,,ii #aagth ,,congress #b;d ,session ,s4 #dcic ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,june #ad1 #bjbb,mr4 ,grassley 7for himself1 ,mr4 ,barrasso1 ,mr4 ,daines1 ,mr4 ,lankford1 ,mr4 ,young1 and ,mr4 ,cassidy7 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 modify the maximum capital gains tax rate1 to modify the tax on net investment income1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,middle-,class ,savings and ,investment ,act4 #b4 ,modification of capital gain rates 7a7 ,expansion of zero percent rate 7#a7 ,in general ,section #a7;h77#a77;,b77i7 of the ,internal ,revenue ,code of #aihf is amended by striking which would 7without regard to this paragraph7 be taxed at a rate below #be percent and inserting below the maximum zero rate amount4 7#b7 ,maximum zero rate amount ,section #a7;h7 of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new paragraph3 7#ab7 ,maximum zero rate amount 7,a7 ,in general ,the maximum zero rate amount shall be-- 7i7 in the case of a joint return or surviving spouse1 #afe1jjj1 7ii7 in the case of any other individual 7other than an estate or trust71 an amount equal to of the amount in effect for the taxable year under clause 7i71 and 7iii7 in the case of an estate or trust1 #b1fjj4 7,b7 ,inflation adjustment ,in the case of any taxable year beginning after #bjba1 each of the dollar amounts in subparagraph 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 determined by substituting calendar year #bjag for calendar year #bjaf in subparagraph 7,a77ii7 thereof4 ,if any increase under this subparagraph is not a multiple of #ej1 such increase shall be rounded to the next lowest multiple of #ej4 4 7#c7 ,conforming amendments ,paragraph 7#e7 of section #a7;j7 of such ,code is amended-- 7,a7 in subparagraph 7,a71 by striking shall be applied and all that follows through by substituting below the maximum #ae-percent rate amount and inserting shall be applied by substituting below the maximum #ae-percent rate amount1 7,b7 in subparagraph 7,b7-- 7i7 by striking all that preceding clause 7ii71 7ii7 by redesignating clause 7ii7 as subparagraph 7,b71 7iii7 by redesignating subclauses 7,i7 through 7,,iv7 of subparagraph 7,b7 7as so redesignated7 as clauses 7i7 through 7iv71 respectively1 and 7iv7 by moving subparagraph 7,b7 and each of clauses 7i7 through 7iv7 7as so redesignated7 #b ems to the left1 and 7,c7 in subparagraph 7,c71 by striking clauses 7i7 and 7ii7 of4 7b7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjba4 #c4 ,partial exclusion of certain interest received by individuals 7a7 ,in general ,part ,,iii of subchapter ,b of chapter #a of the ,internal ,revenue ,code of #aihf 7relating to amounts specifically excluded from gross income7 is amended by inserting after section #aae the following new section3 #aaf4 ,partial exclusion of certain interest received by individuals 7a7 ,exclusion from gross income ,gross income does not include the sum of the amounts received during the taxable year by an individual as qualified interest4 7b7 ,limitations ,the aggregate amount excluded under subsection 7a7 for any taxable year shall not exceed #cjj 7#fjj in the case of a joint return74 7c7 ,qualified interest ,for purposes of this section-- 7#a7 ,in general ,the term qualified interest means any interest other than interest excluded from gross income under any other provision of this chapter4 7#b7 ,special rules for dividends received from certain money market mutual funds 7,a7 ,in general ,the term qualified interest shall include qualified interest-related dividends4 7i7 ,in general ,except as provided in clause 7ii71 a qualified interest-related dividend is any dividend or part thereof 7other than a capital gain dividend or exempt interest dividend7-- 7,i7 paid by a regulated investment company regulated as a money market fund under section #bgj4b;a-#g of title #ag1 ,code of ,federal ,regulations1 and 7,,ii7 reported by the company as a qualified interest-related dividend in written statements furnished to its shareholders4 7ii7 ,excess reported amounts ,if the aggregate reported amount with respect to the company for any taxable year exceeds the applicable qualified interest of the company for such taxable year1 a qualified interest-related dividend is the excess of-- 7,i7 the reported qualified interest-related dividend amount1 over 7,,ii7 the excess reported amount which is allocable to such reported qualified interest-related dividend amount4 7iii7 ,allocation of excess reported amount 7,i7 ,in general ,except as provided in subclause 7,,ii71 the excess reported amount 7if any7 which is allocable to the reported qualified interest-related dividend amount is that portion of the excess reported amount which bears the same ratio to the excess reported amount as the reported qualified interest-related dividend amount bears to the aggregate reported amount4 7,,ii7 ,special rule for noncalendar year taxpayers ,in the case of any taxable year which does not begin and end in the same calendar year1 if the post-,december reported amount equals or exceeds the excess reported amount for such taxable year1 subclause 7,i7 shall be applied by substituting post-,december reported amount for aggregate reported amount and no excess reported amount shall be allocated to any dividend paid on or before ,december #ca of such taxable year4 7iv7 ,definitions ,for purposes of this subparagraph-- 7,i7 ,reported qualified interest-related dividend amount ,the term reported qualified interest-related dividend amount means the amount reported to its shareholders under clause 7i7 as a qualified interest-related dividend4 7,,ii7 ,excess reported amount ,the term excess reported amount means the excess of the aggregate reported amount over the applicable qualified interest of the company for the taxable year4 7,,iii7 ,aggregate reported amount ,the term aggregate reported amount means the aggregate amount of dividends reported by the company under clause 7i7 as qualified interest-related dividends for the taxable year 7including qualified interest-related dividends paid after the close of the taxable year described in section #hee74 7,,iv7 ,post-,december reported amount ,the term post-,december reported amount means the aggregate reported amount determined by taking into account only dividends paid after ,december #ca of the taxable year4 7,v7 ,applicable qualified interest ,the term applicable qualified interest means interest described in paragraph 7#a74 7d7 ,nonresident aliens ineligible for exclusion ,subsection 7a7 shall not apply to any nonresident alien individual4 7e7 ,regulations ,the ,secretary may prescribe such regulations as are appropriate 7including regulations requiring reporting7 to apply this section in the case of interest received-- 7#a7 from partnerships and ,s corporations1 and 7#b7 from a trade or business of the taxpayer4 4 7b7 ,conforming amendments 7#a7 ,the table of sections for part ,,iii of subchapter ,b of chapter #a of such ,code is amended by inserting after the item relating to section #aae the following new item3 ,sec4 #aaf4 ,partial exclusion of certain interest received by individuals4 4 7#b7 ,paragraph 7#b7 of section #bfe7;a7 of such ,code is amended by inserting before the period at the end the following3 1 or to purchase or carry obligations or shares1 or to make deposits1 to the extent the interest thereon is excludable from gross income under section #aaf4 7#c7 ,subsection 7c7 of section #ehd of such ,code is amended by adding at the end the following3 ,the proportionate share of each participant in the amount of qualified interest 7as defined in section #aaf7 received by the common trust fund shall be considered for purposes of such section as having been received by such participant44 7#d7 ,subsection 7a7 of section #fdc of such ,code is amended by redesignating paragraph 7#g7 as paragraph 7#h7 and by inserting after paragraph 7#f7 the following new paragraph3 7#g7 ,qualified interest ,there shall be included the amount of any qualified interest 7as defined in section #aaf7 excluded from gross income pursuant to section #aaf 7reduced by amounts which would be deductible in respect of disbursements allocable to such income but for the provisions of section #bfe74 4 7c7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjba4 #d4 ,modification of threshold amount under net investment income tax 7a7 ,in general ,section #adaa7;b7 of the ,internal ,revenue ,code of #aihf is amended to read as follows3 7b7 ,threshold amount ,for purposes of this chapter-- 7#a7 ,in general ,the term threshold amount means-- 7,a7 in the case of a taxpayer making a joint return under section #fjac or a surviving spouse 7as defined in section #b7;a771 #djj1jjj1 and 7,b7 in any other case1 of the dollar amount determined under paragraph 7#a74 7#b7 ,inflation adjustment ,in the case of any taxable year beginning in a calendar year after #bjbb1 the dollar amount in paragraph 7#a77;,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 determined by substituting calendar year #bjba for calendar year #bjaf in subparagraph 7,a77ii7 thereof4 ,any increase determined under the preceding sentence shall be rounded to the nearest multiple of #a1jjj4 4 7b7 ,effective date ,the amendment made by this section shall apply to taxable years beginning after ,december #ca1 #bjba4 #e4 ,enhancement of ,saver's ,credit 7a7 ,maximum contribution amount ,section #be;,b7a7 of the ,internal ,revenue ,code of #aihf is amended by striking #b1jjj and inserting #b1ejj4 7b7 ,modification of credit rate 7#a7 #ej percent credit rate ,section #be;,b7a7 of the ,internal ,revenue ,code of #aihf is amended by striking the applicable percentage and inserting #ej percent4 7#b7 ,adjusted gross income phaseouts ,section #be;,b7b7 of such ,code is amended to read as follows3 7b7 ,limitation ,for purposes of this section-- 7#a7 ,in general ,the amount of credit allowable under subsection 7a7 7determined without regard to this subsection7 shall be reduced 7but not below zero7 by an amount which bears the same ratio to the credit otherwise so allowable as-- 7,a7 the excess 7if any7 of-- 7i7 adjusted gross income of the taxpayer1 over 7ii7 the threshold amount1 bears to 7,b7 the phaseout amount4 7#b7 ,threshold amount ,the term threshold amount means-- 7,a7 in the case of a joint return or a surviving spouse 7as defined in section #b7;a771 #de1jjj1 7,b7 in the case of a head of household1 #ge percent of the amount in effect for the taxable year under subparagraph 7,a71 and 7,c7 in the case of any other individual1 #ej percent of the amount in effect for the taxable year under subparagraph 7,a74 7#c7 ,phaseout amount ,the term phaseout amount means-- 7,a7 in the case of a joint return or a surviving spouse 7as defined in #b7;a771 #dj1jjj1 7,b7 in the case of a head of household 7as defined in section #b7;b771 #ge percent of the amount in effect for the taxable year under subparagraph 7,a71 and 7,c7 in the case of any other individual1 #ej percent of the amount in effect for the taxable year under subparagraph 7,a74 7#d7 ,inflation adjustment 7,a7 ,in general ,in the case of any taxable year beginning in a calendar year after #bjbb1 the #de1jjj dollar amount in paragraph 7#b7 and the #dj1jjj in paragraph 7#c7 shall each be increased by an amount equal to-- 7i7 such dollar amount1 multiplied by 7ii7 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 #bjba for calendar year #bjaf in subparagraph 7,a77ii7 thereof4 7,b7 ,rounding ,any increase determined under subparagraph 7,a7 that is not a multiple of #ejj shall be rounded to the nearest multiple of #ejj4 4 7c7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjba4 #f4 ,extension of limitation on deduction for state and local taxes 7a7 ,in general ,section #afd7;b77#f7 of the ,internal ,revenue ,code of #aihf is amended-- 7#a7 by striking ,january #a1 #bjbf and inserting ,january #a1 #bjbi1 and 7#b7 by striking #bjbe in the heading thereof and inserting #bjbh4 7b7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjbb4