H.R. 2078 — Introduced in House

I 115th CONGRESS 1st Session H. R. 2078 IN THE HOUSE OF REPRESENTATIVES April 6, 2017Mr. Williams introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to simplify individual income and corporate tax rates, to set a maximum on the capital gains rate, to make permanent the deduction for dividends received for repatriated foreign earnings, to reduce the rate of payroll and self-employment taxes, to make 100-percent bonus depreciation permanent, and to repeal the Federal estate and gift taxes. 1. Short title; table of contents (a) Short title This Act may be cited as the Jump Start America Act of 2017. (b) Table of contents The table of contents for this Act is as follows: Sec. 1. Short title; table of contents. Title I—Simplified individual income tax rates Sec. 101. Simplified individual income tax rates. Title II—20-Percent Corporate Tax Rate Sec. 201. 20-percent corporate tax rate. Title III—15-Percent Maximum Capital Gains Rate Sec. 301. 15-percent maximum capital gains rate. Title IV—Modification and Permanent Extension of the Incentives to Reinvest Foreign Earnings in the United States Sec. 401. Modification and permanent extension of the incentives to reinvest foreign earnings in the United States. Title V—Bonus depreciation increased to 100 percent and made permanent Sec. 501. Bonus depreciation increased to 100 percent and made permanent. Title VI—FICA and SECA Tax Rate Reductions Sec. 601. FICA tax rate reductions. Sec. 602. SECA tax rate reductions. Title VII—Repeal of estate and gift taxes Sec. 701. Repeal of estate and gift taxes. I Simplified individual income tax rates 101. Simplified individual income tax rates (a) In general Section 1(i) of the Internal Revenue Code of 1986 is amended by striking paragraphs (2) and (3), by redesignating paragraph (4) as paragraph (3), and by inserting after paragraph (1) the following new paragraph: (2) 20- and 30-percent rate brackets (A) In general In the case of taxable years beginning after December 31, 2015, the rate of tax under subsections (a), (b), (c), and (d) on taxable income which would (without regard to this paragraph) be taxed at a rate over 15 percent shall be— (i) 20 percent on taxable income not over $1,000,000, and (ii) 30 percent on taxable income over $1,000,000. (B) Inflation adjustment In prescribing the tables under subsection (f) which apply with respect to taxable years beginning after 2016, the $1,000,000 amount in subparagraph (A) shall be increased by an amount equal to— (i) such dollar amount, multiplied by (ii) the cost-of-living adjustment determined under subsection (f)(3) for the calendar year in which the taxable year begins determined by substituting calendar year 2015 for calendar year 1992 in subparagraph (B) thereof. If any adjustment under the preceding sentence is not a multiple of $100, such amount shall be rounded to the next lowest multiple of $100. . (b) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2017. II 20-Percent Corporate Tax Rate 201. 20-percent corporate tax rate (a) In general Subsection (b) of section 11 of the Internal Revenue Code of 1986 is amended to read as follows: (b) Amount of tax The amount of the tax imposed by subsection (a) shall be 20 percent of taxable income. . (b) Conforming amendments (1) Paragraphs (2)(B) and (6)(A)(ii) of section 860E(e) of such Code are each amended by striking section 11(b)(1) and inserting section 11(b). (2) (A) Section 1445(e)(1) of such Code is amended— (i) by striking 35 percent and inserting the rate of tax in effect for the taxable year under section 11(b), and (ii) by striking of the gain and inserting multiplied by the gain. (B) Section 1445(e)(2) of such Code is amended by striking 35 percent of the amount and inserting the rate of tax in effect for the taxable year under section 11(b) multiplied by the amount. (C) Section 1445(e)(6) of such Code is amended— (i) by striking 35 percent and inserting the rate of tax in effect for the taxable year under section 11(b), and (ii) by striking of the amount and inserting multiplied by the amount. (D) Section 1446(b)(2)(B) of such Code is amended by striking section 11(b)(1) and inserting section 11(b). (3) Section 852(b)(1) of such Code is amended by striking the last sentence. (4) Section 7874(e)(1)(B) of such Code is amended by striking section 11(b)(1) and inserting section 11(b). (c) Effective date (1) In general Except as otherwise provided in this subsection, the amendments made by this section shall apply to taxable years beginning after December 31, 2017. (2) Withholding The amendments made by subsection (b)(2) shall apply to distributions made after December 31, 2017. III 15-Percent Maximum Capital Gains Rate 301. 15-percent maximum capital gains rate (a) In general Section 1(h)(1) of the Internal Revenue Code of 1986 is amended by striking subparagraphs (C) and (D), by redesignating subparagraphs (E) and (F) as subparagraphs (D) and (E), respectively, and by inserting after subparagraph (B) the following new subparagraph: (C) 15 percent of the adjusted net capital gain (or, if less, taxable income) in excess of the amount on which a tax is determined under subparagraph (B). . (b) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2017. IV Modification and Permanent Extension of the Incentives to Reinvest Foreign Earnings in the United States 401. Modification and permanent extension of the incentives to reinvest foreign earnings in the United States (a) Repatriation subject to 5-Percent tax rate Section 965(a)(1) of the Internal Revenue Code of 1986 is amended by striking 85 percent and inserting 85.7 percent. (b) Permanent extension To elect repatriation Section 965(f) of such Code is amended to read as follows: (f) Election The taxpayer may elect to apply this section to any taxable year only if made on or before the due date (including extensions) for filing the return of tax for such taxable year. . (c) Repatriation includes current and accumulated foreign earnings (1) In general Section 965(b)(1) of such Code is amended to read as follows: (1) In general The amount of dividends taken into account under subsection (a) shall not exceed the sum of the current and accumulated earnings and profits described in section 959(c)(3) for the year a deduction is claimed under subsection (a), without diminution by reason of any distributions made during the election year, for all controlled foreign corporations of the United States shareholder. . (2) Conforming amendments (A) Section 965(b) of such Code is amended by striking paragraph (2) and by redesignating paragraphs (3) and (4) as paragraphs (2) and (3), respectively. (B) Section 965(c) of such Code is amended by striking paragraphs (1) and (2) and by redesignating paragraphs (3), (4), and (5) as paragraphs (1), (2), and (3), respectively. (C) Section 965(c)(3) of such Code, as redesignated by subparagraph (B), is amended to read as follows: (3) Controlled groups All United States shareholders which are members of an affiliated group filing a consolidated return under section 1501 shall be treated as one United States shareholder. . (d) Clerical amendments (1) The heading for section 965 of such Code is amended by striking temporary. (2) The table of sections for subpart F of part III of subchapter N of chapter 1 of such Code is amended by striking Temporary dividends and inserting Dividends. (e) Effective date The amendments made by this section shall apply to taxable years ending after the date of the enactment of this Act. V Bonus depreciation increased to 100 percent and made permanent 501. Bonus depreciation increased to 100 percent and made permanent (a) Increase Section 168(k)(1)(A) of the Internal Revenue Code of 1986 is amended by striking 50 percent and inserting 100 percent. (b) Made permanent Section 168(k)(2) of the Internal Revenue Code of 1986 is amended to read as follows: (2) Qualified property For purposes of this subsection— (A) In general The term qualified property means property— (i) (I) to which this section applies which has a recovery period of 20 years or less, (II) which is computer software (as defined in section 167(f)(1)(B)) for which a deduction is allowable under section 167(a) without regard to this subsection, (III) which is water utility property, or (IV) which is qualified leasehold improvement property, and (ii) the original use of which commences with the taxpayer. (B) Exception for alternative depreciation property The term qualified property shall not include any property to which the alternative depreciation system under subsection (g) applies, determined— (i) without regard to paragraph (7) of subsection (g) (relating to election to have system apply), and (ii) after application of section 280F(b) (relating to listed property with limited business use). (C) Special rules (i) Sale-leasebacks For purposes of clause (ii) and subparagraph (A)(ii), if property is— (I) originally placed in service by a person, and (II) sold and leased back by such person within 3 months after the date such property was originally placed in service, such property shall be treated as originally placed in service not earlier than the date on which such property is used under the leaseback referred to in subclause (II). (ii) Syndication For purposes of subparagraph (A)(ii), if— (I) property is originally placed in service by the lessor of such property, (II) such property is sold by such lessor or any subsequent purchaser within 3 months after the date such property was originally placed in service (or, in the case of multiple units of property subject to the same lease, within 3 months after the date the final unit is placed in service, so long as the period between the time the first unit is placed in service and the time the last unit is placed in service does not exceed 12 months), and (III) the user of such property after the last sale during such 3-month period remains the same as when such property was originally placed in service, such property shall be treated as originally placed in service not earlier than the date of such last sale. (D) Coordination with section 280f For purposes of section 280F— (i) Automobiles In the case of a passenger automobile (as defined in section 280F(d)(5)) which is qualified property, the Secretary shall increase the limitation under section 280F(a)(1)(A)(i) by $8,000. (ii) Listed property The deduction allowable under paragraph (1) shall be taken into account in computing any recapture amount under section 280F(b)(2). (iii) Inflation adjustment In the case of any taxable year beginning in a calendar year after 2018, the $8,000 amount in clause (i) shall be increased by an amount equal to— (I) such dollar amount, multiplied by (II) the automobile price inflation adjustment determined under section 280F(d)(7)(B)(i) for the calendar year in which such taxable year begins by substituting 2017 for 1987 in subclause (II) thereof. If any increase under the preceding sentence is not a multiple of $100, such increase shall be rounded to the nearest multiple of $100. (E) Deduction allowed in computing minimum tax For purposes of determining alternative minimum taxable income under section 55, the deduction under section 167 for qualified property shall be determined without regard to any adjustment under section 56. . (c) Effective date The amendments made by this section shall apply to property placed in service after December 31, 2017. VI FICA and SECA Tax Rate Reductions 601. FICA tax rate reductions (a) Old-Age, survivors, and disability insurance Sections 3101(a) and 3111(a) of the Internal Revenue Code of 1986 are each amended by striking 6.2 percent and inserting 3.1 percent. (b) Hospital insurance (1) Employees Section 3101(b) of such Code is amended— (A) by striking 1.45 percent in paragraph (1) and inserting 0.725 percent, and (B) by striking 0.9 percent in paragraph (2) and inserting 0.45 percent. (2) Employers Section 3111(b) of such Code is amended by striking 1.45 percent and inserting 0.725 percent. (c) Effective date The amendments made by this section shall apply remuneration paid after December 31, 2017. 602. SECA tax rate reductions (a) Old-Age, survivors, and disability insurance Section 1401(a) of the Internal Revenue Code of 1986 is amended— (1) by striking all that follows for such taxable year and inserting a period, and (2) by striking the following percent and inserting 6.2 percent. (b) Hospital insurance Section 1401(b) of such Code is amended— (1) by striking all that follows for such taxable year in paragraph (1) and inserting a period, (2) by striking the following percent in paragraph (1) and inserting 1.45 percent, and (3) by striking 0.9 percent in paragraph (2)(A) and inserting 0.45. (c) Effective date The amendments made by this section shall apply with respect to remuneration received after December 31, 2017. VII Repeal of estate and gift taxes 701. Repeal of estate and gift taxes (a) In general Subtitle B of the Internal Revenue Code of 1986 (relating to estate, gift, and generation-skipping taxes) is hereby repealed. (b) Effective date The repeal made by subsection (a) shall apply to estates of decedents dying, gifts made, and generation-skipping transfers made after the date of the enactment of this Act.