Home > 105th Congressional Bills > H.R. 3656 (ih) To amend the Internal Revenue Code of 1986 to provide an election of a deduction in lieu of a basis increase where indebtedness secured by property has original issue discount and is held by a cash method taxpayer. ...H.R. 3656 (ih) To amend the Internal Revenue Code of 1986 to provide an election of a deduction in lieu of a basis increase where indebtedness secured by property has original issue discount and is held by a cash method taxpayer. ...
108th CONGRESS
1st Session
H. R. 3655
To amend the Internal Revenue Code of 1986 to replace the earned income
credit, the child tax credit, and the deduction for dependents with a
simplified family tax credit.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
December 8, 2003
Mr. Kucinich (for himself, Ms. Lee, and Mr. Sanders) 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 replace the earned income
credit, the child tax credit, and the deduction for dependents with a
simplified family tax credit.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE, ETC.
(a) Short Title.--This Act may be cited as the ``Progressive Tax
Act of 2003''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is expressed in
terms of an amendment to, or repeal of, a section or other provision,
the reference shall be considered to be made to a section or other
provision of the Internal Revenue Code of 1986.
(c) Table of Contents.--
Sec. 1. Short title, etc.
TITLE I--TAX RELIEF
Sec. 101. Simplified family credit.
Sec. 102. Child support included in gross income of recipient and
allowed as deduction to payor.
Sec. 103. Refundable credit for payroll taxes.
TITLE II--PROVISIONS RELATING TO CORPORATE TAX
Subtitle A--Provisions Designed To Curtail Tax Shelters
Sec. 201. Clarification of economic substance doctrine.
Sec. 202. Penalty for failing to disclose reportable transaction.
Sec. 203. Accuracy-related penalty for listed transactions and other
reportable transactions having a
significant tax avoidance purpose.
Sec. 204. Penalty for understatements attributable to transactions
lacking economic substance, etc.
Sec. 205. Modifications of substantial understatement penalty for
nonreportable transactions.
Sec. 206. Tax shelter exception to confidentiality privileges relating
to taxpayer communications.
Sec. 207. Disclosure of reportable transactions.
Sec. 208. Modifications to penalty for failure to register tax
shelters.
Sec. 209. Modification of penalty for failure to maintain lists of
investors.
Sec. 210. Modification of actions to enjoin certain conduct related to
tax shelters and reportable transactions.
Sec. 211. Understatement of taxpayer's liability by income tax return
preparer.
Sec. 212. Penalty on failure to report interests in foreign financial
accounts.
Sec. 213. Frivolous tax submissions.
Sec. 214. Regulation of individuals practicing before the Department of
Treasury.
Sec. 215. Penalty on promoters of tax shelters.
Sec. 216. Statute of limitations for taxable years for which listed
transactions not reported.
Sec. 217. Denial of deduction for interest on underpayments
attributable to nondisclosed reportable and
noneconomic substance transactions.
Subtitle B--Other Provisions
Sec. 221. Limitation on transfer or importation of built-in losses.
Sec. 222. Disallowance of certain partnership loss transfers.
Sec. 223. No reduction of basis under section 734 in stock held by
partnership in corporate partner.
Sec. 224. Repeal of special rules for FASITS.
Sec. 225. Expanded disallowance of deduction for interest on
convertible debt.
Sec. 226. Expanded authority to disallow tax benefits under section
269.
Sec. 227. Modifications of certain rules relating to controlled foreign
corporations.
Sec. 228. Basis for determining loss always reduced by nontaxed portion
of dividends.
Sec. 229. Affirmation of consolidated return regulation authority.
TITLE III--OTHER REVENUE OFFSETS
Sec. 301. Modification of individual income tax brackets and rates.
Sec. 302. Repeal of removal of limitations on itemized deductions and
exemption amount.
Sec. 303. Individual capital gains and dividends treated as ordinary
income.
Sec. 304. Restoration and modifications of estate tax; repeal of
carryover basis.
Sec. 305. Extension of superfund, oil spill liability, and leaking
underground storage tank taxes.
Sec. 306. Limitation on certain business provisions enacted in 2002 and
2003.
Sec. 307. Repeal of exclusion for parking transportation fringe
benefit.
Sec. 308. Repeal of certain deductions relating to second homes.
TITLE I--TAX RELIEF
SEC. 101. SIMPLIFIED FAMILY CREDIT.
(a) In General.--Section 32 of the Internal Revenue Code of 1986
(relating to earned income credit) is amended to read as follows:
``SEC. 32. SIMPLIFIED FAMILY CREDIT.
``(a) Allowance of Credit.--In the case of an eligible individual,
there shall be allowed as a credit against the tax imposed by this
subtitle for the taxable year an amount equal to 50 percent of the
taxpayer's modified adjusted gross income for the taxable year.
``(b) Limitations.--For purposes of subsection (a)--
``(1) Limitation based on qualifying children.--The amount
of the credit allowable to a taxpayer under paragraph (1) for
any taxable year shall not exceed the lesser of--
``(A) $2,000 multiplied by the number of qualifying
children of the taxpayer, and
``(B) 50 percent of earned income.
``(2) Limitation based on adjusted gross income.--
``(A) In general.--The amount of the credit
allowable under subsection (a) shall be reduced (but
not below zero) by $50 for each $1,000 (or fraction
thereof) by which the taxpayer's modified adjusted
gross income exceeds the threshold amount.
``(B) Threshold amount.--For purposes of
subparagraph (A), the term `threshold amount' means--
``(i) $150,000 in the case of a joint
return,
``(ii) $100,000 in the case of an
individual who is not married, and
``(iii) $75,000 in the case of a married
individual filing a separate return.
For purposes of this paragraph, marital status shall be
determined under section 7703.
``(3) Limitation on amount of refundable credit.--
``(A) In general.--The amount of the credit allowed
under subsection (a) for a taxable year which is
allowed under this subpart shall not exceed the earned
income of the taxpayer for such year.
``(B) Allowance of remaining amount of credit.--The
excess of--
``(i) the amount of the credit allowed
under subsection (a), over
``(ii) the amount of the credit allowed
under this subpart by reason of subparagraph
(A),
shall be treated as a credit allowed under subpart B
for such taxable year and not under this subpart.
``(c) Definitions and Special Rules.--For purposes of this
section--
``(1) Eligible individual.--
``(A) In general.--The term `eligible individual'
means any individual who has a qualifying child for the
taxable year.
``(B) Individual who is qualifying child
ineligible.--If an individual is the qualifying child
of a taxpayer for any taxable year of such taxpayer
beginning in a calendar year, such individual shall not
be treated as an eligible individual for any taxable
year of such individual beginning in such calendar
year.
``(C) Exception for individual claiming benefits
under section 911.--The term `eligible individual' does
not include any individual who claims the benefits of
section 911 (relating to citizens or residents living
abroad) for the taxable year.
``(D) Limitation on eligibility of nonresident
aliens.--The term `eligible individual' 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 (g)
or (h) of section 6013.
``(E) Identification number requirement.--No credit
shall be allowed under this section to an eligible
individual who does not include on the return of tax
for the taxable year--
``(i) such individual's taxpayer
identification number, and
``(ii) if the individual is married (within
the meaning of section 7703), the taxpayer
identification number of such individual's
spouse.
``(F) Individuals who do not include TIN, etc., of
any qualifying child.--No credit shall be allowed under
this section to any eligible individual who has one or
more qualifying children if no qualifying child of such
individual is taken into account under subsection (b)
by reason of paragraph (2)(F).
``(2) Qualifying child.--
``(A) In general.--The term `qualifying child'
means, with respect to any taxpayer for any taxable
year, an individual--
``(i) who bears a relationship to the
taxpayer described in subparagraph (B),
``(ii) who has the same principal place of
abode as the taxpayer for more than one-half of
such taxable year (or, in the case of a
student, meets the requirements of subparagraph
(F)), and
``(iii) who meets the age requirements of
subparagraph (C).
``(B) Relationship test.--
``(i) In general.--An individual bears a
relationship to the taxpayer described in this
subparagraph if such individual is--
``(I) a son, daughter, stepson, or
stepdaughter, or a descendant of any
such individual,
``(II) a brother, sister,
stepbrother, or stepsister, or a
descendant of any such individual, who
the taxpayer cares for as the
taxpayer's own child, or
``(III) an eligible foster child of
the taxpayer.
``(ii) Married children.--Clause (i) shall
not apply to any individual who has made a
joint return with his spouse under section 6013
for the taxable year beginning in the calendar
year in which the taxable year of the taxpayer
begins.
``(iii) Eligible foster child.--For
purposes of clause (i), the term `eligible
foster child' means an individual not described
in subclause (I) or (II) of clause (i) who--
``(I) is placed with the taxpayer
by an authorized placement agency, and
``(II) the taxpayer cares for as
the taxpayer's own child.
``(iv) Adoption.--For purposes of this
subparagraph, a child who is legally adopted,
or who is placed with the taxpayer by an
authorized placement agency for adoption by the
taxpayer, shall be treated as a child by blood.
``(C) Age requirements.--An individual meets the
requirements of this subparagraph if such individual--
``(i) has not attained the age of 19 as of
the close of the calendar year in which the
taxable year of the taxpayer begins,
``(ii) is a student who has not attained
the age of 24 as of the close of such calendar
year, or
``(iii) is permanently and totally disabled
(as defined in section 22(e)(3)) at any time
during the taxable year.
``(D) Identification requirements.--
``(i) In general.--A qualifying child shall
not be taken into account under subsection (b)
unless the taxpayer includes the name, age, and
TIN of the qualifying child on the return of
tax for the taxable year.
``(ii) Other methods.--The Secretary may
prescribe other methods for providing the
information described in clause (i).
``(E) Abode must be in the united states.--The
requirements of subparagraph (A)(ii) shall be met only
if the principal place of abode is in the United
States.
``(F) Special rules relating to students.--For
purposes of this paragraph--
``(i) Student defined.--The term `student'
means an individual who during each of 5
calendar months during the calendar year in
which the taxable year of the taxpayer begins--
``(I) is a full-time student at an
educational organization described in
section 170(b)(1)(A)(ii); or
``(II) is pursuing a full-time
course of institutional on-farm
training under the supervision of an
accredited agent of an educational
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