,i #aahth ,,congress #b;d ,session ,h4 ,r4 #ihgc ,,in ,,the ,,house ,,of ,,representatives ,september #bg1 #bjbd,ms4 ,lee of ,pennsylvania 7for herself1 ,ms4 ,lee of ,california1 ,mr4 ,jackson of ,illinois1 ,ms4 ,tlaib1 ,ms4 ,bush1 ,ms4 ,schakowsky1 ,ms4 ,mc,collum1 ,mrs4 ,ramirez1 and ,mr4 ,huffman7 introduced the following bill2 which was referred to the ,committee on ,education and the ,workforce1 and in addition to the ,committees on ,ways and ,means1 and ,oversight and ,accountability1 for a period to be subsequently determined by the ,speaker1 in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned ,a ,,bill ,to amend the ,fair ,labor ,standards ,act of #aich and the ,internal ,revenue ,code of #aihf to make certain modifications in relation to the minimum wage4 #a4 ,short title2 table of contents 7a7 ,short title ,this ,act may be cited as the ,american ,stability ,act4 7b7 ,table of contents ,the table of contents for this ,act is as follows3 ,sec4 #a4 ,short title2 table of contents4,title ,i--,minimum wage,sec4 #aja4 ,minimum wage increases4,sec4 #ajb4 ,tipped employees4,sec4 #ajc4 ,scheduled repeal of separate minimum wage for newly hired employees who are less than #bj years old4,sec4 #ajd4 ,publication of notice4,sec4 #aje4 ,promoting economic self-sufficiency for individuals with disabilities4,title ,,ii--,income tax modifications,sec4 #bja4 ,modification of income tax brackets based on annualized stability wage4,sec4 #bjb4 ,surcharge on high income individuals1 estates1 and trusts4,sec4 #bjc4 ,alternative maximum tax for low-income individuals4,title ,,iii--,earned income disallowance,sec4 #cja4 ,earned income disallowance4,title ,,iv--,effective date,sec4 #dja4 ,effective date4 ,i ,minimum wage #aja4 ,minimum wage increases 7a7 ,in general ,section #f7;a77#a7 of the ,fair ,labor ,standards ,act of #aich 7#bi ,u4,s4,c4 #bjf7;a77#a77 is amended to read as follows3 7#a7 except as otherwise provided in this section1 not less than-- 7,a7 #ae4jj an hour for the first calendar year beginning after the date of enactment of the ,american ,stability ,act2 7,b7 for each calendar year during the interval period 7as defined in subsection 7g771 a minimum wage equal to the amount determined under this paragraph for the preceding year1 increased by the lesser of-- 7i7 #aj percent2 or 7ii7 the amount necessary for the minimum wage to equal the stability wage for such calendar year2 and 7,c7 for each calendar year that begins after the interval period1 the stability wage for such calendar year4 4 7b7 ,stability wage ,section #f of such ,act 7#bi ,u4,s4,c4 #bjf7 is further amended by adding at the end the following3 7h7 ,stability wage 7#a7 ,in general 7,a7 ,determination ,the stability wage determined under this paragraph for a calendar year shall be an amount equal to the greater of-- 7i7 the average hourly earnings wage determined under paragraph 7#b7 for that calendar year2 7ii7 the cost-of-living wage determined under paragraph 7#c7 for that calendar year2 or 7iii7 the stability wage in effect for the preceding year4 7,b7 ,rounding ,if the amount determined under subparagraph 7,a7 is not a multiple of #e cents1 such amount shall be rounded to the next higher multiple of #e cents4 7#b7 ,average hourly earnings wage ,the average hourly earnings wage for any calendar year shall be an amount equal to #bj4jj1 multiplied by the ratio of-- 7,a7 the average hourly earnings for the year preceding such calendar year1 to 7,b7 the average hourly earnings for the year preceding the calendar year of the date of enactment of the ,american ,stability ,act4 7#c7 ,cost-of-living wage ,the cost-of-living wage for any calendar year shall be an amount equal to #bj4jj1 multiplied by the ratio of-- 7,a7 the ,,cpi-,u for the year preceding such calendar year1 to 7,b7 the ,,cpi-,u for the year preceding the calendar year of the date of enactment of the ,american ,stability ,act4 7#d7 ,definitions ,for the purposes of this paragraph and subsection 7a77#a73 7,a7 ,,cpi-,u ,the term ,,cpi-,u means1 when used with respect to a calendar year1 the ,consumer ,price ,index for all urban consumers1 as published by the ,bureau of ,labor ,statistics1 for ,september of such year4 7,b7 ,average hourly earnings ,the term average hourly earnings means1 when used with respect to a calendar year1 the total private average hourly earnings from the data on average hourly and weekly earnings of production and nonsupervisory employees on private nonfarm payrolls by industry sector1 seasonally adjusted1 as published by the ,bureau of ,labor ,statistics1 for ,september of such year4 7,c7 ,interval period ,the term interval period means the period-- 7i7 beginning on the first day of the #ast calendar year beginning after the date of enactment of the ,american ,stability ,act2 and 7ii7 ending at the close of the last day of the first calendar year for which the minimum wage under subsection 7a77#a7 equals the stability wage determined under paragraph 7#a7 of this subsection for such calendar year4 4 #ajb4 ,tipped employees 7a7 ,base minimum wage for tipped employees and tips retained by employees 7#a7 ,in general ,section #c7m77#b77;,a7 of the ,fair ,labor ,standards ,act of #aich 7#bi ,u4,s4,c4 #bjc7m77#b77;,a77 shall be amended to read as follows3 7,a7 ,the wage required to be paid to a tipped employee shall be the wage set forth in section #f7;a77#a74 ,any employee shall have the right to retain any tips received by such employee1 except that this subsection shall not be construed to prohibit the pooling of tips among employees who customarily and regularly receive tips4 ,an employer shall inform each employee of the right and exception provided under the preceding sentence4 4 7#b7 ,effective date ,the amendment made by subsection 7a7 shall take effect on ,january #a of the first calendar year that begins after the date of enactment of this ,act4 7b7 ,penalties ,section #af of the ,fair ,labor ,standards ,act of #aich 7#bi ,u4,s4,c4 #baf7 is amended-- 7#a7 in the third sentence of subsection 7b71 by inserting or used after kept2 and 7#b7 in the second sentence of subsection 7e77#b71 by inserting or used after kept4 #ajc4 ,scheduled repeal of separate minimum wage for newly hired employees who are less than #bj years old 7a7 ,in general ,section #f7;g7 of the ,fair ,labor ,standards ,act of #aich 7#bi ,u4,s4,c4 #bjf7;g771 as amended by subsection 7a71 shall be repealed4 7b7 ,effective date ,the repeal made by subsection 7a7 shall take effect on ,january #a of the first calendar year that begins after the date of enactment of this ,act4 #ajd4 ,publication of notice2 technical assistance ,section #f of the ,fair ,labor ,standards ,act of #aich 7#bi ,u4,s4,c4 #bjf71 as amended by section #b7;b71 is further amended by adding at the end the following3 7i7 ,publication of wage rates ,not later than #fj days prior to the effective date of any increase in the required wage determined under subsection 7a77#a71 the ,secretary shall publish in the ,federal ,register and on the website of the ,department of ,labor a notice announcing each increase in such required wage4 7j7 ,transition assistance ,upon request1 the ,secretary shall provide-- 7#a7 technical assistance and information to employers for the purposes of-- 7,a7 assisting such employers to comply with subsection 7a71 as amended by the ,american ,stability ,act2 and 7,b7 ensuring continuing employment opportunities for individuals with disabilities who received a special minimum wage rate under this section #ad7;c7 7as in effect on the day before the date of enactment of the ,american ,stability ,act72 and 7#b7 information to individuals who were employed at a special minimum wage rate under section #ad7;c7 7as in effect on the day before the date of enactment of the ,american ,stability ,act71 which may include referrals to ,federal or ,state entities with expertise in competitive integrated employment4 4 #aje4 ,promoting economic self-sufficiency for individuals with disabilities 7a7 ,transition to fair wages for individuals with disabilities 7#a7 ,in general ,subparagraph 7,a7 of section #ad7;c77#a7 of the ,fair ,labor ,standards ,act of #aich 7#bi ,u4,s4,c4 #bad7;c77#a77 shall be amended to read as follows3 7,a7 at a rate that equals or exceeds1 for each year1 the wage set forth in section #f7;a77#a74 4 7#b7 ,effective date ,the amendment made by paragraph 7,a7 shall take effect on ,january #a of the first calendar year that begins after the date of enactment of this ,act4 7b7 ,prohibition on new special certificates 7#a7 ,in general ,section #ad7;c7 of the ,fair ,labor ,standards ,act of #aich 7#bi ,u4,s4,c4 #bad7;c77 is amended by adding at the end the following3 7#f7 ,prohibition on new special certificates ,notwithstanding paragraph 7#a71 the ,secretary shall not issue a special certificate under this subsection to an employer that was not issued a special certificate under this subsection before the date of enactment of the ,american ,stability ,act4 4 7#b7 ,sunset ,section #ad7;c7 of the ,fair ,labor ,standards ,act of #aich 7#bi ,u4,s4,c4 #bad7;c771 as amended by paragraph 7#b71 is further amended by adding at the end the following3 7#g7 ,sunset ,on ,january #a of the first calendar year that begins after the date of enactment of the ,american ,stability ,act1 the authority to issue special certificates under paragraph 7#a7 shall expire1 and no special certificates issued under paragraph 7#a7 shall have any legal effect 4 4 7#c7 ,effective date ,the amendments made by this paragraph shall take effect on the date of enactment of this ,act4 ,i ,income tax modifications #a4 ,modification of income tax brackets based on annualized stability wage 7a7 ,in general ,section #a of the ,internal ,revenue ,code of #aihf is amended by striking subsections 7a71 7b71 7c71 7d71 and 7e7 and inserting the following new subsections3 7a7 ,in general ,there is hereby imposed on the taxable income of every individual1 every estate1 and every trust a tax determined under this section4 7b7 ,amount of tax ,the tax determined under this section shall be equal to-- 7#a7 in the case of any taxpayer whose taxable income does not exceed the maximum bracket amount for the lowest tax bracket for the taxpayer's filing status1 the product of the percentage which constitutes such lowest tax bracket multiplied by such taxable income1 and 7#b7 in the case of any taxpayer whose taxable income exceeds the maximum bracket amount for such lowest tax bracket1 the sum of-- 7,a7 the maximum tax amount for each tax bracket for the taxpayer's filing status with respect to which the taxpayer's taxable income exceeds the maximum bracket amount for such tax bracket1 plus 7,b7 the product of-- 7i7 the percentage which constitutes the tax bracket for the taxpayer's filing status which is next above the highest bracket amount for which an amount is included under subparagraph 7,a71 multiplied by 7ii7 so much of the taxable income of the taxpayer as exceeds the maximum bracket amount of such highest tax bracket4 7c7 ,determination of maximum bracket amounts 7#a7 ,married individuals filing joint returns and surviving spouses ,in the case of every married individual 7as defined in section #ggjc7 who makes a single return jointly with the individual's spouse under section #fjac1 and every surviving spouse-- 7,a7 the maximum bracket amount for the #aj percent bracket is the product of #j4ef multiplied by the annualized stability wage for the taxable year1 7,b7 the maximum bracket amount for the #ab percent bracket is the product of #b4bh multiplied by the annualized stability wage for the taxable year1 7,c7 the maximum bracket amount for the #bb percent bracket is the product of #d4h multiplied by the annualized stability wage for the taxable year1 7,d7 the maximum bracket amount for the #bd percent bracket is the product of #i4b multiplied by the annualized stability wage for the taxable year1 7,e7 the maximum bracket amount for the #cb percent bracket is the product of #aa4f multiplied by the annualized stability wage for the taxable year1 7,f7 the maximum bracket amount for the #ce percent bracket is the product of #ag4f multiplied by the annualized stability wage for the taxable year1 and 7,g7 the maximum bracket amount for the #cg percent bracket is infinite4 7#b7 ,heads of households ,in the case of every head of household-- 7,a7 the maximum bracket amount for the #aj percent bracket is the product of #j4db multiplied by the annualized stability wage for the taxable year1 7,b7 the maximum bracket amount for the #ab percent bracket is the product of #a4eb multiplied by the annualized stability wage for the taxable year1 7,c7 the maximum bracket amount for the #bb percent bracket is the product of #b4d multiplied by the annualized stability wage for the taxable year1 7,d7 the maximum bracket amount for the #bd percent bracket is the product of #d4f multiplied by the annualized stability wage for the taxable year1 7,e7 the maximum bracket amount for the #cb percent bracket is the product of #e4h multiplied by the annualized stability wage for the taxable year1 7,f7 the maximum bracket amount for the #ce percent bracket is the product of #ad4f multiplied by the annualized stability wage for the taxable year1 and 7,g7 the maximum bracket amount for the #cg percent bracket is infinite4 7#c7 ,unmarried individuals 7other than surviving spouses and heads of households7 ,in the case of every individual 7other than a surviving spouse or a head of household7 who is not a married individual 7as defined in section #ggjc7-- 7,a7 the maximum bracket amount for the #aj percent bracket is the product of #j4bh multiplied by the annualized stability wage for the taxable year1 7,b7 the maximum bracket amount for the #ab percent bracket is the product of #a4ad multiplied by the annualized stability wage for the taxable year1 7,c7 the maximum bracket amount for the #bb percent bracket is the product of #b4d multiplied by the annualized stability wage for the taxable year1 7,d7 the maximum bracket amount for the #bd percent bracket is the product of #d4f multiplied by the annualized stability wage for the taxable year1 7,e7 the maximum bracket amount for the #cb percent bracket is the product of #e4h multiplied by the annualized stability wage for the taxable year1 7,f7 the maximum bracket amount for the #ce percent bracket is the product of #ad4f multiplied by the annualized stability wage for the taxable year1 and 7,g7 the maximum bracket amount for the #cg percent bracket is infinite4 7#d7 ,married individuals filing separate returns ,in the case of every married individual 7as defined in section #ggjc7 who does not make a single return jointly with the individual's spouse under section #fjac-- 7,a7 the maximum bracket amount for the #aj percent bracket is the product of #j4bh multiplied by the annualized stability wage for the taxable year1 7,b7 the maximum bracket amount for the #ab percent bracket is the product of #a4ad multiplied by the annualized stability wage for the taxable year1 7,c7 the maximum bracket amount for the #bb percent bracket is the product of #b4d multiplied by the annualized stability wage for the taxable year1 7,d7 the maximum bracket amount for the #bd percent bracket is the product of #d4f multiplied by the annualized stability wage for the taxable year1 7,e7 the maximum bracket amount for the #cb percent bracket is the product of #e4h multiplied by the annualized stability wage for the taxable year1 7,f7 the maximum bracket amount for the #ce percent bracket is the product of #h4h multiplied by the annualized stability wage for the taxable year1 and 7,g7 the maximum bracket amount for the #cg percent bracket is infinite4 7#e7 ,estates and trusts ,in the case of every estate and every trust for the taxable year-- 7,a7 the maximum bracket amount for the #aj percent bracket is the product of #j4jh multiplied by the annualized stability wage for the taxable year1 7,b7 the maximum bracket amount for the #bd percent bracket is the product of #j4bg multiplied by the annualized stability wage for the taxable year1 7,c7 the maximum bracket amount for the #ce percent bracket is the product of #j4cg multiplied by the annualized stability wage for the taxable year1 and 7,d7 the maximum bracket amount for the #cg percent bracket is infinite4 7d7 ,definitions ,for purposes of this section-- 7#a7 ,annualized stability wage ,the term annualized stability wage means1 with respect to any taxable year1 the product of #b1jhj multiplied by the stability wage 7as defined in section #f of the ,fair ,labor ,standards ,act of #aich7 for the calendar year in which or with which such taxable year begins4 7#b7 ,maximum tax amount 7,a7 ,in general ,the term maximum tax amount means1 with respect to any tax bracket1 the product of-- 7i7 the percentage which constitutes such tax bracket1 multiplied by 7ii7 the excess of-- 7,i7 the maximum bracket amount for such tax bracket1 over 7,,ii7 the highest maximum bracket amount for the taxpayer's filing status which is less than the maximum bracket amount referred to in subclause 7,i74 7,b7 ,special rule for lowest tax bracket ,for purposes of determining the maximum tax amount with respect to the lowest tax bracket for a taxpayer's filing status1 the amount specified in subparagraph 7,a77ii77,,ii7 shall be treated as being zero4 7#c7 ,filing status ,the term filing status means1 with respect to any taxpayer1 the status of such taxpayer as being described in paragraph 7#a71 7#b71 7#c71 7#d71 or 7#e7 of subsection 7c74 7#d7 ,tax brackets ,the term tax bracket means1 with respect to the filing status of any taxpayer1 each bracket for which a maximum bracket amount is determined for such filing status4 4 7b7 ,conforming amendments 7#a7 ,section #a7;f7 of such ,code is amended by striking all that precedes paragraph 7#c7 and inserting the following3 7f7 ,publication of tax tables2 retention of cost-of-,living adjustment for other provisions 7#a7 ,publication of tax tables ,not later than ,december #ae of #bjbd1 and each subsequent calendar year1 the ,secretary shall publish tax tables which state the dollar amounts in effect under subsections 7b7 and 7c7 with respect to taxable years beginning in the succeeding calendar year4 4 7#b7 ,section #a7;f77#c7 of such ,code is amended by striking ,for purposes of this subsection and inserting ,for purposes of any provision of law which refers to this subsection4 7#c7 ,section #a7;f7 of such ,code is amended by striking paragraphs 7#g7 and 7#h7 and inserting the following new paragraph3 7#g7 ,rounding ,if any increase determined under section #fc7;c77#d71 section #fh7;b77#b71 or section #aea7;d77#d7 is not a multiple of #ej1 such increase shall be rounded to the next lowest multiple of #ej4 4 7#d7 ,section #a of such ,code is amended by striking subsections 7i7 and 7j74 7c7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjbd4 #b4 ,surcharge on high income individuals1 estates1 and trusts 7a7 ,in general ,part ,i of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf is amended by inserting after section #a the following new section3 #a;,a4 ,surcharge on high income individuals1 estates1 and trusts 7a7 ,general rule ,in the case of a taxpayer other than a corporation1 there is hereby imposed 7in addition to any other tax imposed by this subtitle7 a tax equal to the sum of-- 7#a7 #c percent of so much of the modified adjusted gross income of the taxpayer as exceeds-- 7,a7 the product of #be multiplied by the annualized stability wage for the taxable year1 in the case of any taxpayer not described in subparagraph 7,b7 or 7,c71 7,b7 the product of #ab4e multiplied by the annualized stability wage for the taxable year1 in the case of a married individual filing a separate return1 and 7,c7 the product of #d4h multiplied by the annualized stability wage for the taxable year1 in the case of an estate or trust1 plus 7#b7 #e percent of so much of the modified adjusted gross income of the taxpayer as exceeds-- 7,a7 the product of #cfe multiplied by the annualized stability wage for the taxable year1 in the case of any taxpayer not described in subparagraph 7,b7 or 7,c71 7,b7 the product of #ahb4e multiplied by the annualized stability wage for the taxable year1 in the case of a married individual filing a separate return1 and 7,c7 the product of #ab multiplied by the annualized stability wage for the taxable year1 in the case of an estate or trust4 7b7 ,modified adjusted gross income ,for purposes of this section1 the term modified adjusted gross income means adjusted gross income reduced by any deduction 7not taken into account in determining adjusted gross income7 allowed for investment interest 7as defined in section #afc7;d77 or business interest 7as defined in section #afc7;j774 ,in the case of an estate or trust1 adjusted gross income shall be determined as provided in section #fg7;e71 and reduced by the amount allowed as a deduction under section #fdb7;c74 7c7 ,annualized stability wage ,for purposes of this section1 the term annualized stability wage has the meaning given such term in section #a7;d77#a74 7d7 ,special rules 7#a7 ,nonresident alien ,in the case of a nonresident alien individual 7other than an individual described in section #hgf7;a7 or #hgg7;a771 only amounts taken into account in connection with the tax imposed under section #hga7;b7 shall be taken into account under this section4 7#b7 ,citizens and residents living abroad ,each dollar amount which is applicable to any taxpayer under subsection 7a7 shall be decreased 7but not below zero7 by the excess 7if any7 of-- 7,a7 the amounts excluded from the taxpayer's gross income under section #iaa1 over 7,b7 the amounts of any deductions or exclusions disallowed under section #iaa7;d77#f7 with respect to the amounts described in subparagraph 7,a74 7#c7 ,charitable trusts ,subsection 7a7 shall not apply to a trust all the unexpired interests in which are devoted to one or more of the purposes described in section #agj7;c77#b77;,b74 7#d7 ,not treated as tax imposed by this chapter for certain purposes ,the tax imposed under this section shall not be treated as tax imposed by this chapter for purposes of determining the amount of any credit under this chapter 7other than sections #bg and #ija7 or for purposes of section #ee4 7#e7 ,electing small business trusts ,for purposes of the determination of adjusted gross income1 section #fda7;c77#a77;,a7 shall not apply and all portions of any electing small business trust shall be treated as a single trust4 7e7 ,regulations ,the ,secretary shall issue such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this section1 including regulations or other guidance to prevent the avoidance of the purposes of this section4 4 7b7 ,coordination with certain provisions 7#a7 ,interest on certain deferred tax liability ,section #dec;,a7c7 of such ,code is amended by redesignating paragraph 7#f7 as paragraph 7#g7 and by inserting after paragraph 7#e7 the following new paragraph3 7#f7 ,surcharge on high income individuals taken into account in determining maximum rate of tax ,for purposes of paragraph 7#c77;,b71 the maximum rate of tax in effect under section #a shall be treated as being equal to the sum of such rate and the rates in effect under paragraphs 7#a7 and 7#b7 of section #a;,a7a74 4 7#b7 ,alien residents of ,puerto ,rico1 ,guam1 ,american ,samoa1 or the ,northern ,mariana ,islands ,section #hgf7;a7 of such ,code is amended by striking section #a and inserting sections #a and #a;,a4 7#c7 ,expatriation to avoid tax ,section #hgg7;b7 of such ,code is amended by inserting and section #a;,a after section #a or #ee4 7#d7 ,limitation on foreign tax credit 7,a7 ,section #ijd7;b77#c77;,e77i77,i7 of such ,code is amended by inserting increased by the sum of the rates set forth in paragraphs 7#a7 and 7#b7 of section #a;,a7a7 after 7whichever applies74 7,b7 ,section #ijd7;d77#b77;,f7 of such ,code is amended by adding at the end the following3 ,for purposes of the first sentence of this subparagraph1 the highest rate of tax specified in section #a shall be treated as being equal to the sum of such rate and the rates in effect under paragraphs 7#a7 and 7#b7 of section #a;,a7a744 7#e7 ,election by individuals to be subject to tax at corporate rates ,section #ifb7;a77#a7 of such ,code is amended by inserting 1 #a;,a1 after sections #a4 7#f7 ,interest on certain tax deferral ,section #abia7;c77#b7 of such ,code is amended by adding at the end the following3 ,for purposes of the preceding sentence1 the highest rate of tax in effect under section #a shall be treated as being equal to the sum of such rate and the rates in effect under paragraphs 7#a7 and 7#b7 of section #a;,a7a744 7#g7 ,averaging of farm income ,section #acja7;a7 of such ,code is amended by striking section #a both places it appears and inserting sections #a and #a;,a4 7#h7 ,title #aa cases ,section #acih7;c77#b7 of such ,code is amended by inserting and tax shall be imposed under section #a;,a by treating the estate as a married individual filing a separate return before the period at the end4 7#i7 ,withholding of tax on foreign partners' share of effectively connected income ,section #addf7;b77#b7 of such ,code is amended by adding at the end the following flush sentence3 ,for purposes of subparagraph 7,a71 the highest rate of tax in effect under section #a shall be treated as being equal to the sum of such rate and the rates in effect under paragraphs 7#a7 and 7#b7 of section #a;,a7a74 4 7#aj7 ,relief from joint and several liability on joint return ,section #fjae7;d77#b77;,b7 of such ,code is amended by inserting 1 #a;,a1 after section #a4 7#aa7 ,partnership adjustments 7,a7 ,section #fbbe7;b77#a7 of such ,code is amended by adding at the end the following flush sentence3 ,for purposes of subparagraph 7,b71 the highest rate of tax in effect under section #a shall be treated as being equal to the sum of such rate and the rates in effect under paragraphs 7#a7 and 7#b7 of section #a;,a7a74 4 7,b7 ,section #fbbe7;c77#d77;,a7 of such ,code is amended-- 7i7 by striking subsection 7b77#a77;,a7 and inserting subsection 7b77#a77;,b71 and 7ii7 by striking or at the end of clause 7i71 by adding or at the end of clause 7ii71 and by inserting after clause 7ii7 the following new clause3 7iii7 is not an individual subject to one or both of the rates of tax in effect under paragraphs 7#a7 and 7#b7 of section #a;,a7a71 4 7#ab7 ,required payments for entities electing not to have required taxable year ,section #geai7;b7 of such ,code is amended by inserting and increased by the sum of the rates in effect under paragraphs 7#a7 and 7#b7 of section #a;,a7a7 before the period at the end4 7c7 ,clerical amendment ,the table of sections for part ,i of subchapter ,a of chapter #a of such ,code is amended by inserting after the item relating to section #a the following new item3 ,sec4 #a;,a4 ,surcharge on high income individuals4 4 7d7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjbd4 #c4 ,alternative maximum tax for low-income individuals 7a7 ,in general ,part ,i of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf1 as amended by section #bjb1 is amended by inserting after section #a;,a the following new section3 #a;,b4 ,alternative maximum tax for low-income individuals 7a7 ,in general ,in the case of an qualified low-income individual1 the tax imposed under section #a for any taxable year shall not exceed #bd4d percent of the excess of-- 7#a7 the taxpayer's modified adjusted gross income for such taxable year1 over 7#b7 the cost-of-living exemption for such taxable year4 7b7 ,qualified low-,income individual ,for purposes of this section1 the term qualified low-income individual means1 with respect to any taxable year1 any individual 7other than an estate or trust7 if the taxpayers modified adjusted gross income for such taxable year is less than #bjj percent of the cost-of-living exemption for such taxable year4 7c7 ,cost-of-,living exemption ,for purposes of this section-- 7#a7 ,in general ,the term cost-of-living exemption means1 with respect to any taxable year-- 7,a7 in the case of a taxpayer not described in subparagraph 7,b7 or 7,c71 #ajj percent of annualized cost-of-living wage1 7,b7 in the case of a joint return1 #bjj percent of the annualized cost-of-living wage1 and 7,c7 in the case of a head of household1 #adj percent of the annualized cost-of-living wage4 7#b7 ,annualized cost-of-living wage ,the term annualized cost-of-living wage means1 with respect to any taxable year1 the product of #b1jhj multiplied by the cost-of-living wage 7as defined in section #f of the ,fair ,labor ,standards ,act of #aich7 for the calendar year in which or with which such taxable year begins4 7d7 ,modified adjusted gross income ,for purposes of this section1 the term modified adjusted gross income means adjusted gross income increased by any amount excluded from gross income under section #iaa1 #ica1 or #icc4 4 7b7 ,clerical amendment ,the table of sections for part ,i of subchapter ,a of chapter #a of such ,code1 as amended by section #bjb1 is amended by inserting after the item relating to section #a;,a the following new item3 ,sec4 #a;,b4 ,alternative maximum tax for low-income individuals4 4 7c7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjbd4 ,,ii ,earned income disallowance #cja4 ,earned income disallowance 7a7 ,in general ,notwithstanding any other provision of law1 for purposes of determining the eligibility of a specified individual for benefits or assistance 7or the amount or extent of benefits or assistance7 under any means-tested ,federal program1 or under any means-tested ,state or local program financed in whole or in part with ,federal funds-- 7#a7 with respect to the #a-year period beginning on the effective date described in section #dja1 if the earned income of such individual for such #a-year period 7determined without regard to this section7 does not exceed the product of #b1jhj multiplied by the cost-of-living wage 7as defined in section #f of the ,fair ,labor ,standards ,act of #aich7 for the calendar year in which such #a-year period ends1 the earned income of such individual shall not be treated as exceeding the earned income of such individual for the #a-year period ending on such effective date1 and 7#b7 with respect to the #a-year period beginning #a year after such effective date1 if the earned income of such individual for such #a-year period 7determined without regard to this section7 does not exceed the product of #b1jhj multiplied by the cost-of-living wage 7as defined in section #f of the ,fair ,labor ,standards ,act of #aich7 for the calendar year in which such #a-year period ends1 the earned income of such individual shall not be treated as exceeding the sum of-- 7,a7 the earned income of such individual for the #a-year period ending on such effective date1 plus 7,b7 #ej percent of the excess 7if any7 of-- 7i7 the earned income of such individual for the #a-year period beginning #a year after such effective date1 over 7ii7 the earned income of such individual for the #a-year period ending on such effective date4 7b7 ,specified individual ,for purposes of this section1 the specified individual means any individual if the earned income of such individual for the #a-year period ending on the effective date described in section #daj exceeds zero4 ,,iii ,effective date #dja4 ,effective date ,except as otherwise specified in this ,act1 this ,act1 and the amendments made by this ,act1 shall take effect on the #ast day of the #crd month that begins after the date of enactment of this ,act4