treated as a reduction in the amount paid or incurred by the taxpayer for such supply4 7#b7 ,amount of deduction for tax ,the amount allowable as a deduction for the tax imposed by section #cija shall be determined without regard to any credit allowable under section #ciaf4 7#c7 ,computation of percentage depletion ,for purposes of sections #fac and #fac;,a-- 7,a7 gross income shall be reduced by the amount of the tax imposed by section #cija1 and 7,b7 taxable income shall be determined without regard to any deduction allowed for such tax4 7b7 ,authority to zero rate de minimis supplies1 etc ,the ,secretary may prescribe regulations treating as an exempt supply any taxable supply 7or category of such supplies7 where-- 7#a7 the amount involved is de minimis1 or 7#b7 the revenue raised by taxing the supply is not sufficient to justify the administrative and other costs involved in the payment and collection of the tax4 4 7b7 ,clerical ,amendment ,the table of chapters for subtitle ,d is amended by inserting before the item relating to chapter #ca the following3 ,chapter #cj4 ,progressive consumption tax 4 7c7 ,effective ,date ,the amendments made by this section shall apply to supplies provided after ,december #ca1 #bjae4 ,,ii ,individual and corporate tax reform ,a ,individual income tax reforms #bja4 ,individual income tax rate reductions 7a7 ,in general 7#a7 ,married individuals filing joint returns and surviving spouses ,subsection 7a7 of section #a is amended by striking the table and inserting the following3 ,if taxable income is3,the tax is3,not over #ajj1jjjae percent of taxable income4,over #ajj1jjj but not over #ejj1jjjae1jjj1 plus #be percent of the excess over #ajj1jjj4,over #ejj1jjjaae1jjj1 plus #bh percent of the excess over #ejj1jjj4 4 7#b7 ,heads of households ,subsection 7b7 of section #a is amended by striking the table and inserting the following3 ,if taxable income is3,the tax is3,not over #ej1jjjae percent of taxable income4,over #ej1jjj but not over #bej1jjjg1ejj1 plus #be percent of the excess over #ej1jjj4,over #bej1jjjeg1ejj1 plus #bh percent of the excess over #bej1jjj4 4 7#c7 ,unmarried individuals 7other than surviving spouses and heads of households7 ,subsection 7c7 of section #a is amended by striking the table and inserting the following3 ,if taxable income is3,the tax is3,not over #ej1jjjae percent of taxable income4,over #ej1jjj but not over #bej1jjjg1ejj1 plus #be percent of the excess over #bej1jjj4,over #bej1jjjeg1ejj1 plus #bh percent of the excess over #bej1jjj4 4 7#d7 ,married individuals filing separate returns ,subsection 7d7 of section #a is amended by striking the table and inserting the following3 ,if taxable income is3,the tax is3,not over #ej1jjjae percent of taxable income4,over #ej1jjj but not over #bej1jjjg1ejj1 plus #be percent of the excess over #bej1jjj4,over #bej1jjjeg1ejj1 plus #bh percent of the excess over #bej1jjj4 4 7b7 ,conforming amendments relating to cost-of-,living adjustment 7#a7 ,in general ,paragraph 7#c7 of section #a7;f7 is amended by inserting 1 except as provided in paragraph 7#g71 after for any calendar year4 7#b7 ,updated cost-of-living adjustment for new rates ,section #a7;f7 is amended by striking paragraphs 7#g7 and 7#h7 and inserting the following3 7#g7 ,cost-of-living adjustment for years after #bjae 7,a7 ,calendar year #bjaf ,in prescribing the tables under paragraph 7#a7 which apply in lieu of the tables contained in subsections 7a71 7b71 7c71 and 7d7 with respect to taxable years beginning in calendar year #bjaf1 the ,secretary shall make no adjustment to the dollar amounts in any such table4 7,b7 ,later calendar years ,in prescribing tables under paragraph 7#a7 which apply in lieu of the tables contained in subsections 7a71 7b71 7c71 and 7d7 with respect to taxable years beginning after ,december #ca1 #bjaf1 the cost-of-living adjustment used in making adjustments to the dollar amounts in such tables shall be determined under paragraph 7#c7 by substituting #bjae for #aiib4 4 7#c7 ,conforming amendments 7,a7 ,paragraph 7#b7 of section #a7;f7 is amended-- 7i7 by striking paragraph 7#h7 in subparagraph 7,a7 and inserting paragraph 7#g77;,a71 and 7ii7 by striking by adjusting in subparagraph 7,c7 and inserting except as provided in paragraph 7#g77;,a71 by adjusting4 7,b7 ,the heading of subsection 7f7 of section #a is amended by striking ,phaseout of marriage penalty in #ae-percent bracket2 adjustments and inserting ,adjustments4 7c7 ,conforming amendment relating to rates ,section #a is amended by striking subsection 7i74 7d7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjae4 #bjb4 ,family allowance amounts 7a7 ,in general ,section #fc is amended to read as follows3 #fc4 ,taxable income defined 7a7 ,in general ,for purposes of this subtitle1 the term taxable income means adjusted gross income minus-- 7#a7 the deductions allowed by this chapter 7other than those taken into account in determining adjusted gross income71 and 7#b7 the family allowance amount4 7b7 ,family allowance ,for purposes of this subtitle-- 7#a7 ,in general ,the family allowance amount with respect to a taxpayer shall be determined in accordance with the following table3 ,if the taxpayer is3,the family allowance amount is3 ,single or married filing separately#ej1jjj ,married filing jointly or a surviving spouse#ajj1jjj ,a head of a household#ge1jjj4 7#b7 ,definitions ,for purposes of this subsection-- 7,a7 the term single or married filing separately means a taxpayer to whom subsection 7c7 or 7d7 of section #a applies1 7,b7 the term married filing jointly or a surviving spouse means a taxpayer to whom subsection 7a7 of section #a applies1 and 7,c7 the term head of a household means a taxpayer to whom subsection 7b7 of section #a applies4 7#c7 ,adjustment for inflation ,in the case of any taxable year beginning after #bjaf1 each of the dollar amounts in the table under paragraph 7#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 #bjae for calendar year #aiib in subparagraph 7,b7 thereof4 7c7 ,cross references 7#a7 ,for deductions of estates and trusts in lieu of the family allowance amount1 see section #fdb7;b74 7#b7 ,for calculation of family allowance relating to nonresident aliens1 see section #hgc7;b77#c74 7#c7 ,for determination of marital status1 see section #ggjc4 4 7b7 ,termination of personal exemptions 7#a7 ,in general ,subsection 7a7 of section #aea is amended by inserting 1 for a taxable year beginning before ,january #a1 #bjaf after ,in the case of an individual4 7#b7 ,identifying information required to treat individual as dependent ,section #aeb is amended by adding at the end the following new subsection3 7g7 ,identifying information required ,no individual shall be treated as a dependent of the taxpayer under this section for a taxable year unless the taxpayer includes the ,,tin of such individual on the return of tax for the taxable year4 4 7#c7 ,conforming amendments 7,a7 ,section #b7;a77#a77;,b77ii7 is amended by striking of a dependent and all that follows and inserting of a dependent 7as defined in section #aeb7 who 7within the meaning of section #aeb1 determined without regard to subsections 7b77#a71 7b77#b71 and 7d77#a77;,b7 thereof7 is a son1 stepson1 daughter1 or stepdaughter of the taxpayer44 7,b7 ,section #b7;b77#a77;,a77ii7 is amended by striking if the taxpayer is entitled to a deduction for the taxable year for such person under section #aea and inserting within the meaning of section #aeb4 7,c7 ,section #b7;b77#a77;,b7 is amended by striking if the taxpayer is entitled to a deduction for the taxable year for such father or mother under section #aea and inserting if such father or mother is a dependent of the taxpayer for the taxable year1 within the meaning of section #aeb4 7,d7 ,section #cf;,b7b77#c77;,b7 is amended-- 7i7 by striking who is not allowed a deduction under section #aea for the taxable year with respect to a dependent in clause 7ii77,i77aa7 and inserting with respect to whom no dependents are taken into account under section #aeb for purposes of any provision of this title for the taxable year1 and 7ii7 by striking unless a deduction is allowed under section #aea for the taxable year with respect to a dependent other than either spouse and inserting unless a dependent other than either spouse is taken into account under section #aeb for purposes of any provision of this title for the taxable year4 7,e7 ,section #cf;,b7c77#a77;,d7 is amended by striking with respect to whom a deduction under section #aea is allowable to another taxpayer and inserting who is taken into account as a dependent by another taxpayer under section #aeb for purposes of any provision of this title4 7,f7 ,section #cf;,b7d77#a7 is amended by striking for whom the taxpayer is allowed a deduction under section #aea 7relating to allowance of deduction for personal exemptions7 and inserting who is a dependent of the taxpayer under section #aeb4 7,g7 ,section #cf;,b7e77#a7 is amended by striking for whom a taxpayer is allowed a deduction under section #aea 7relating to allowance of deduction for personal exemptions7 and inserting who is a dependent of the taxpayer under section #aeb4 7,h7 ,section #aeb7;d77#a77;,b7 is amended by striking the exemption amount 7as defined in section #aea7;d77 and inserting the family allowance amount applicable to taxpayers who are single or married filing separately under section #fc7;b74 7,i7 ,section #aeb7;f77#f77;,b77i7 is amended by striking the deduction under section #aea7;c7 and inserting the family allowance amount under section #fc7;b74 7,j7 ,part ,v of subchapter ,b of chapter #a is amended by striking section #aec4 7,k7 ,the table of sections for part ,v of subchapter ,b of chapter #a is amended by striking the item relating to section #aec4 7,l7 ,section #agb7;d77#c7 is amended to read as follows3 7#c7 ,family allowance amount ,taxable income under section #fc shall be determined without regard to paragraph 7#b7 of section #fc7;a71 relating to the family allowance amount4 ,no deduction in lieu of the exclusion of such family allowance amount shall be allowed4 4 7,m7 ,section #bbj7;b77#f7 is amended by striking with respect to whom a deduction under section #aea is allowable to another taxpayer and inserting who is taken into account as a dependent by another taxpayer under section #aeb for purposes of any provision of this title4 7,n7 ,section #bbc7;b77#f7 is amended by striking with respect to whom a deduction under section #aea is allowable to another taxpayer and inserting who is taken into account as a dependent by another taxpayer under section #aeb for purposes of any provision of this title4 7,o7 ,section #ddc7;c7 is amended by striking the exemptions allowed as a deduction under section #aea 7and any deduction in lieu thereof7 shall be reduced to amounts which bear the same ratio to the full exemptions and inserting the family allowance amount under section #fc 7and any deduction in lieu thereof7 shall be reduced to an amount which bears the same ratio to the full family allowance amount4 7,p7 ,section #fdb7;b77#b77;,c77i7 is amended-- 7i7 by striking #aea7;d7 and inserting #aea7;d7 7as in effect for taxable years beginning before ,january #a1 #bjaf71 and 7ii7 by striking #aea7;d77#c77;,c77iii7 in subclause 7,i7 and inserting #aea7;d77#c77;,c77iii7 7as so in effect74 7,q7 ,section #fdb7;b77#c7 is amended by striking the deductions allowed under section #aea 7relating to deduction for personal exemption7 and inserting the family allowance amount under section #fc4 7,r7 ,section #gjc7;a7 is amended-- 7i7 by striking and at the end of paragraph 7#a71 7ii7 by striking subparagraph 7,a7 of paragraph 7#b7 and by redesignating subparagraphs 7,b71 7,c71 7,d71 7,e71 and 7,f7 of such paragraph as subparagraphs 7,a71 7,b71 7,c71 7,d71 and 7,e71 7iii7 by striking the period at the end of paragraph 7#b77;,f7 and inserting 1 and1 and 7iv7 by adding at the end the following new paragraph3 7#c7 taxable income under section #fc shall be determined without regard to paragraph 7#b7 of section #fc7;a71 relating to the family allowance amount4 4 7,s7 ,section #ggc7;b7 is amended-- 7i7 by striking subparagraph 7,a7 of paragraph 7#a7 and by redesignating subparagraphs 7,b7 and 7,c7 of such paragraph as subparagraphs 7,a7 and 7,b71 and 7ii7 by adding at the end the following new paragraph3 7#d7 ,family allowance amount ,taxable income under section #fc shall be determined without regard to paragraph 7#b7 of section #fc7;a71 relating to the family allowance amount4 4 7,t7 ,section #hgc7;b7 is amended-- 7i7 by striking deductions in the matter preceding paragraph 7#a71 and 7ii7 by striking paragraph 7#c7 and inserting the following3 7#c7 ,family allowance amount ,the exclusion of the family allowance amount under section #fc7;a77#b71 except that the taxpayer shall be treated for purposes of section #fc7;b7 as single or married filing separately unless the taxpayer is a resident of a contiguous country or is a national of the ,united ,states4 4 7,u7 ,the heading of section #hgc is amended by striking ,deductions and inserting ,deductions and allowances4 7,v7 ,the item relating to section #hgc in the table of sections for subpart ,a of part ,,ii of subchapter ,n of chapter #a is amended to read as follows3 ,sec4 #hgc4 ,deductions and allowances4 4 7,w7 ,section #hgd7;b7 is amended by striking deduction for exemptions under section #aea and inserting exclusion of the family allowance amount under section #fc7;a77#b74 7,x7 ,section #hia is amended by striking deductions allowable under section #aea and under and inserting exclusion of the family allowance amount under section #fc7;a77#b7 and the deductions allowable under4 7,y7 ,section #ijd7;b77#a7 is amended to read as follows3 7#a7 ,family allowance and deductions ,for purposes of subsection 7a71 the taxable income in the case of an individual1 estate1 or trust shall be computed without regard to the exclusion of the family allowance amount under section #fc7;a77#b7 or any deduction in lieu of such exclusion4 4 7,z7 ,section #ica7;b77#a7 is amended by striking deductions 7other than the deduction under section #aea1 relating to personal exemptions7 and inserting deductions4 7,,aa7 ,section #icc is amended-- 7i7 by striking deductions 7other than the deduction under section #aea1 relating to personal exemptions7 in paragraph 7#a7 and inserting deductions1 and 7ii7 by striking deductions 7other than the deduction for personal exemptions under section #aea7 in paragraph 7#b7 and inserting deductions4 7,,bb7 ,section #abab7;b77#b77;,b77ii7 is amended to read as follows3 7ii7 the family allowance amount for the taxable year under section #fc7;b7 or any deduction allowed in lieu thereof4 4 7,,cc7 ,section #adjb7;a77#g7 is amended to read as follows3 7#g7 taxable income under section #fc shall be determined without regard to paragraph 7#b7 of section #fc7;a71 relating to the family allowance amount2 4 7,,dd7 ,section #ejjj;,a7c77#d77;,a7 is amended by striking for whom the taxpayer is allowed a deduction under section #aea 7relating to allowance of deduction for personal exemptions7 and inserting who are taken into account as a dependent by the taxpayer under section #aeb for purposes of any provision of this title4 7,,ee7 ,section #fjab7;a77#a7 is amended to read as follows3 7#a7 7,a7 ,every individual-- 7i7 having for the taxable year gross income which equals or exceeds the family allowance amount applicable to the individual under section #fc1 or 7ii7 in the case of individuals entitled to make a joint return 7but only if the individual and the individual's spouse had the same household as their home at the close of the taxable year71 every individual whose gross income1 when combined with the gross income of the individual's spouse1 equals or exceeds the family allowance amount applicable to taxpayers who are married filing jointly under section #fc4 7,b7 ,every individual not described in subparagraph 7,a7 who is taken into account as a dependent by another taxpayer under section #aeb for purposes of any provision of this title1 but only if such individual's gross income1 when combined with the gross income of all individuals taken into account in determining the family allowance amount under section #fc7;b7 of the taxpayer1 equals or exceeds the family allowance amount applicable to the taxpayer under such section4 4 7,,ff7 ,section #fjab7;a77#h7 is amended by striking is not less than the sum of the exemption amount plus the basic standard deduction under section #fc7;c77#b77;,d7 and inserting equals or exceeds the family allowance amount applicable to the estate under section #acih7;c77#c74 7,,gg7 ,section #fjac7;b77#c77;,a7 is amended by striking has the meaning given to such term and all that follows and inserting means the family allowance amount applicable to a taxpayer who is single or married filing separately under section #fc7;b744 7,,hh7 ,section #fjad7;a7 is amended by striking who does not itemize his deductions and who is not described in section #fjab7;a77#a77;,c77i7 and inserting who is not described in section #fjab7;a77#a77;,b74 7,,ii7 ,section #fajc7l77#ba77;,a77iii7 is amended by striking for whom a deduction is allowed under section #aea and inserting who is taken into account as a dependent under section #aeb for purposes of any provision of this title4 7,,jj7 ,section #fccd7;d77#b77;,a7 is amended to read as follows3 7,a7 the family allowance amount determined under section #fc7;b7 with respect to the taxpayer for the taxable year in which such levy occurs1 divided by 4 7,,kk7 ,section #ggjc7;b77#a7 is amended by striking with respect to whom such individual is entitled to a deduction for the taxable year under section #aea 7or would be so entitled but for section #aeb7;e77 and inserting who is a dependent 7within the meaning of section #aeb7 of the individual for the taxable year4 7#d7 ,amendments relating to payroll withholding 7,a7 ,in general ,paragraph 7#a7 of section #cdjb7;f7 is amended by striking subparagraph 7,a7 and all that follows and inserting the following3 7,a7 an exemption equal to the family allowance exemption amount2 and 7,b7 any allowance to which the employee is entitled under subsection 7m71 but only if the employee's spouse does not have in effect a withholding exemption certificate claiming such allowance4 4 7,b7 ,family allowance exemption amount ,subsection 7f7 of section #cdjb is amended-- 7i7 by redesignating paragraphs 7#b71 7#c71 7#d71 7#e71 7#f71 and 7#g7 as paragraphs 7#c71 7#d71 7#e71 7#f71 7#g71 and 7#h71 respectively1 7ii7 by striking paragraph 7#b77;,c7 in paragraph 7#c77;,b77iii7 and inserting paragraph 7#c77;,c71 and 7iii7 by inserting after paragraph 7#a7 the following new paragraph3 7#b7 ,family allowance exemption amount ,for purposes of this section-- 7,a7 ,in general ,except as provided in subparagraphs 7,b7 and 7,c71 the term family allowance exemption amount means the family allowance amount with respect to the taxpayer under section #fc7;b7 for the taxable year in which the payroll period begins1 prorated to the payroll period4 7,b7 ,married employees ,if the employee is married filing jointly and the employee's spouse is an employee receiving wages1 the employee and the employee's spouse may divide the family allowance amount determined under section #fc7;b7 in the proportion of their choice for purposes of this paragraph1 but the sum of the family allowance exemption amounts claimed by the employee and the employee's spouse shall not exceed such family allowance amount4 7,c7 ,employees with more than #a employer ,in the case of an employee that has withholding exemption certificates in effect with respect to more than #a employer1 the employee may divide the family allowance amount 7or the employee's share of such amount after the application of subparagraph 7,b71 if applicable7 determined under section #fc7;b7 among employers in the proportion of the employee's choice for purposes of this paragraph1 but the sum of the family allowance exemption amounts claimed by the employee with respect to all employers shall not exceed such family allowance amount 7or the employee's share of such amount after the application of subparagraph 7,b71 if applicable74 4 7,c7 ,conforming amendments 7i7 ,paragraph 7#b7 of section #cdjb7;a7 is amended by striking the number of withholding exemptions claimed and all that follows and inserting the total amount of the withholding exemptions claimed44 7ii7 ,paragraph 7#c7 of section #cdjb7;f71 as redesignated by subparagraph 7,b77i7 of this paragraph1 is amended-- 7,i7 by striking the number of withholding exemptions and all that follows in subparagraph 7,a7 and inserting the total amount of the withholding exemptions which the employee claims1 which shall in no event exceed the amount to which the employee is entitled41 7,,ii7 by striking the number of withholding exemptions each place it appears in subparagraphs 7,b7 and 7,c7 and inserting the total amount of the withholding exemptions1 7,,iii7 by striking the number to which he is entitled each place it appears in subparagraph 7,b7 and inserting the amount to which the employee is entitled1 7,,iv7 by striking the number to which the employee is entitled in subparagraph 7,c7 and inserting the amount to which the employee is entitled1 and 7,v7 by striking the number to which he will be1 or reasonably may be expected to be1 so entitled in subparagraph 7,c7 and inserting the amount to which the employee will be1 or reasonably may be expected to be1 so entitled4 7iii7 ,paragraph 7#g7 of section #cdjb7;f71 as redesignated by subparagraph 7,b77i7 of this paragraph1 is amended by striking shall be entitled to only one withholding exemption and inserting shall be treated as single or married filing separately for purposes of determining the family allowance exemption amount4 7iv7 ,paragraph 7#h7 of section #cdjb7;f71 as redesignated by subparagraph 7,b77i7 of this paragraph1 is amended by inserting 1 except as provided in paragraph 7#b77;,c7 after with respect to one employer4 7v7 ,paragraph 7#c7 of section #cdjb7m7 is amended by striking deductions 7including the additional standard deduction under section #fc7;c77#c7 for the aged and blind7 and inserting deductions4 7vi7 ,paragraph 7#b7 of section #cdjb7r7 is amended striking the sum of and all that follows and inserting the family allowance amount determined under section #fc7;b7 for a taxpayer who is single or married filing separately44 7vii7 ,section #fjdj7d7 is amended by striking section #cdjb7;f77#b71 7#c71 7#d71 and 7#e7 and inserting paragraphs 7#c71 7#d71 7#e71 and 7#f7 of section #cdjb7;f74 7c7 ,conforming amendments 7#a7 ,section #a7;f77#f7 is amended-- 7,a7 by striking #fc7;c77#d7 each place it appears and inserting #fc7;b77#c71 and 7,b7 by inserting 1 subsection 7g77#d77;,b7 after paragraph 7#b77;,a7 in subparagraph 7,a74 7#b7 ,section #a7;g77#d7 is amended-- 7,a7 by striking clause 7ii7 of subparagraph 7,a7 and inserting the following3 7ii7 the sum of-- 7,i7 #ejj1 plus 7,,ii7 the greater of the amount described in subclause 7,i7 or the amount of the itemized deductions allowed by this chapter which are directly connected with the production of the portion of adjusted gross income referred to in clause 7i74 1 and 7,b7 by redesignating subparagraphs 7,b7 and 7,c7 as subparagraphs 7,c7 and 7,d71 respectively1 and inserting after subparagraph 7,a7 the following new subparagraph3 7,b7 ,adjustment for inflation ,in the case of any taxable year beginning in a calendar year after #aihh1 the #ejj amount in subparagraph 7,a77ii77,i7 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 #aihg for calendar year #aiib in subparagraph 7,b7 thereof4 4 7#c7 ,section #c7;a7 is amended to read as follows3 7a7 7#a7 ,in general ,in lieu of the tax imposed by section #a1 there is hereby imposed for each taxable year on the taxable income of every individual whose taxable income does not exceed the ceiling amount a tax determined under tables1 applicable to such taxable year1 which shall be prescribed by the ,secretary and which shall be in such form as the ,secretary determines appropriate4 ,in the table so prescribed1 the amounts of the tax shall be computed on the basis of the rates prescribed by section #a4 7#b7 ,ceiling amount defined ,for purposes of paragraph 7#a71 the term ceiling amount means1 with respect to any taxpayer1 the amount 7not less than #bj1jjj7 determined by the ,secretary for the tax rate category in which such taxpayer falls4 4 7#d7 ,section #hfa7;b7 is amended by striking the last sentence4 7#e7 ,section #hfb7;b7 is amended by striking the last sentence4 7#f7 ,section #acih7;c7 is amended-- 7,a7 by striking paragraph 7#c7 and inserting the following3 7#c7 ,family allowance amount ,the family allowance amount under section #fc7;b7 taken into account for the estate for the taxable year shall be the same as for a taxpayer who is single or married filing separately4 1 and 7,b7 by striking basic standard deduction in the heading and inserting family allowance amount4 7#g7 ,section #fbab7;c77#b7 is amended by striking subparagraph 7,a7 and by redesignating subparagraphs 7,b7 and 7,c7 as subparagraphs 7,a7 and 7,b71 respectively4 7#h7 ,section #fjad7;b77#d7 is amended by striking deductions and all that follows and inserting deductions44 7#i7 ,section #fejd is amended by striking paragraph 7#b7 and by redesignating paragraphs 7#c71 7#d71 7#e71 7#f71 7#g71 7#h71 7#i71 7#aj71 and 7#aa7 as paragraphs 7#b71 7#c71 7#d71 7#e71 7#f71 7#g71 7#h71 7#i71 and 7#aj71 respectively4 7d7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjae4 #bjc4 ,repeal of limitations relating to itemized deductions 7a7 ,in general ,sections #fg and #fh are repealed4 7b7 ,conforming amendments 7#a7 ,section #afb7o7 is amended by striking paragraph 7#b7 and redesignating paragraph 7#c7 as paragraph 7#b74 7#b7 ,section #afd7;b77#e77;,h77ii7 is amended-- 7,a7 by striking the comma at the end of subclause 7,i7 and inserting 1 and1 7,b7 by striking 1 and at the end of subclause 7,,ii7 and inserting a period1 and 7,c7 by striking subclause 7,,iii74 7#c7 ,section #cjb7;b77#e7 is amended by inserting 1 as in effect on ,december #ca1 #bjae after #fg7;c77#b77;,b74 7#d7 ,section #efb7;c7 is amended by inserting 1 as in effect on ,december #ca1 #bjae after #fg7;c77#b77;,b74 7#e7 ,section #fdb7;b77#b77;,c77i77,,ii7 is amended by inserting 1 and as in effect on ,december #ca1 #bjae after #fdb7;b74 7#f7 ,section #ggb7;c77#c7 is amended-- 7,a7 by striking subparagraph 7,b71 and 7,b7 by striking ,income or loss from other activities4-- and all that follows through ,for purposes of this chapter and inserting ,income or loss from other activities4--,for purposes of this chapter4 7#g7 ,section #ggc7;a77#c77;,b7 is amended by striking clause 7i7 and by redesignating clauses 7ii71 7iii71 and 7iv7 as clauses 7i71 7ii71 and 7iii71 respectively4 7#h7 ,section #ggc7;b7 is amended by striking paragraph 7#c74 7#i7 ,section #adaa7;a77#b77;,b77i7 is amended by inserting 1 as in effect on ,december #ca1 #bjae after #fg7;e74 7#aj7 ,subparagraphs 7,c77iii7 and 7,d77v7 of section #ffed7;d77#a7 are each amended by inserting 1 as in effect on ,december #ca1 #bjae before the period4 7c7 ,effective date ,the repeal and the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjae4 #bjd4 ,termination of separate treatment of capital gains ,subsection 7h7 of section #a is amended by adding at the end the following new paragraph3 7#ab7 ,termination ,this subsection shall not apply to any taxable year beginning after ,december #ca1 #bjae4 4 #bje4 ,repeals 7a7 ,in general ,the following provisions of the ,internal ,revenue ,code of #aihf are repealed3 7#a7 ,subpart ,a of part ,,iv of subchapter ,a of chapter #a 7relating to nonrefundable personal credits74 7#b7 ,subpart ,b of part ,,iv of subchapter ,a of chapter #a 7relating to other credits71 other than section #bg 7relating to taxes of foreign countries and possessions of the ,united ,states2 possession tax credit74 7#c7 ,subpart ,c of part ,,iv of subchapter ,a of chapter #a 7relating to refundable credits71 other than sections #cb 7relating to earned income7 and #cf;,b 7relating to refundable credit for coverage under a qualified health plan74 7#d7 ,part ,,vi of subchapter ,a of chapter #a 7relating to alternative minimum tax74 7#e7 ,section #bag 7relating to moving expenses74 7#f7 ,section #bba 7relating to interest on education loans74 7#g7 ,section #bbb 7relating to qualified tuition and related expenses74 7#h7 ,chapter #b;,a 7relating to unearned income medicare contribution74 7b7 ,effective date ,the repeals made by subsection 7a7 shall take effect for taxable years beginning after ,december #ca1 #bjae4 #bjf4 ,establishment of progressive tax rebate 7a7 ,in general ,section #cb is amended to read as follows3 #cb4 ,progressive tax rebate 7a7 ,allowance of credit ,in the case of an eligible taxpayer1 there shall be allowed as a credit against the tax imposed by this subtitle for the taxable year an amount equal to the sum of-- 7#a7 the earned income amount 7as determined under subsection 7b771 7#b7 the child benefit amount 7as determined under subsection 7c771 plus 7#c7 the additional child benefit amount 7as determined under subsection 7d774 7b7 ,earned income amount 7#a7 ,single workers ,in the case of an eligible taxpayer 7other than a head of a household as defined in section #b7;b77 who is not filing a joint return for the taxable year under section #fjac1 the earned income amount shall be equal to-- 7,a7 in the case of a taxpayer whose earned income for the taxable year does not exceed #f1ajj1 #be4a percent of such earned income1 7,b7 in the case of a taxpayer whose earned income for the taxable year exceeds #f1ajj but does not exceed #i1jjj1 #a1ecj plus #ag4a percent of such earned income in excess of #f1ajj1 7,c7 in the case of a taxpayer whose earned income 7or1 if greater1 adjusted gross income7 for the taxable year exceeds #i1jjj1 but does not exceed #di1did1 #b1jbe minus #e percent of such earned income or adjusted gross income in excess of #i1jjj1 or 7,d7 in the case of a taxpayer whose earned income 7or1 if greater1 adjusted gross income7 for the taxable year exceeds #di1did1 #j4 7#b7 ,head of household ,in the case of an eligible taxpayer who is a head of a household 7as defined in section #b7;b771 the earned income amount shall be equal to-- 7,a7 in the case of a taxpayer whose earned income for the taxable year does not exceed #i1aej1 #be4a percent of such earned income1 7,b7 in the case of a taxpayer whose earned income for the taxable year exceeds #i1aej but does not exceed #ac1ejj1 #b1bid plus #ag4a percent of such earned income in excess of #i1aej1 7,c7 in the case of a taxpayer whose earned income 7or1 if greater1 adjusted gross income7 for the taxable year exceeds #ac1ejj1 but does not exceed #gd1bda1 #c1jcg minus #e percent of such earned income or adjusted gross income in excess of #ac1ejj1 or 7,d7 in the case of a taxpayer whose earned income 7or1 if greater1 adjusted gross income7 for the taxable year exceeds #gd1bda1 #j4 7#c7 ,married filing jointly ,in the case of an eligible taxpayer filing a joint return under section #fjac1 the earned income amount shall be determined pursuant to paragraph 7#a71 except that the dollar amounts in effect under such paragraph shall be multiplied by #b4 7c7 ,child benefit amount 7#a7 ,in general ,in the case of an eligible taxpayer with a qualifying child1 the child benefit amount shall be equal to #ae percent of the earned income of such taxpayer for the taxable year4 7#b7 ,limitations 7,a7 ,limitation based on number of children ,the child benefit amount determined under paragraph 7#a7 shall not exceed an amount equal to the product of-- 7i7 the number of qualifying children of the taxpayer1 multiplied by 7ii7 #a1eij4 7,b7 ,reduction based on earnings or adjusted gross income ,the child benefit amount determined under this subsection 7as determined after application of subparagraph 7,a77 shall be reduced 7but not below zero7 by an amount equal to #e percent of the earned income 7or1 if greater1 the adjusted gross income7 of the taxpayer for the taxable year in excess of #ge1jjj 7#aaj1jjj in the case of a joint return74 7d7 ,additional child benefit amount 7#a7 ,in general ,in the case of an eligible taxpayer with a qualifying child1 the additional child benefit amount shall be equal to-- 7,a7 in the case of a taxpayer whose earned income for the taxable year does not exceed #bj1jjj1 the applicable percentage of such earned income1 7,b7 in the case of a taxpayer whose earned income exceeds #bj1jjj but does not exceed #be1jjj1 the applicable percentage of #bj1jjj1 7,c7 in the case of a taxpayer whose earned income 7or1 if greater1 adjusted gross income7 exceeds #be1jjj but does not exceed the applicable amount1 an amount equal to-- 7i7 the applicable percentage of #bj1jjj1 minus 7ii7 #ae percent of such earned income or adjusted gross income in excess of #be1jjj1 or 7,d7 in the case of a taxpayer whose earned income 7or1 if greater1 adjusted gross income7 exceeds the applicable amount1 #j4 7#b7 ,applicable percentage ,for purposes of paragraph 7#a71 the applicable percentage is-- 7,a7 in the case of a taxpayer with #a qualifying child1 #aa percent1 7,b7 in the case of a taxpayer with #b qualifying children1 #ag percent1 and 7,c7 in the case of a taxpayer with #c or more qualifying children1 #ai percent4 7#c7 ,applicable amount ,for purposes of paragraph 7#a71 the applicable amount is-- 7,a7 in the case of a taxpayer with #a qualifying child1 #ci1ffg1 7,b7 in the case of a taxpayer with #b qualifying children1 #dg1ffg1 and 7,c7 in the case of a taxpayer with #c or more qualifying children1 #ej1ccc4 7e7 ,eligible taxpayer 7#a7 ,in general ,the term eligible taxpayer means an individual-- 7,a7 whose principal place of abode is in the ,united ,states for more than one-half of such taxable year1 and 7,b7 is not a dependent 7as defined under section #aeb7 to another taxpayer for any taxable year beginning in the same calendar year as such taxable year4 7#b7 ,qualifying child ineligible ,if an individual is the qualifying child of a taxpayer for any taxable year of such taxpayer beginning in a calendar year1 such individual shall not be treated as an eligible taxpayer for any taxable year of such individual beginning in such calendar year4 7#c7 ,exception for taxpayer claiming benefits under section #iaa ,the term eligible taxpayer does not include any taxpayer who claims the benefits of section #iaa for the taxable year4 7#d7 ,limitation on eligibility of nonresident aliens ,the term eligible taxpayer shall not include any individual who is a nonresident alien individual for any portion of the taxable year unless such individual is treated for such taxable year as a resident of the ,united ,states for purposes of this chapter by reason of an election under subsection 7g7 or 7h7 of section #fjac4 7#e7 ,identification number requirement ,no credit shall be allowed under this section to an eligible taxpayer who does not include on the return of tax for the taxable year-- 7,a7 such individual's taxpayer identification number1 and 7,b7 if the individual is married 7within the meaning of section #ggjc71 the taxpayer identification number of such individual's spouse4 7#f7 ,taxpayers who do not include ,,tin1 etc41 of any qualifying child ,no credit shall be allowed under this section to any eligible taxpayer who has one or more qualifying children if no qualifying child of such taxpayer is taken into account under subsection 7c7 or 7d7 by reason of subsection 7f77#d74 7#g7 ,treatment of military personnel stationed outside of the ,united ,states ,for purposes of paragraph 7#a77;,a7 and subsection 7f77#c71 the principal place of abode of a member of the ,armed ,forces of the ,united ,states shall be treated as in the ,united ,states during any period during which such member is stationed outside the ,united ,states while serving on extended active duty with the ,armed ,forces of the ,united ,states4 ,for purposes of the preceding sentence1 the term extended active duty means any period of active duty pursuant to a call or order to such duty for a period in excess of #ij days or for an indefinite period4 7#h7 ,joint return 7,a7 ,married individuals ,in the case of an individual who is married 7within the meaning of section #ggjc71 this section shall apply only if a joint return is filed for the taxable year under section #fjac4 7,b7 ,other ,in the case of taxpayer filing a joint return under section #fjac1 such taxpayer shall not be treated as an eligible taxpayer for purposes of this section unless either the taxpayer or the taxpayer's spouse satisfies each of the requirements under this subsection4 7f7 ,qualifying child 7#a7 ,in general ,the term qualifying child means a qualifying child of the taxpayer 7as defined in section #aeb7;c71 determined without regard to paragraph 7#a77;,d7 thereof and section #aeb7;e774 7#b7 ,married individual ,the term qualifying child shall not include an individual who is married as of the close of the eligible taxpayer's taxable year unless the individual qualifies as a dependent 7as defined under section #aeb7 of the taxpayer for such taxable year4 7#c7 ,place of abode ,for purposes of paragraph 7#a71 the requirements of section #aeb7;c77#a77;,b7 shall be met only if the principal place of abode is in the ,united ,states4 7#d7 ,identification requirements 7,a7 ,in general ,a qualifying child shall not be taken into account under subsection 7c7 or 7d7 unless the taxpayer includes the name1 age1 and ,,tin of the qualifying child on the return of tax for the taxable year4 7,b7 ,other methods ,the ,secretary may prescribe other methods for providing the information described in subparagraph 7,a74 7g7 ,earned income 7#a7 ,in general ,the term earned income means-- 7,a7 wages1 salaries1 tips1 and other employee compensation1 but only if such amounts are includible in gross income for the taxable year1 plus 7,b7 the amount of the taxpayer's net earnings from self-employment for the taxable year 7within the meaning of section #adjb7;a771 but such net earnings shall be determined with regard to the deduction allowed to the taxpayer by section #afd7;f74 7#b7 ,special rules ,for purposes of paragraph 7#a7-- 7,a7 no amount received as a pension or annuity shall be taken into account1 7,b7 no amount to which section #hga7;a7 applies 7relating to income of nonresident alien individuals not connected with ,united ,states business7 shall be taken into account1 7,c7 no amount received for services provided by an individual while the individual is an inmate at a penal institution shall be taken into account1 7,d7 no amount described in paragraph 7#a7 received for service performed in work activities as defined in paragraph 7#d7 or 7#g7 of section #djg7;d7 of the ,social ,security ,act to which the taxpayer is assigned under any ,state program under part ,a of title ,,iv of such ,act shall be taken into account1 but only to the extent such amount is subsidized under such ,state program1 and 7,e7 a taxpayer may elect to treat amounts excluded from gross income by reason of section #aab as earned income4 7h7 ,taxable year must be full taxable year ,except in the case of a taxable year closed by reason of the death of the eligible taxpayer1 no credit shall be allowable under this section in the case of a taxable year covering a period of less than #ab months4 7i7 ,coordination with certain means-,tested programs ,for purposes of-- 7#a7 the ,united ,states ,housing ,act of #aicg1 7#b7 title ,v of the ,housing ,act of #aidi1 7#c7 section #aja of the ,housing and ,urban ,development ,act of #aife1 7#d7 sections #bba7;d77#c71 #bce1 and #bcf of the ,national ,housing ,act1 and 7#e7 the ,food and ,nutrition ,act of #bjjh1 any refund made to a taxpayer by reason of this section shall not be treated as income 7and shall not be taken into account in determining resources for the month of its receipt and the following month74 7j7 ,amount of credit ,to be determined under tables ,the amount of the credit allowed by this section shall be determined under tables prescribed by the ,secretary4 7k7 ,denial of credit for individuals having excessive investment income 7#a7 ,in general ,no credit shall be allowed under subsection 7a7 for the taxable year if the aggregate amount of disqualified income of the taxpayer for the taxable year exceeds #e1jjj4 7#b7 ,disqualified income ,for purposes of paragraph 7#a71 the term disqualified income means-- 7,a7 interest or dividends to the extent includible in income for the taxable year1 7,b7 interest received or accrued during the taxable year which is exempt from tax imposed by this chapter1 7,c7 the excess 7if any7 of-- 7i7 gross income from rents or royalties not derived in the ordinary course of a trade or business1 over 7ii7 the sum of-- 7,i7 the deductions 7other than interest7 which are clearly and directly allocable to such gross income1 plus 7,,ii7 interest deductions properly allocable to such gross income1 7,d7 the capital gain net income 7as defined in section #abbb7 of the taxpayer for such taxable year1 and 7,e7 the excess 7if any7 of-- 7i7 the aggregate income from all passive activities for the taxable year 7determined without regard to any amount included in earned income under subsection 7f7 or described in a preceding subparagraph71 over 7ii7 the aggregate losses from all passive activities for the taxable year 7as so determined74 7#c7 ,passive activity ,for purposes of paragraph 7#b77;,e71 the term passive activity has the meaning given such term by section #dfi4 7l7 ,inflation adjustments 7#a7 ,in general ,in the case of any taxable year beginning after #bjae1 each of the dollar amounts in subsections 7b71 7c71 7d71 and 7j77#a7 shall each 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 determined by substituting calendar year #bjad for calendar year #aiib in subparagraph 7,b7 thereof4 7#b7 ,rounding ,if any dollar amount in subsections 7b71 7c71 7d71 and 7j77#a71 after being increased under paragraph 7#a71 is not a multiple of #ajj1 such dollar amount shall be rounded to the nearest multiple of #ajj4 7m7 ,restrictions on taxpayers who improperly claimed credit in prior year 7#a7 ,taxpayers making prior fraudulent or reckless claims 7,a7 ,in general ,no credit shall be allowed under this section for any taxable year in the disallowance period4 7,b7 ,disallowance period ,for purposes of subparagraph 7,a71 the disallowance period is-- 7i7 the period of #aj taxable years after the most recent taxable year for which there was a final determination that the taxpayer's claim of credit under this section was due to fraud1 and 7ii7 the period of #b taxable years after the most recent taxable year for which there was a final determination that the taxpayer's claim of credit under this section was due to reckless or intentional disregard of rules and regulations 7but not due to fraud74 7#b7 ,taxpayers making improper prior claims ,in the case of a taxpayer who is denied credit under this section for any taxable year as a result of the deficiency procedures under subchapter ,b of chapter #fc1 no credit shall be allowed under this section for any subsequent taxable year unless the taxpayer provides such information as the ,secretary may require to demonstrate eligibility for such credit4 4 7b7 ,conforming amendments 7#a7 ,section #hf7;f77#b7 is amended by striking section #cb7;c77#b7 and inserting section #cb7;g74 7#b7 ,section #abi7;e77#b7 is amended by striking section #cb7;c77#b7 and inserting section #cb7;g74 7#c7 ,section #fbac7;g77#b7 is amended-- 7,a7 in subparagraph 7,g71 by striking section #cb7;c77#b77;,a7 and inserting section #cb7;g77#a71 and 7,b7 in subparagraph 7,k71 by striking section #cb7k77#b7 and inserting section #cb7m77#b74 7#d7 ,paragraph 7#b7 of section #acbd7;b7 of title #ca1 ,united ,states ,code1 is amended by inserting #cb1 after #be;,a14 7#e7 ,the table of sections for subpart ,c of part ,,iv of subchapter ,a of chapter #a of subtitle ,a is amended by striking the item relating to section #cb and inserting the following3 ,sec4 #cb4 ,progressive tax rebate44 7c7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjae4 #bjg4 ,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 title4 ,b ,corporate tax reforms #baa4 ,corporate income tax rate reduction 7a7 ,in general ,subsection 7b7 of section #aa is amended to read as follows3 7b7 ,amount of tax ,the amount of the tax imposed by subsection 7a7 shall be an amount equal to #ag percent of the taxable income4 4 7b7 ,conforming amendment ,section #aeea is amended-- 7#a7 by striking benefits of the graduated corporate rates and in the heading1 7#b7 by striking the benefits of the rates contained in section #aa7;b7 which are lower than the highest rate specified in such section1 or in subsection 7a71 and 7#c7 by striking such benefits or credit in subsection 7a7 and inserting such credit4 7c7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjae4 ,,iii ,refund of excess consumption tax revenue #cja4 ,refunds of excess consumption tax revenue 7a7 ,in general ,subchapter ,b of chapter #fe is amended by adding at the end the following new section3 #fdcc4 ,refunds of excess consumption tax revenue 7a7 ,in general ,in the case of any qualifying excess consumption tax revenue year1 the ,secretary shall pay to each eligible filer an amount equal to the consumption tax refund amount4 7b7 ,qualifying excess consumption tax revenue year ,for purposes of this section-- 7#a7 ,in general ,the term qualifying excess consumption tax revenue year means any calendar year for which the net consumption tax revenues exceed #aj percent of gross domestic product for such year4 7#b7 ,net consumption tax revenues ,the net consumption tax revenues for any calendar year shall be the excess of-- 7,a7 the tax imposed under section #cija with respect to taxable supplies the tax point for which is during such calendar year1 over 7,b7 the credits allowed under section #ciaf for such calendar year4 7#c7 ,gross domestic product ,the gross domestic product for any calendar year shall be the last estimate of the gross domestic product for such calendar year by the ,department of ,commerce which is published before the date that is #c months after the close of such calendar year4 7c7 ,eligible filer ,for purposes of this section-- 7#a7 ,definition 7,a7 ,in general ,the term eligible filer means1 with respect to any qualifying excess consumption tax revenue year1 any individual 7other than an individual described in paragraph 7#b77 who filed a return of income tax for the individual's qualifying rebate taxable year4 7,b7 ,exclusion ,the term eligible filer shall not include-- 7i7 any nonresident alien individual1 7ii7 any individual who is a dependent 7as defined in section #aeb7 of another taxpayer for the individual's qualifying rebate taxable year1 or 7iii7 an estate or trust4 7#b7 ,qualifying rebate taxable year ,the term qualifying rebate taxable year means1 with respect to any individual in connection with a qualifying excess consumption tax revenue year1 the taxable year of such individual which contains #f or more months of such qualifying excess consumption tax revenue year4 7#c7 ,identification requirement 7,a7 ,in general ,an individual shall not be treated as an eligible filer for any year unless such individual includes on the return of tax for such year-- 7i7 such individual's valid identification number1 7ii7 in the case of a joint return1 the valid identification number of such individual's spouse1 and 7iii7 the valid identification number of any qualifying child 7as defined in section #cb7;f77 claimed on such return4 7,b7 ,valid identification number ,for purposes of subparagraph 7,a71 the term valid identification number means a social security number issued to an individual by the ,social ,security ,administration4 ,such term shall not include a ,,tin issued by the ,internal ,revenue ,service4 7,c7 ,special rule for members of the ,armed ,forces ,subparagraph 7,a7 shall not apply to a joint return where at least #a spouse was a member of the ,armed ,forces of the ,united ,states at any time during the taxable year4 7d7 ,consumption tax refund amount 7#a7 ,in general ,the consumption tax refund amount for any eligible filer for any qualifying excess consumption tax year shall be the product of-- 7,a7 the applicable amount1 times 7,b7 the applicable shares of the eligible filer4 7#b7 ,applicable amount ,the applicable amount for any qualifying excess revenue consumption tax year is an amount equal to-- 7,a7 the excess described in subsection 7b77#a71 divided by 7,b7 the total number of applicable shares of all eligible filers for such year4 7#c7 ,applicable share ,the number of applicable shares for any eligible filer shall be the sum of-- 7,a7 #a 7#b in the case of a joint return71 plus 7,b7 of the number of qualifying children 7as defined in section #cb7;f77 claimed on the eligible filer's return for the filer's qualifying rebate taxable year4 7e7 ,time for payment ,payments under subsection 7a7 shall be made as soon as practical after the ,secretary has determined the consumption tax refund amount4 4 7b7 ,conforming amendments 7#a7 ,section #acbd7;b77#b7 of title #ca1 ,united ,states ,code1 is amended by striking or #fdca and inserting #fdca1 or #fdcc4 7#b7 ,the table of sections for subchapter ,b of chapter #fe is amended by adding at the end the following new item3 ,sec4 #fdcc4 ,refunds of excess consumption tax revenue4 4 7c7 ,effective date ,the amendments made by this section shall apply to calendar years beginning after the date of the enactment of this ,act4