Home > 108th Congressional Bills > S. 2 (rs) To amend the Internal Revenue Code of 1986 to provide additional tax incentives to encourage economic growth. [Reported in Senate] ...S. 2 (rs) To amend the Internal Revenue Code of 1986 to provide additional tax incentives to encourage economic growth. [Reported in Senate] ...
108th CONGRESS
1st Session
S. 2
To amend the Internal Revenue Code of 1986 to provide additional tax
incentives to encourage economic growth.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
February 27, 2003
Mr. Nickles (for himself and Mr. Miller) (by request) introduced the
following bill; which was read twice and referred to the Committee on
Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to provide additional tax
incentives to encourage economic growth.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; REFERENCES; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Jobs and Growth
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.--The table of contents of this Act is as
follows:
Sec. 1. Short title; references; table of contents.
TITLE I--ACCELERATION OF CERTAIN PREVIOUSLY ENACTED TAX REDUCTIONS;
INCREASED EXPENSING FOR SMALL BUSINESSES
Sec. 101. Acceleration of 10-percent individual income tax rate bracket
expansion.
Sec. 102. Acceleration of reduction in individual income tax rates.
Sec. 103. Acceleration of 15-percent individual income tax rate bracket
expansion for married taxpayers filing
joint returns.
Sec. 104. Acceleration of increase in standard deduction for married
taxpayers filing joint returns.
Sec. 105. Acceleration of increase in child tax credit.
Sec. 106. Increased expensing for small business.
Sec. 107. Minimum tax relief to individuals.
Sec. 108. Application of EGTRRA sunset to this title.
TITLE II--DIVIDEND EXCLUSION TO ELIMINATE DOUBLE TAXATION OF CORPORATE
EARNINGS
Sec. 201. Dividend exclusion to eliminate double taxation of corporate
earnings.
Sec. 202. Rules for application of dividend exclusion and retained
earnings basis adjustments.
Sec. 203. Treatment of regulated investment companies and real estate
investment trusts.
Sec. 204. Treatment of insurance companies.
Sec. 205. Treatment of S corporations.
Sec. 206. Repeal of accumulated earnings tax and personal holding
company tax.
Sec. 207. Effective dates.
TITLE I--ACCELERATION OF CERTAIN PREVIOUSLY ENACTED TAX REDUCTIONS;
INCREASED EXPENSING FOR SMALL BUSINESSES
SEC. 101. ACCELERATION OF 10-PERCENT INDIVIDUAL INCOME TAX RATE BRACKET
EXPANSION.
(a) In General.--Clause (i) of section 1(i)(1)(B) (relating to the
initial bracket amount) is amended by striking ``($12,000 in the case
of taxable years beginning before January 1, 2008)''.
(b) Inflation Adjustment Beginning in 2003.--Section 1(i)(1)(C)
(relating to inflation adjustment) is amended to read as follows:
``(C) Inflation adjustment.--In prescribing the
tables under subsection (f) which apply with respect to
taxable years beginning in calendar years after 2002--
``(i) the cost-of-living adjustment used in
making adjustments to the initial bracket
amount shall be determined under subsection
(f)(3) by substituting `2001' for `1992' in
subparagraph (B) thereof, and
``(ii) such adjustment shall not apply to
the amount referred to in subparagraph
(B)(iii).
If any amount after adjustment under the preceding
sentence is not a multiple of $50, such amount shall be
rounded to the next lowest multiple of $50.''.
(c) Effective Date.--
(1) In general.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2002.
(2) Tables for 2003.--The Secretary of the Treasury shall
modify each table which has been prescribed for taxable years
beginning in 2003 and which relates to any amendment made by
this section, section 102, or section 103 to reflect each such
amendment.
SEC. 102. ACCELERATION OF REDUCTION IN INDIVIDUAL INCOME TAX RATES.
(a) In General.--The table in paragraph (2) of section 1(i)
(relating to reductions in rates after June 30, 2001) is amended to
read as follows:
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
``In the case of The corresponding percentages shall be substituted for the following percentages:
taxable years -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
beginning during
calendar year: 28% 31% 36% 39.6%
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2001................. 27.5% 30.5% 35.5% 39.1%
2002................. 27.0% 30.0% 35.0% 38.6%
2003 and thereafter.. 25.0% 28.0% 33.0% 35.0%''.
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2002.
SEC. 103. ACCELERATION OF 15-PERCENT INDIVIDUAL INCOME TAX RATE BRACKET
EXPANSION FOR MARRIED TAXPAYERS FILING JOINT RETURNS.
(a) In General.--Paragraph (8) of section 1(f) (relating to
phaseout of marriage penalty in 15-percent bracket) is amended to read
as follows:
``(8) Elimination of marriage penalty in 15-percent
bracket.--With respect to taxable years beginning after
December 31, 2002, in prescribing the tables under paragraph
(1)--
``(A) the maximum taxable income in the 15 percent
rate bracket in the table contained in subsection (a)
(and the minimum taxable income in the next higher
taxable income bracket in such table) shall be 200
percent of the maximum taxable income in the 15-percent
rate bracket in the table contained in subsection (c)
(after any other adjustment under this subsection), and
``(B) the comparable taxable income amounts in the
table contained in subsection (d) shall be \1/2\ of the
amounts determined under subparagraph (A).''.
(b) Conforming Amendments.--
(1) The heading for subsection (f) of section 1 is amended
by striking ``Phaseout'' and inserting ``Elimination''.
(2) Section 302(c) of the Economic Growth and Tax Relief
Reconciliation Act of 2001 is amended by striking ``2004'' and
inserting ``2002''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2002.
SEC. 104. ACCELERATION OF INCREASE IN STANDARD DEDUCTION FOR MARRIED
TAXPAYERS FILING JOINT RETURNS.
(a) In General.--Paragraph (2) of section 63(c) (relating to basic
standard deduction) is amended to read as follows:
``(2) Basic standard deduction.--For purposes of paragraph
(1), the basic standard deduction is--
``(A) 200 percent of the dollar amount in effect
under subparagraph (C) for the taxable year in the case
of--
``(i) a joint return, or
``(ii) a surviving spouse (as defined in
section 2(a)),
``(B) $4,400 in the case of a head of household (as
defined in section 2(b)), or
``(C) $3,000 in any other case.''.
(b) Conforming Amendments.--
(1) Section 63(c)(4) is amended by striking ``(2)(D)'' each
place it occurs and inserting ``(2)(C)''.
(2) Section 63(c) is amended by striking paragraph (7).
(3) Section 301(d) of the Economic Growth and Tax Relief
Reconciliation Act of 2001 is amended by striking ``2004'' and
inserting ``2002''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2002.
SEC. 105. ACCELERATION OF INCREASE IN CHILD TAX CREDIT.
(a) In General.--Subsection (a) of section 24 (relating to child
tax credit) is amended to read as follows:
``(a) Allowance of Credit.--There shall be allowed as a credit
against the tax imposed by this chapter for the taxable year with
respect to each qualifying child of the taxpayer an amount equal to
$1,000.''.
(b) Advance Payment of Portion of Increased Credit in 2003.--
(1) In general.--Subchapter B of chapter 65 (relating to
abatements, credits, and refunds) is amended by adding at the
end the following new section:
``SEC. 6429. ADVANCE PAYMENT OF PORTION OF INCREASED CHILD CREDIT.
``(a) In General.--Each eligible taxpayer shall be treated as
having made a payment against the tax imposed by chapter 1 for such
taxpayer's first taxable year beginning in 2002 in an amount equal to
the child tax credit refund amount.
``(b) Eligible Taxpayer.--For purposes of this section, the term
`eligible taxpayer' means any taxpayer if--
``(1) such taxpayer was allowed a credit under section 24
for such taxpayer's first taxable year beginning in 2002, and
``(2) at least one qualifying child (as defined in section
24(c)) of the taxpayer for such year meets the age requirement
for 2003.
``(c) Child Tax Credit Refund Amount.--
``(1) In general.--For purposes of this section, the child
tax credit refund amount is equal to the excess (if any) of--
``(A) the amount which would have been allowed as a
credit under section 24 for the taxpayer's first
taxable year beginning in 2002 if--
``(i) the per child amount for such year
were $1,000, and
``(ii) only qualifying children (as defined
in section 24(c)) of the taxpayer for such year
who meet the age requirement for 2003 were
taken into account, over
``(B) the amount which would have been allowed as a
credit under section 24 for the taxpayer's first
taxable year beginning in 2002 if only qualifying
children (as defined in section 24(c)) of the taxpayer
for such year who meet the age requirement for 2003
were taken into account.
``(2) Adjustments.--The amounts described in subparagraphs
(A) and (B) of paragraph (1) shall be determined--
``(A) without regard to section 24(d)(1)(B)(ii),
and
``(B) as if the credit allowed under section 24(d)
were allowed under section 24.
``(d) Age Requirement.--A child of a taxpayer meets the age
requirement for 2003 if such child meets the requirement of section
24(c)(1)(B) for the taxpayer's first taxable year beginning in 2003.
``(e) Timing of Payments.--In the case of any overpayment
attributable to this section, the Secretary shall, subject to the
provisions of this title, refund or credit such overpayment as rapidly
as possible and, to the extent practicable, before December 31, 2003.
``(f) Coordination with Child Tax Credit.--
``(1) In general.--The amount of credit which would (but
for this paragraph) be allowable under section 24 for the
taxpayer's first taxable year beginning in 2003 shall be
reduced (but not below zero) by the aggregate refunds and
credits made or allowed to the taxpayer under this section. Any
failure to so reduce the credit shall be treated as arising out
of a mathematical or clerical error and assessed according to
section 6213(b)(1).
``(2) Joint returns.--In the case of a refund or credit
made or allowed under this section with respect to a joint
return, half of such refund or credit shall be treated as
having been made or allowed to each individual filing such return.
``(g) No Interest.--No interest shall be allowed on any overpayment
attributable to this section.''.
(2) Clerical amendment.--The table of sections for
subchapter B of chapter 65 is amended by adding at the end the
following new item:
``Sec. 6429. Advance payment of portion of increased child
credit.''.
(c) Effective Dates.--
(1) Subsection (a).--The amendment made by subsection (a)
shall apply to taxable years beginning after December 31, 2002.
(2) Subsection (b).--The amendments made by subsection (b)
shall take effect on the date of the enactment of this Act.
SEC. 106. INCREASED EXPENSING FOR SMALL BUSINESS.
(a) In General.--Paragraph (1) of section 179(b) (relating to
dollar limitation) is amended to read as follows:
``(1) Dollar limitation.--The aggregate cost which may be
taken into account under subsection (a) for any taxable year
shall not exceed $75,000.''.
(b) Increase in Qualifying Investment at Which Phaseout Begins.--
Paragraph (2) of section 179(b) (relating to reduction in limitation)
is amended by striking ``$200,000'' and inserting ``$325,000''.
(c) Off-the-Shelf Computer Software.--Paragraph (1) of section
179(d) (defining section 179 property) is amended to read as follows:
``(1) Section 179 property.--For purposes of this section,
the term `section 179 property' means property--
``(A) which is--
``(i) tangible property (to which section
168 applies), or
``(ii) computer software (as defined in
section 197(e)(3)(B)) which is described in
section 197(e)(3)(A)(i) and to which section
167 applies,
``(B) which is section 1245 property (as defined in
section 1245(a)(3)), and
``(C) which is acquired by purchase for use in the
active conduct of a trade or business.
Such term shall not include any property described in section
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