Posted on Dec 2, 2017
Senate Passes Sweeping Republican Tax Overhaul Bill
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The U.S. Senate passed the most sweeping tax rewrite in decades early Saturday morning.
I am very thankful this legislation finally passed after being scrutinized and modified by the U.S. House in conference.
[Update} I posted the text of the bill which retains the 12%, 25%, 35% and 39% tax rates.
`Sec. 24. Child and family tax credit.''.(b) Elimination of Marriage Penalty.--Section 24(b)(2) is amended--
(1) by striking ``$110,000'' in subparagraph (A) and inserting $230,000'',
(2) by inserting ``and'' at the end of subparagraph (A), (3) by striking ``$75,000 in the case of an individual who is not married'' and all that follows through the period at the end and inserting ``one-half of the amount in effect under subparagraph (A) for the taxable year.
"The Senate passed the most sweeping tax rewrite in decades early Saturday, with Republicans lining up to approve an overhaul that will touch almost every corner of the United States economy, affecting families, small business owners and multinational corporations, with the biggest benefits flowing to the highest-earning Americans.
Senators voted 51-49, as Republicans approved the nearly 500-page bill in the early morning hours after lawmakers received a rewritten version, which contained significant changes from the original bill that passed two Senate panels last month along party lines. The last-minute revisions prompted an outcry from Democrats, who said it was impossible — and irresponsible — for lawmakers to read and digest a significant piece of legislation in such a short period of time.
Speaking on the Senate floor ahead of the vote, Senator Chuck Schumer, Democrat of New York and the minority leader, called the Republican approach “a process and a product that no one can be proud of and everyone should be ashamed of.”
He went on to warn that changes made to the bill “under the cover of darkness” would “stuff even more money into the pockets of the wealthy and the biggest corporations while raising taxes on millions in the middle class.”
Many of the changes stemmed from a series of last-minute agreements reached to convince a handful of holdout Republican senators, including Susan Collins of Maine and Ron Johnson of Wisconsin, to throw their support behind the legislation. One of those Republican holdouts, Senator Bob Corker of Tennessee, voted against the legislation."
Update - her is the text of the bill:
"[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1 Placed on Calendar Senate (PCS)]
<DOC>
Calendar No. 266
115th CONGRESS
1st Session
H. R. 1
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
November 27, 2017
Received; read the first time
November 28, 2017
Read the second time and placed on the calendar
_______________________________________________________________________
AN ACT
To provide for reconciliation pursuant to titles II and V of the
concurrent resolution on the budget for fiscal year 2018.
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 ``Tax Cuts and Jobs
Act''.
(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 for this Act is as
follows:
Sec. 1. Short title; etc.
TITLE I--TAX REFORM FOR INDIVIDUALS
Subtitle A--Simplification and Reform of Rates, Standard Deduction, and
Exemptions
Sec. 1001. Reduction and simplification of individual income tax rates.
Sec. 1002. Enhancement of standard deduction.
Sec. 1003. Repeal of deduction for personal exemptions.
Sec. 1004. Maximum rate on business income of individuals.
Sec. 1005. Conforming amendments related to simplification of
individual income tax rates.
Subtitle B--Simplification and Reform of Family and Individual Tax
Credits
Sec. 1101. Enhancement of child tax credit and new family tax credit.
Sec. 1102. Repeal of nonrefundable credits.
Sec. 1103. Refundable credit program integrity.
Sec. 1104. Procedures to reduce improper claims of earned income
credit.
Sec. 1105. Certain income disallowed for purposes of the earned income
tax credit.
Subtitle C--Simplification and Reform of Education Incentives
Sec. 1201. American opportunity tax credit.
Sec. 1202. Consolidation of education savings rules.
Sec. 1203. Reforms to discharge of certain student loan indebtedness.
Sec. 1204. Repeal of other provisions relating to education.
Sec. 1205. Rollovers between qualified tuition programs and qualified
ABLE programs.
Subtitle D--Simplification and Reform of Deductions
Sec. 1301. Repeal of overall limitation on itemized deductions.
Sec. 1302. Mortgage interest.
Sec. 1303. Repeal of deduction for certain taxes not paid or accrued in
a trade or business.
Sec. 1304. Repeal of deduction for personal casualty losses.
Sec. 1305. Limitation on wagering losses.
Sec. 1306. Charitable contributions.
Sec. 1307. Repeal of deduction for tax preparation expenses.
Sec. 1308. Repeal of medical expense deduction.
Sec. 1309. Repeal of deduction for alimony payments.
Sec. 1310. Repeal of deduction for moving expenses.
Sec. 1311. Termination of deduction and exclusions for contributions to
medical savings accounts.
Sec. 1312. Denial of deduction for expenses attributable to the trade
or business of being an employee.
Subtitle E--Simplification and Reform of Exclusions and Taxable
Compensation
Sec. 1401. Limitation on exclusion for employer-provided housing.
Sec. 1402. Exclusion of gain from sale of a principal residence.
Sec. 1403. Repeal of exclusion, etc., for employee achievement awards.
Sec. 1404. Sunset of exclusion for dependent care assistance programs.
Sec. 1405. Repeal of exclusion for qualified moving expense
reimbursement.
Sec. 1406. Repeal of exclusion for adoption assistance programs.
Subtitle F--Simplification and Reform of Savings, Pensions, Retirement
Sec. 1501. Repeal of special rule permitting recharacterization of Roth
IRA contributions as traditional IRA
contributions.
Sec. 1502. Reduction in minimum age for allowable in-service
distributions.
Sec. 1503. Modification of rules governing hardship distributions.
Sec. 1504. Modification of rules relating to hardship withdrawals from
cash or deferred arrangements.
Sec. 1505. Extended rollover period for the rollover of plan loan
offset amounts in certain cases.
Sec. 1506. Modification of nondiscrimination rules to protect older,
longer service participants.
Subtitle G--Estate, Gift, and Generation-skipping Transfer Taxes
Sec. 1601. Increase in credit against estate, gift, and generation-
skipping transfer tax.
Sec. 1602. Repeal of estate and generation-skipping transfer taxes.
TITLE II--ALTERNATIVE MINIMUM TAX REPEAL
Sec. 2001. Repeal of alternative minimum tax.
TITLE III--BUSINESS TAX REFORM
Subtitle A--Tax Rates
Sec. 3001. Reduction in corporate tax rate.
Subtitle B--Cost Recovery
Sec. 3101. Increased expensing.
Subtitle C--Small Business Reforms
Sec. 3201. Expansion of section 179 expensing.
Sec. 3202. Small business accounting method reform and simplification.
Sec. 3203. Small business exception from limitation on deduction of
business interest.
Sec. 3204. Modification of treatment of S corporation conversions to C
corporations.
Subtitle D--Reform of Business-related Exclusions, Deductions, etc.
Sec. 3301. Interest.
Sec. 3302. Modification of net operating loss deduction.
Sec. 3303. Like-kind exchanges of real property.
Sec. 3304. Revision of treatment of contributions to capital.
Sec. 3305. Repeal of deduction for local lobbying expenses.
Sec. 3306. Repeal of deduction for income attributable to domestic
production activities.
Sec. 3307. Entertainment, etc. expenses.
Sec. 3308. Unrelated business taxable income increased by amount of
certain fringe benefit expenses for which
deduction is disallowed.
Sec. 3309. Limitation on deduction for FDIC premiums.
Sec. 3310. Repeal of rollover of publicly traded securities gain into
specialized small business investment
companies.
Sec. 3311. Certain self-created property not treated as a capital
asset.
Sec. 3312. Repeal of special rule for sale or exchange of patents.
Sec. 3313. Repeal of technical termination of partnerships.
Sec. 3314. Recharacterization of certain gains in the case of
partnership profits interests held in
connection with performance of investment
services.
Sec. 3315. Amortization of research and experimental expenditures.
Sec. 3316. Uniform treatment of expenses in contingency fee cases.
Subtitle E--Reform of Business Credits
Sec. 3401. Repeal of credit for clinical testing expenses for certain
drugs for rare diseases or conditions.
Sec. 3402. Repeal of employer-provided child care credit.
Sec. 3403. Repeal of rehabilitation credit.
Sec. 3404. Repeal of work opportunity tax credit.
Sec. 3405. Repeal of deduction for certain unused business credits.
Sec. 3406. Termination of new markets tax credit.
Sec. 3407. Repeal of credit for expenditures to provide access to
disabled individuals.
Sec. 3408. Modification of credit for portion of employer social
security taxes paid with respect to
employee tips.
Subtitle F--Energy Credits
Sec. 3501. Modifications to credit for electricity produced from
certain renewable resources.
Sec. 3502. Modification of the energy investment tax credit.
Sec. 3503. Extension and phaseout of residential energy efficient
property.
Sec. 3504. Repeal of enhanced oil recovery credit.
Sec. 3505. Repeal of credit for producing oil and gas from marginal
wells.
Sec. 3506. Modifications of credit for production from advanced nuclear
power facilities.
Subtitle G--Bond Reforms
Sec. 3601. Termination of private activity bonds.
Sec. 3602. Repeal of advance refunding bonds.
Sec. 3603. Repeal of tax credit bonds.
Sec. 3604. No tax exempt bonds for professional stadiums.
Subtitle H--Insurance
Sec. 3701. Net operating losses of life insurance companies.
Sec. 3702. Repeal of small life insurance company deduction.
Sec. 3703. Surtax on life insurance company taxable income.
Sec. 3704. Adjustment for change in computing reserves.
Sec. 3705. Repeal of special rule for distributions to shareholders
from pre-1984 policyholders surplus
account.
Sec. 3706. Modification of proration rules for property and casualty
insurance companies.
Sec. 3707. Modification of discounting rules for property and casualty
insurance companies.
Sec. 3708. Repeal of special estimated tax payments.
Subtitle I--Compensation
Sec. 3801. Modification of limitation on excessive employee
remuneration.
Sec. 3802. Excise tax on excess tax-exempt organization executive
compensation.
Sec. 3803. Treatment of qualified equity grants.
TITLE IV--TAXATION OF FOREIGN INCOME AND FOREIGN PERSONS
Subtitle A--Establishment of Participation Exemption System for
Taxation of Foreign Income
Sec. 4001. Deduction for foreign-source portion of dividends received
by domestic corporations from specified 10-
percent owned foreign corporations.
Sec. 4002. Application of participation exemption to investments in
United States property.
Sec. 4003. Limitation on losses with respect to specified 10-percent
owned foreign corporations.
Sec. 4004. Treatment of deferred foreign income upon transition to
participation exemption system of taxation.
Subtitle B--Modifications Related to Foreign Tax Credit System
Sec. 4101. Repeal of section 902 indirect foreign tax credits;
determination of section 960 credit on
current year basis.
Sec. 4102. Source of income from sales of inventory determined solely
on basis of production activities.
Subtitle C--Modification of Subpart F Provisions
Sec. 4201. Repeal of inclusion based on withdrawal of previously
excluded subpart F income from qualified
investment.
Sec. 4202. Repeal of treatment of foreign base company oil related
income as subpart F income.
Sec. 4203. Inflation adjustment of de minimis exception for foreign
base company income.
Sec. 4204. Look-thru rule for related controlled foreign corporations
made permanent.
Sec. 4205. Modification of stock attribution rules for determining
status as a controlled foreign corporation.
Sec. 4206. Elimination of requirement that corporation must be
controlled for 30 days before subpart F
inclusions apply.
Subtitle D--Prevention of Base Erosion
Sec. 4301. Current year inclusion by United States shareholders with
foreign high returns.
Sec. 4302. Limitation on deduction of interest by domestic corporations
which are members of an international
financial reporting group.
Sec. 4303. Excise tax on certain payments from domestic corporations to
related foreign corporations; election to
treat such payments as effectively
connected income.
Subtitle E--Provisions Related to Possessions of the United States
Sec. 4401. Extension of deduction allowable with respect to income
attributable to domestic production
activities in Puerto Rico.
Sec. 4402. Extension of temporary increase in limit on cover over of
rum excise taxes to Puerto Rico and the
Virgin Islands.
Sec. 4403. Extension of American Samoa economic development credit.
Subtitle F--Other International Reforms
Sec. 4501. Restriction on insurance business exception to passive
foreign investment company rules.
TITLE V--EXEMPT ORGANIZATIONS
Subtitle A--Unrelated Business Income Tax
Sec. 5001. Clarification of unrelated business income tax treatment of
entities treated as exempt from taxation
under section 501(a).
Sec. 5002. Exclusion of research income limited to publicly available
research.
Subtitle B--Excise Taxes
Sec. 5101. Simplification of excise tax on private foundation
investment income.
Sec. 5102. Private operating foundation requirements relating to
operation of art museum.
Sec. 5103. Excise tax based on investment income of private colleges
and universities.
Sec. 5104. Exception from private foundation excess business holding
tax for independently-operated
philanthropic business holdings.
Subtitle C--Requirements for Organizations Exempt From Tax
Sec. 5201. 501(c)(3) organizations permitted to make statements
relating to political campaign in ordinary
course of activities.
Sec. 5202. Additional reporting requirements for donor advised fund
sponsoring organizations.
TITLE I--TAX REFORM FOR INDIVIDUALS
Subtitle A--Simplification and Reform of Rates, Standard Deduction, and
Exemptions
SEC. 1001. REDUCTION AND SIMPLIFICATION OF INDIVIDUAL INCOME TAX RATES.
(a) In General.--Section 1 is amended by striking subsection (i)
and by striking all that precedes subsection (h) and inserting the
following:
``SEC. 1. TAX IMPOSED.
``(a) In General.--There is hereby imposed on the income of every individual a tax equal to the sum of--
``(1) 12 percent bracket.--12 percent of so much of the taxable income as does not exceed the 25-percent bracket threshold amount,
``(2) 25 percent bracket.--25 percent of so much of the taxable income as exceeds the 25-percent bracket threshold amount but does not exceed the 35-percent bracket threshold
amount, plus
``(3) 35 percent bracket.--35 percent of so much of taxable income as exceeds the 35-percent bracket threshold amount but does not exceed the 39.6 percent bracket threshold amount.
``(4) 39.6 percent bracket.--39.6 percent of so much of taxable income as exceeds the 39.6-percent bracket threshold amount.
``(b) Bracket Threshold Amounts.--For purposes of this section--
``(1) 25-percent bracket threshold amount.--The term `25-
percent bracket threshold amount' means--
``(A) in the case of a joint return or surviving
spouse, $90,000,
``(B) in the case of an individual who is the head
of a household (as defined in section 2(b)), $67,500,
``(C) in the case of any other individual (other
than an estate or trust), an amount equal to \1/2\ of
the amount in effect for the taxable year under
subparagraph (A), and
``(D) in the case of an estate or trust, $2,550.
``(2) 35-percent bracket threshold amount.--The term `35-
percent bracket threshold amount' means--
``(A) in the case of a joint return or surviving
spouse, $260,000,
``(B) in the case of a married individual filing a
separate return, an amount equal to \1/2\ of the amount
in effect for the taxable year under subparagraph (A),
and
``(C) in the case of any other individual (other
than an estate or trust), $200,000, and
``(D) in the case of an estate or trust, $9,150.
``(3) 39.6-percent bracket threshold amount.--The term
`39.6-percent bracket threshold amount' means--
``(A) in the case of a joint return or surviving
spouse, $1,000,000,
``(B) in the case of any other individual (other
than an estate or trust), an amount equal to \1/2\ of
the amount in effect for the taxable year under
subparagraph (A), and
``(C) in the case of an estate or trust, $12,500.
``(c) Inflation Adjustment.--
``(1) In general.--In the case of any taxable year
beginning after 2018, each dollar amount in subsections (b) and
(e)(3) (other than any amount determined by reference to such a
dollar amount) shall be increased by an amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined
under this subsection for the calendar year in which
the taxable year begins by substituting `2017' for
`2016' in paragraph (2)(A)(ii).
If any increase determined under the preceding sentence is not
a multiple of $100, such increase shall be rounded to the next
lowest multiple of $100.
``(2) Cost-of-living adjustment.--For purposes of this
subsection--
``(A) In general.--The cost-of-living adjustment
for any calendar year is the percentage (if any) by
which--
``(i) the C-CPI-U for the preceding
calendar year, exceeds
``(ii) the normalized CPI for calendar year
2016.
``(B) Special rule for adjustments with a base year
after 2016.--For purposes of any provision which
provides for the substitution of a year after 2016 for
`2016' in subparagraph (A)(ii), subparagraph (A) shall
be applied by substituting `C-CPI-U' for `normalized
CPI' in clause (ii).
``(3) Normalized cpi.--For purposes of this subsection, the
normalized CPI for any calendar year is the product of--
``(A) the CPI for such calendar year, multiplied by
``(B) the C-CPI-U transition multiple.
``(4) C-CPI-U transition multiple.--For purposes of this
subsection, the term `C-CPI-U transition multiple' means the
amount obtained by dividing--
``(A) the C-CPI-U for calendar year 2016, by
``(B) the CPI for calendar year 2016.
``(5) C-CPI-U.--For purposes of this subsection--
``(A) In general.--The term `C-CPI-U' means the
Chained Consumer Price Index for All Urban Consumers
(as published by the Bureau of Labor Statistics of the
Department of Labor). The values of the Chained
Consumer Price Index for All Urban Consumers taken into
account for purposes of determining the cost-of-living
adjustment for any calendar year under this subsection
shall be the latest values so published as of the date
on which such Bureau publishes the initial value of the
Chained Consumer Price Index for All Urban Consumers
for the month of August for the preceding calendar
year.
``(B) Determination for calendar year.--The C-CPI-U
for any calendar year is the average of the C-CPI-U as
of the close of the 12-month period ending on August 31
of such calendar year.
``(6) CPI.--For purposes of this subsection--
``(A) In general.--The term `Consumer Price Index'
means the last Consumer Price Index for All Urban
Consumers published by the Department of Labor. For
purposes of the preceding sentence, the revision of the
Consumer Price Index which is most consistent with the
Consumer Price Index for calendar year 1986 shall be
used.
``(B) Determination for calendar year.--The CPI for
any calendar year is the average of the Consumer Price
Index as of the close of the 12-month period ending on
August 31 of such calendar year.
``(d) Special Rules for Certain Children With Unearned Income.--
``(1) In general.--In the case of any child to whom this
subsection applies for any taxable year--
``(A) the 25-percent bracket threshold amount shall
not be more than the taxable income of such child for
the taxable year reduced by the net unearned income of
such child, and
``(B) the 35-percent bracket threshold amount shall
not be more than the sum of--
``(i) the taxable income of such child for
the taxable year reduced by the net unearned
income of such child, plus
``(ii) the dollar amount in effect under
subsection (b)(2)(D) for the taxable year.
``(C) the 39.6-percent bracket threshold amount
shall not be more than the sum of--
``(i) the taxable income of such child for
the taxable year reduced by the net unearned
income of such child, plus
``(ii) the dollar amount in effect under
subsection (b)(3)(C).
``(2) Child to whom subsection applies.--This subsection
shall apply to any child for any taxable year if--
``(A) such child--
``(i) has not attained age 18 before the
close of the taxable year, or
``(ii) has attained age 18 before the close
of the taxable year and is described in
paragraph (3),
``(B) either parent of such child is alive at the
close of the taxable year, and
``(C) such child does not file a joint return for
the taxable year.
``(3) Certain children whose earned income does not exceed
one-half of individual's support.--A child is described in this
paragraph if--
``(A) such child--
``(i) has not attained age 19 before the
close of the taxable year, or
``(ii) is a student (within the meaning of
section 7706(f)(2)) who has not attained age 24
before the close of the taxable year, and
``(B) such child's earned income (as defined in
section 911(d)(2)) for such taxable year does not
exceed one-half of the amount of the individual's
support (within the meaning of section 7706(c)(1)(D)
after the application of section 7706(f)(5) (without
regard to subparagraph (A) thereof)) for such taxable
year.
``(4) Net unearned income.--For purposes of this
subsection--
``(A) In general.--The term `net unearned income'
means the excess of--
``(i) the portion of the adjusted gross
income for the taxable year which is not
attributable to earned income (as defined in
section 911(d)(2)), over
``(ii) the sum of--
``(I) the amount in effect for the
taxable year under section 63(c)(2)(A)
(relating to limitation on standard
deduction in the case of certain
dependents), plus
``(II) The greater of the amount
described in subclause (I) or, if the
child itemizes his deductions for the
taxable year, the amount of the
itemized deductions allowed by this
chapter for the taxable year which are
directly connected with the production
of the portion of adjusted gross income
referred to in clause (i).
``(B) Limitation based on taxable income.--The
amount of the net unearned income for any taxable year
shall not exceed the individual's taxable income for
such taxable year.
``(e) Phaseout of 12-percent Rate.--
``(1) In general.--The amount of tax imposed by this
section (determined without regard to this subsection) shall be
increased by 6 percent of the excess (if any) of--
``(A) adjusted gross income, over
``(B) the applicable dollar amount.
``(2) Limitation.--The increase determined under paragraph
(1) with respect to any taxpayer for any taxable year shall not
exceed 27.6 percent of the lesser of--
``(A) the taxpayer's taxable income for such
taxable year, or
``(B) the 25-percent bracket threshold amount in
effect with respect to the taxpayer for such taxable
year.
``(3) Applicable dollar amount.--For purposes of this
subsection, the term `applicable dollar amount' means--
``(A) in the case of a joint return or a surviving
spouse, $1,200,000,
``(B) in the case of a married individual filing a
separate return, an amount equal to \1/2\ of the amount
in effect for the taxable year under subparagraph (A),
and
``(C) in the case of any other individual,
$1,000,000.
``(4) Estates and trusts.--Paragraph (1) shall not apply in
the case of an estate or trust.''.
(b) Application of Current Income Tax Brackets to Capital Gains
Brackets.--
(1) In general.--
(A) 0-percent capital gains bracket.--Section
1(h)(1) is amended by striking ``which would (without
regard to this paragraph) be taxed at a rate below 25
percent'' in subparagraph (B)(i) and inserting ``below
the 15-percent rate threshold''.
(B) 15-percent capital gains bracket.--Section 1(h)(1)(C)(ii)(I) is amended by striking `which
would (without regard to this paragraph) be taxed at a rate below 39.6 percent'' and inserting
``below the 20-percent rate threshold''.
(2) Rate thresholds defined.--Section 1(h) is amended by adding at the end the following new paragraph:
``(12) Rate thresholds defined.--For purposes of this subsection--
``(A) 15-percent rate threshold.--The 15-percent rate threshold shall be--
``(i) in the case of a joint return or surviving spouse, $77,200 (\1/2\ such amount in
the case of a married individual filing a separate return),
``(ii) in the case of an individual who is the head of a household (as defined in section
2(b)), $51,700,
``(iii) in the case of any other individual (other than an estate or trust), an amount
equal to \1/2\ of the amount in effect for the taxable year under clause (i), and
``(iv) in the case of an estate or trust, $2,600.
``(B) 20-percent rate threshold.--The 20-percent
rate threshold shall be--
``(i) in the case of a joint return or surviving spouse, $479,000 (\1/2\ such amount
in the case of a married individual filing a separate return),
``(ii) in the case of an individual who is the head of a household (as defined in section
2(b)), $452,400,
``(iii) in the case of any other individual (other than an estate or trust), $425,800, and
``(iv) in the case of an estate or trust, $12,700.
``(C) Inflation adjustment.--In the case of any
taxable year beginning after 2018, each of the dollar
amounts in subparagraphs (A) and (B) shall be increased
by an amount equal to--
``(i) such dollar amount, multiplied by
``(ii) the cost-of-living adjustment
determined under subsection (c)(2)(A) for the
calendar year in which the taxable year begins,
determined by substituting `calendar year 2017'
for `calendar year 2016' in clause (ii)
thereof.''.
(c) Application of Section 15.--
(1) In general.--Subsection (a) of section 15 is amended by
striking ``by this chapter'' and inserting ``by section 11 (or
by reference to any such rates)''.
(2) Conforming amendments.--
(A) Section 15 is amended by striking subsections
(d) and (f) and by redesignating subsection (e) as
subsection (d).
(B) Section 15(d), as redesignated by subparagraph
(A), is amended by striking ``section 1 or 11(b)'' and
inserting ``section 11(b)''.
(C) Section 6013(c) is amended by striking
``sections 15, 443, and 7851(a)(1)(A)'' and inserting
``sections 443 and 7851(a)(1)(A)''.
(3) Application to this act.--Section 15 of the Internal
Revenue Code of 1986 shall not apply to any change in a rate of
tax imposed by chapter 1 of such Code which occurs by reason of
any amendment made by this Act (other than the amendments made
by section 3001).
(d) Effective Date.--
(1) In general.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2017.
(2) Subsection (c).--The amendments made by subsection (c)
shall take effect on the date of the enactment of this Act.
SEC. 1002. ENHANCEMENT OF STANDARD DEDUCTION.
(a) Increase in Standard Deduction.--Section 63(c) is amended to
read as follows:
``(c) Standard Deduction.--For purposes of this subtitle--
``(1) In general.--Except as otherwise provided in this
subsection, the term `standard deduction' means--
``(A) $24,400, in the case of a joint return (or a
surviving spouse (as defined in section 2(a)),
``(B) three-quarters of the amount in effect under
subparagraph (A) for the taxable year, in the case of
the head of a household (as defined in section 2(b)),
and
``(C) one-half of the amount in effect under
subparagraph (A) for the taxable year, in any other
case.
``(2) Limitation on standard deduction in the case of
certain dependents.--In the case of an individual who is a
dependent of another taxpayer for a taxable year beginning in
the calendar year in which the individual's taxable year
begins, the standard deduction applicable to such individual
for such individual's taxable year shall not exceed the greater
of--
``(A) $500, or
``(B) the sum of $250 and such individual's earned
income (within the means of section 32).
``(3) Certain individuals, etc., not eligible for standard
deduction.--In the case of--
``(A) a married individual filing a separate return
where either spouse itemizes deductions,
``(B) a nonresident alien individual,
``(C) an individual making a return under section
443(a)(1) for a period of less than 12 months on
account of a change in his annual accounting period, or
``(D) an estate or trust, common trust fund, or
partnership,
the standard deduction shall be zero.
``(4) Unmarried individual.--For purposes of this section,
the term `unmarried individual' means any individual who--
``(A) is not married as of the close of the taxable
year (as determined by applying section 7703),
``(B) is not a surviving spouse (as defined in
section 2(a)) for the taxable year, and
``(C) is not a dependent of another taxpayer for a
taxable year beginning in the calendar year in which
the individual's taxable year begins.
``(5) Inflation adjustments.--
``(A) Standard deduction amount.--In the case of
any taxable year beginning after 2019, the dollar
amount in paragraph (1)(A) shall be increased by an
amount equal to--
``(i) such dollar amount, multiplied by
``(ii) the cost-of-living adjustment
determined under section 1(c)(2)(A) for the
calendar year in which the taxable year begins,
determined by substituting `calendar year 2018'
for `calendar year 2016' in clause (ii)
thereof.
``(B) Limitation amount in case of certain
dependents.--In the case of any taxable year beginning
after 2017, each of the dollar amounts in paragraph (2)
shall be increased by an amount equal to--
``(i) such dollar amount, multiplied by
``(ii)(I) in the case of the dollar amount
in paragraph (2)(A), under section 1(c)(2)(A)
for the calendar year in which the taxable year
begins determined by substituting `calendar
year 1987' for `calendar year 2016' in clause
(ii) thereof, and
``(II) in the case of the dollar amount in
paragraph (2)(B), under section 1(c)(2)(A) for
the calendar year in which the taxable year
begins determined by substituting `calendar
year 1997' for `calendar year 2016' in clause
(ii) thereof.
If any increase determined under this paragraph is not a
multiple of $100, such increase shall be rounded to the next
lowest multiple of $100.''.
(b) Conforming Amendments.--
(1) Section 63(b) is amended by striking ``, minus--'' and
all that follows and inserting ``minus the standard
deduction''.
(2) Section 63 is amended by striking subsections (f) and
(g).
(3) Section 1398(c) is amended--
(A) by striking ``Basic'' in the heading thereof,
(B) by striking ``Basic standard'' in the heading
of paragraph (3) and inserting ``Standard'', and
(C) by striking ``basic'' in paragraph (3).
(4) Section 3402(m)(3) is amended by striking ``(including the additional standard deduction under section 63(c)(3) for the aged and blind)''.
(5) Section 6014(b)(4) is amended by striking ``section 63(c)(5)'' and inserting ``section 63(c) (2)''.
(c) Effective Date.--The amendment made by this section shall apply to taxable years beginning after December 31, 2017.
SEC. 1003. REPEAL OF DEDUCTION FOR PERSONAL EXEMPTIONS.
(a) In General.--Part V of subchapter B of chapter 1 is hereby repealed.
(b) Definition of Dependent Retained.--Section 152, prior to repeal by subsection (a), is hereby redesignated as section 7706 and moved to the end of chapter 79.
(c) Application to Estates and Trusts.--Subsection (b) of section 642 is amended--
(1) by striking paragraph (2)(C),
(2) by striking paragraph (3), and
(3) by striking ``Deduction for Personal Exemption'' in the
heading thereof and inserting ``Basic Deduction''.
(d) Application to Nonresident Aliens.--Section 873(b) is amended by striking paragraph (3).
(e) Modification of Wage Withholding Rules.--
(1) In general.--Section 3402(a) is amended by striking
paragraph (2).
(2) Conforming amendment.--Section 3402(a) is amended--
(A) by redesignating subparagraphs (A) and (B) of
paragraph (1) as paragraphs (1) and (2) and moving such
redesignated paragraphs 2 ems to the left, and
(B) by striking all that precedes ``otherwise
provided in this section'' and inserting the following:
``(a) Requirement of Withholding.--Except as''.
(3) Number of exemptions.--Section 3402(f)(1) is amended--
(A) in subparagraph (A), by striking ``an
individual described in section 151(d)(2)'' and
inserting ``a dependent of any other taxpayer'', and
(B) in subparagraph (C), by striking ``with respect
to whom, on the basis of facts existing at the
beginning of such day, there may reasonably be expected
to be allowable an exemption under section 151(c)'' and
inserting ``who, on the basis of facts existing at the
beginning of such day, is reasonably expected to be a
dependent of the employee''.
(f) Modification of Return Requirement.--
(1) In general.--Paragraph (1) of section 6012(a) is
amended to read as follows:
``(1) Every individual who has gross income for the taxable
year, except that a return shall not be required of--
``(A) an individual who is not married (determined
by applying section 7703) and who has gross income for
the taxable year which does not exceed the standard
deduction applicable to such individual for such
taxable year under section 63, or
``(B) an individual entitled to make a joint return if--
``(i) the gross income of such individual, when combined with the gross income of
such individual's spouse, for the taxable year does
not exceed the standard deduction which would
be applicable to the taxpayer for such taxable
year under section 63 if such individual and
such individual's spouse made a joint return,
``(ii) such individual and such
individual's spouse have the same household as
their home at the close of the taxable year,
``(iii) such individual's spouse does not
make a separate return, and
``(iv) neither such individual nor such
individual's spouse is an individual described
in section 63(c)(2) who has income (other than
earned income) in excess of the amount in
effect under section 63(c)(2)(A).''.
(2) Bankruptcy estates.--Paragraph (8) of section 6012(a)
is amended by striking ``the sum of the exemption amount plus
the basic standard deduction under section 63(c)(2)(D)'' and
inserting ``the standard deduction in effect under section
63(c)(1)(B)''.
(g) Conforming Amendments.--
(1) Section 2(a)(1)(B) is amended by striking ``a
dependent'' and all that follows through ``section 151'' and
inserting ``a dependent who (within the meaning of section
7706, determined without regard to subsections (b)(1), (b)(2)
and (d)(1)(B) thereof) is a son, stepson, daughter, or
stepdaughter of the taxpayer''.
(2) Section 36B(b)(2)(A) is amended by striking ``section
152'' and inserting ``section 7706''.
(3) Section 36B(b)(3)(B) is amended by striking ``unless a
deduction is allowed under section 151 for the taxable year
with respect to a dependent'' in the flush matter at the end
and inserting ``unless the taxpayer has a dependent for the
taxable year''.
(4) Section 36B(c)(1)(D) is amended by striking ``with
respect to whom a deduction under section 151 is allowable to
another taxpayer'' and inserting ``who is a dependent of
another taxpayer''.
(5) Section 36B(d)(1) is amended by striking ``equal to the
number of individuals for whom the taxpayer is allowed a
deduction under section 151 (relating to allowance of deduction
for personal exemptions) for the taxable year'' and inserting
``the sum of 1 (2 in the case of a joint return) plus the
number of the taxpayer's dependents for the taxable year''.
(6) Section 36B(e)(1) is amended by striking ``1 or more
individuals for whom a taxpayer is allowed a deduction under
section 151 (relating to allowance of deduction for personal
exemptions) for the taxable year (including the taxpayer or his
spouse)'' and inserting ``1 or more of the taxpayer, the
taxpayer's spouse, or any dependent of the taxpayer''.
(7) Section 42(i)(3)(D)(ii)(I) is amended--
(A) by striking ``section 152'' and inserting
``section 7706'', and
(B) by striking the period at the end and inserting
a comma.
(8) Section 72(t)(2)(D)(i)(III) is amended by striking
``section 152'' and inserting ``section 7706''.
(9) Section 72(t)(7)(A)(iii) is amended by striking
``section 152(f)(1)'' and inserting ``section 7706(f)(1)''.
(10) Section 105(b) is amended--
(A) by striking ``as defined in section 152'' and
inserting ``as defined in section 7706'',
(B) by striking ``section 152(f)(1)'' and inserting
``section 7706(f)(1)'' and
(C) by striking ``section 152(e)'' and inserting
``section 7706(e)''.
(11) Section 105(c)(1) is amended by striking ``section
152'' and inserting ``section 7706''.
(12) Section 125(e)(1)(D) is amended by striking ``section 152'' and inserting ``section 7706''.
(13) Section 132(h)(2)(B) is amended--
(A) by striking ``section 152(f)(1)'' and inserting ``section 7706(f)(1)'', and
(B) by striking ``section 152(e)'' and inserting ``section 7706(e)''.
(14) Section 139D(c)(5) is amended by striking ``section 152'' and inserting ``section 7706''.
(15) Section 162(l)(1)(D) is amended by striking ``section 152(f)(1)'' and inserting ``section 7706(f)(1)''.
(16) Section 170(g)(1) is amended by striking ``section 152'' and inserting ``section 7706''.
(17) Section 170(g)(3) is amended by striking ``section 152(d)(2)'' and inserting ``section 7706(d)(2)''.
(18) Section 172(d) is amended by striking paragraph (3).
(19) Section 220(b)(6) is amended by striking ``with respect to whom a deduction under section 151 is allowable to'' and ins
I am very thankful this legislation finally passed after being scrutinized and modified by the U.S. House in conference.
[Update} I posted the text of the bill which retains the 12%, 25%, 35% and 39% tax rates.
`Sec. 24. Child and family tax credit.''.(b) Elimination of Marriage Penalty.--Section 24(b)(2) is amended--
(1) by striking ``$110,000'' in subparagraph (A) and inserting $230,000'',
(2) by inserting ``and'' at the end of subparagraph (A), (3) by striking ``$75,000 in the case of an individual who is not married'' and all that follows through the period at the end and inserting ``one-half of the amount in effect under subparagraph (A) for the taxable year.
"The Senate passed the most sweeping tax rewrite in decades early Saturday, with Republicans lining up to approve an overhaul that will touch almost every corner of the United States economy, affecting families, small business owners and multinational corporations, with the biggest benefits flowing to the highest-earning Americans.
Senators voted 51-49, as Republicans approved the nearly 500-page bill in the early morning hours after lawmakers received a rewritten version, which contained significant changes from the original bill that passed two Senate panels last month along party lines. The last-minute revisions prompted an outcry from Democrats, who said it was impossible — and irresponsible — for lawmakers to read and digest a significant piece of legislation in such a short period of time.
Speaking on the Senate floor ahead of the vote, Senator Chuck Schumer, Democrat of New York and the minority leader, called the Republican approach “a process and a product that no one can be proud of and everyone should be ashamed of.”
He went on to warn that changes made to the bill “under the cover of darkness” would “stuff even more money into the pockets of the wealthy and the biggest corporations while raising taxes on millions in the middle class.”
Many of the changes stemmed from a series of last-minute agreements reached to convince a handful of holdout Republican senators, including Susan Collins of Maine and Ron Johnson of Wisconsin, to throw their support behind the legislation. One of those Republican holdouts, Senator Bob Corker of Tennessee, voted against the legislation."
Update - her is the text of the bill:
"[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1 Placed on Calendar Senate (PCS)]
<DOC>
Calendar No. 266
115th CONGRESS
1st Session
H. R. 1
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
November 27, 2017
Received; read the first time
November 28, 2017
Read the second time and placed on the calendar
_______________________________________________________________________
AN ACT
To provide for reconciliation pursuant to titles II and V of the
concurrent resolution on the budget for fiscal year 2018.
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 ``Tax Cuts and Jobs
Act''.
(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 for this Act is as
follows:
Sec. 1. Short title; etc.
TITLE I--TAX REFORM FOR INDIVIDUALS
Subtitle A--Simplification and Reform of Rates, Standard Deduction, and
Exemptions
Sec. 1001. Reduction and simplification of individual income tax rates.
Sec. 1002. Enhancement of standard deduction.
Sec. 1003. Repeal of deduction for personal exemptions.
Sec. 1004. Maximum rate on business income of individuals.
Sec. 1005. Conforming amendments related to simplification of
individual income tax rates.
Subtitle B--Simplification and Reform of Family and Individual Tax
Credits
Sec. 1101. Enhancement of child tax credit and new family tax credit.
Sec. 1102. Repeal of nonrefundable credits.
Sec. 1103. Refundable credit program integrity.
Sec. 1104. Procedures to reduce improper claims of earned income
credit.
Sec. 1105. Certain income disallowed for purposes of the earned income
tax credit.
Subtitle C--Simplification and Reform of Education Incentives
Sec. 1201. American opportunity tax credit.
Sec. 1202. Consolidation of education savings rules.
Sec. 1203. Reforms to discharge of certain student loan indebtedness.
Sec. 1204. Repeal of other provisions relating to education.
Sec. 1205. Rollovers between qualified tuition programs and qualified
ABLE programs.
Subtitle D--Simplification and Reform of Deductions
Sec. 1301. Repeal of overall limitation on itemized deductions.
Sec. 1302. Mortgage interest.
Sec. 1303. Repeal of deduction for certain taxes not paid or accrued in
a trade or business.
Sec. 1304. Repeal of deduction for personal casualty losses.
Sec. 1305. Limitation on wagering losses.
Sec. 1306. Charitable contributions.
Sec. 1307. Repeal of deduction for tax preparation expenses.
Sec. 1308. Repeal of medical expense deduction.
Sec. 1309. Repeal of deduction for alimony payments.
Sec. 1310. Repeal of deduction for moving expenses.
Sec. 1311. Termination of deduction and exclusions for contributions to
medical savings accounts.
Sec. 1312. Denial of deduction for expenses attributable to the trade
or business of being an employee.
Subtitle E--Simplification and Reform of Exclusions and Taxable
Compensation
Sec. 1401. Limitation on exclusion for employer-provided housing.
Sec. 1402. Exclusion of gain from sale of a principal residence.
Sec. 1403. Repeal of exclusion, etc., for employee achievement awards.
Sec. 1404. Sunset of exclusion for dependent care assistance programs.
Sec. 1405. Repeal of exclusion for qualified moving expense
reimbursement.
Sec. 1406. Repeal of exclusion for adoption assistance programs.
Subtitle F--Simplification and Reform of Savings, Pensions, Retirement
Sec. 1501. Repeal of special rule permitting recharacterization of Roth
IRA contributions as traditional IRA
contributions.
Sec. 1502. Reduction in minimum age for allowable in-service
distributions.
Sec. 1503. Modification of rules governing hardship distributions.
Sec. 1504. Modification of rules relating to hardship withdrawals from
cash or deferred arrangements.
Sec. 1505. Extended rollover period for the rollover of plan loan
offset amounts in certain cases.
Sec. 1506. Modification of nondiscrimination rules to protect older,
longer service participants.
Subtitle G--Estate, Gift, and Generation-skipping Transfer Taxes
Sec. 1601. Increase in credit against estate, gift, and generation-
skipping transfer tax.
Sec. 1602. Repeal of estate and generation-skipping transfer taxes.
TITLE II--ALTERNATIVE MINIMUM TAX REPEAL
Sec. 2001. Repeal of alternative minimum tax.
TITLE III--BUSINESS TAX REFORM
Subtitle A--Tax Rates
Sec. 3001. Reduction in corporate tax rate.
Subtitle B--Cost Recovery
Sec. 3101. Increased expensing.
Subtitle C--Small Business Reforms
Sec. 3201. Expansion of section 179 expensing.
Sec. 3202. Small business accounting method reform and simplification.
Sec. 3203. Small business exception from limitation on deduction of
business interest.
Sec. 3204. Modification of treatment of S corporation conversions to C
corporations.
Subtitle D--Reform of Business-related Exclusions, Deductions, etc.
Sec. 3301. Interest.
Sec. 3302. Modification of net operating loss deduction.
Sec. 3303. Like-kind exchanges of real property.
Sec. 3304. Revision of treatment of contributions to capital.
Sec. 3305. Repeal of deduction for local lobbying expenses.
Sec. 3306. Repeal of deduction for income attributable to domestic
production activities.
Sec. 3307. Entertainment, etc. expenses.
Sec. 3308. Unrelated business taxable income increased by amount of
certain fringe benefit expenses for which
deduction is disallowed.
Sec. 3309. Limitation on deduction for FDIC premiums.
Sec. 3310. Repeal of rollover of publicly traded securities gain into
specialized small business investment
companies.
Sec. 3311. Certain self-created property not treated as a capital
asset.
Sec. 3312. Repeal of special rule for sale or exchange of patents.
Sec. 3313. Repeal of technical termination of partnerships.
Sec. 3314. Recharacterization of certain gains in the case of
partnership profits interests held in
connection with performance of investment
services.
Sec. 3315. Amortization of research and experimental expenditures.
Sec. 3316. Uniform treatment of expenses in contingency fee cases.
Subtitle E--Reform of Business Credits
Sec. 3401. Repeal of credit for clinical testing expenses for certain
drugs for rare diseases or conditions.
Sec. 3402. Repeal of employer-provided child care credit.
Sec. 3403. Repeal of rehabilitation credit.
Sec. 3404. Repeal of work opportunity tax credit.
Sec. 3405. Repeal of deduction for certain unused business credits.
Sec. 3406. Termination of new markets tax credit.
Sec. 3407. Repeal of credit for expenditures to provide access to
disabled individuals.
Sec. 3408. Modification of credit for portion of employer social
security taxes paid with respect to
employee tips.
Subtitle F--Energy Credits
Sec. 3501. Modifications to credit for electricity produced from
certain renewable resources.
Sec. 3502. Modification of the energy investment tax credit.
Sec. 3503. Extension and phaseout of residential energy efficient
property.
Sec. 3504. Repeal of enhanced oil recovery credit.
Sec. 3505. Repeal of credit for producing oil and gas from marginal
wells.
Sec. 3506. Modifications of credit for production from advanced nuclear
power facilities.
Subtitle G--Bond Reforms
Sec. 3601. Termination of private activity bonds.
Sec. 3602. Repeal of advance refunding bonds.
Sec. 3603. Repeal of tax credit bonds.
Sec. 3604. No tax exempt bonds for professional stadiums.
Subtitle H--Insurance
Sec. 3701. Net operating losses of life insurance companies.
Sec. 3702. Repeal of small life insurance company deduction.
Sec. 3703. Surtax on life insurance company taxable income.
Sec. 3704. Adjustment for change in computing reserves.
Sec. 3705. Repeal of special rule for distributions to shareholders
from pre-1984 policyholders surplus
account.
Sec. 3706. Modification of proration rules for property and casualty
insurance companies.
Sec. 3707. Modification of discounting rules for property and casualty
insurance companies.
Sec. 3708. Repeal of special estimated tax payments.
Subtitle I--Compensation
Sec. 3801. Modification of limitation on excessive employee
remuneration.
Sec. 3802. Excise tax on excess tax-exempt organization executive
compensation.
Sec. 3803. Treatment of qualified equity grants.
TITLE IV--TAXATION OF FOREIGN INCOME AND FOREIGN PERSONS
Subtitle A--Establishment of Participation Exemption System for
Taxation of Foreign Income
Sec. 4001. Deduction for foreign-source portion of dividends received
by domestic corporations from specified 10-
percent owned foreign corporations.
Sec. 4002. Application of participation exemption to investments in
United States property.
Sec. 4003. Limitation on losses with respect to specified 10-percent
owned foreign corporations.
Sec. 4004. Treatment of deferred foreign income upon transition to
participation exemption system of taxation.
Subtitle B--Modifications Related to Foreign Tax Credit System
Sec. 4101. Repeal of section 902 indirect foreign tax credits;
determination of section 960 credit on
current year basis.
Sec. 4102. Source of income from sales of inventory determined solely
on basis of production activities.
Subtitle C--Modification of Subpart F Provisions
Sec. 4201. Repeal of inclusion based on withdrawal of previously
excluded subpart F income from qualified
investment.
Sec. 4202. Repeal of treatment of foreign base company oil related
income as subpart F income.
Sec. 4203. Inflation adjustment of de minimis exception for foreign
base company income.
Sec. 4204. Look-thru rule for related controlled foreign corporations
made permanent.
Sec. 4205. Modification of stock attribution rules for determining
status as a controlled foreign corporation.
Sec. 4206. Elimination of requirement that corporation must be
controlled for 30 days before subpart F
inclusions apply.
Subtitle D--Prevention of Base Erosion
Sec. 4301. Current year inclusion by United States shareholders with
foreign high returns.
Sec. 4302. Limitation on deduction of interest by domestic corporations
which are members of an international
financial reporting group.
Sec. 4303. Excise tax on certain payments from domestic corporations to
related foreign corporations; election to
treat such payments as effectively
connected income.
Subtitle E--Provisions Related to Possessions of the United States
Sec. 4401. Extension of deduction allowable with respect to income
attributable to domestic production
activities in Puerto Rico.
Sec. 4402. Extension of temporary increase in limit on cover over of
rum excise taxes to Puerto Rico and the
Virgin Islands.
Sec. 4403. Extension of American Samoa economic development credit.
Subtitle F--Other International Reforms
Sec. 4501. Restriction on insurance business exception to passive
foreign investment company rules.
TITLE V--EXEMPT ORGANIZATIONS
Subtitle A--Unrelated Business Income Tax
Sec. 5001. Clarification of unrelated business income tax treatment of
entities treated as exempt from taxation
under section 501(a).
Sec. 5002. Exclusion of research income limited to publicly available
research.
Subtitle B--Excise Taxes
Sec. 5101. Simplification of excise tax on private foundation
investment income.
Sec. 5102. Private operating foundation requirements relating to
operation of art museum.
Sec. 5103. Excise tax based on investment income of private colleges
and universities.
Sec. 5104. Exception from private foundation excess business holding
tax for independently-operated
philanthropic business holdings.
Subtitle C--Requirements for Organizations Exempt From Tax
Sec. 5201. 501(c)(3) organizations permitted to make statements
relating to political campaign in ordinary
course of activities.
Sec. 5202. Additional reporting requirements for donor advised fund
sponsoring organizations.
TITLE I--TAX REFORM FOR INDIVIDUALS
Subtitle A--Simplification and Reform of Rates, Standard Deduction, and
Exemptions
SEC. 1001. REDUCTION AND SIMPLIFICATION OF INDIVIDUAL INCOME TAX RATES.
(a) In General.--Section 1 is amended by striking subsection (i)
and by striking all that precedes subsection (h) and inserting the
following:
``SEC. 1. TAX IMPOSED.
``(a) In General.--There is hereby imposed on the income of every individual a tax equal to the sum of--
``(1) 12 percent bracket.--12 percent of so much of the taxable income as does not exceed the 25-percent bracket threshold amount,
``(2) 25 percent bracket.--25 percent of so much of the taxable income as exceeds the 25-percent bracket threshold amount but does not exceed the 35-percent bracket threshold
amount, plus
``(3) 35 percent bracket.--35 percent of so much of taxable income as exceeds the 35-percent bracket threshold amount but does not exceed the 39.6 percent bracket threshold amount.
``(4) 39.6 percent bracket.--39.6 percent of so much of taxable income as exceeds the 39.6-percent bracket threshold amount.
``(b) Bracket Threshold Amounts.--For purposes of this section--
``(1) 25-percent bracket threshold amount.--The term `25-
percent bracket threshold amount' means--
``(A) in the case of a joint return or surviving
spouse, $90,000,
``(B) in the case of an individual who is the head
of a household (as defined in section 2(b)), $67,500,
``(C) in the case of any other individual (other
than an estate or trust), an amount equal to \1/2\ of
the amount in effect for the taxable year under
subparagraph (A), and
``(D) in the case of an estate or trust, $2,550.
``(2) 35-percent bracket threshold amount.--The term `35-
percent bracket threshold amount' means--
``(A) in the case of a joint return or surviving
spouse, $260,000,
``(B) in the case of a married individual filing a
separate return, an amount equal to \1/2\ of the amount
in effect for the taxable year under subparagraph (A),
and
``(C) in the case of any other individual (other
than an estate or trust), $200,000, and
``(D) in the case of an estate or trust, $9,150.
``(3) 39.6-percent bracket threshold amount.--The term
`39.6-percent bracket threshold amount' means--
``(A) in the case of a joint return or surviving
spouse, $1,000,000,
``(B) in the case of any other individual (other
than an estate or trust), an amount equal to \1/2\ of
the amount in effect for the taxable year under
subparagraph (A), and
``(C) in the case of an estate or trust, $12,500.
``(c) Inflation Adjustment.--
``(1) In general.--In the case of any taxable year
beginning after 2018, each dollar amount in subsections (b) and
(e)(3) (other than any amount determined by reference to such a
dollar amount) shall be increased by an amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined
under this subsection for the calendar year in which
the taxable year begins by substituting `2017' for
`2016' in paragraph (2)(A)(ii).
If any increase determined under the preceding sentence is not
a multiple of $100, such increase shall be rounded to the next
lowest multiple of $100.
``(2) Cost-of-living adjustment.--For purposes of this
subsection--
``(A) In general.--The cost-of-living adjustment
for any calendar year is the percentage (if any) by
which--
``(i) the C-CPI-U for the preceding
calendar year, exceeds
``(ii) the normalized CPI for calendar year
2016.
``(B) Special rule for adjustments with a base year
after 2016.--For purposes of any provision which
provides for the substitution of a year after 2016 for
`2016' in subparagraph (A)(ii), subparagraph (A) shall
be applied by substituting `C-CPI-U' for `normalized
CPI' in clause (ii).
``(3) Normalized cpi.--For purposes of this subsection, the
normalized CPI for any calendar year is the product of--
``(A) the CPI for such calendar year, multiplied by
``(B) the C-CPI-U transition multiple.
``(4) C-CPI-U transition multiple.--For purposes of this
subsection, the term `C-CPI-U transition multiple' means the
amount obtained by dividing--
``(A) the C-CPI-U for calendar year 2016, by
``(B) the CPI for calendar year 2016.
``(5) C-CPI-U.--For purposes of this subsection--
``(A) In general.--The term `C-CPI-U' means the
Chained Consumer Price Index for All Urban Consumers
(as published by the Bureau of Labor Statistics of the
Department of Labor). The values of the Chained
Consumer Price Index for All Urban Consumers taken into
account for purposes of determining the cost-of-living
adjustment for any calendar year under this subsection
shall be the latest values so published as of the date
on which such Bureau publishes the initial value of the
Chained Consumer Price Index for All Urban Consumers
for the month of August for the preceding calendar
year.
``(B) Determination for calendar year.--The C-CPI-U
for any calendar year is the average of the C-CPI-U as
of the close of the 12-month period ending on August 31
of such calendar year.
``(6) CPI.--For purposes of this subsection--
``(A) In general.--The term `Consumer Price Index'
means the last Consumer Price Index for All Urban
Consumers published by the Department of Labor. For
purposes of the preceding sentence, the revision of the
Consumer Price Index which is most consistent with the
Consumer Price Index for calendar year 1986 shall be
used.
``(B) Determination for calendar year.--The CPI for
any calendar year is the average of the Consumer Price
Index as of the close of the 12-month period ending on
August 31 of such calendar year.
``(d) Special Rules for Certain Children With Unearned Income.--
``(1) In general.--In the case of any child to whom this
subsection applies for any taxable year--
``(A) the 25-percent bracket threshold amount shall
not be more than the taxable income of such child for
the taxable year reduced by the net unearned income of
such child, and
``(B) the 35-percent bracket threshold amount shall
not be more than the sum of--
``(i) the taxable income of such child for
the taxable year reduced by the net unearned
income of such child, plus
``(ii) the dollar amount in effect under
subsection (b)(2)(D) for the taxable year.
``(C) the 39.6-percent bracket threshold amount
shall not be more than the sum of--
``(i) the taxable income of such child for
the taxable year reduced by the net unearned
income of such child, plus
``(ii) the dollar amount in effect under
subsection (b)(3)(C).
``(2) Child to whom subsection applies.--This subsection
shall apply to any child for any taxable year if--
``(A) such child--
``(i) has not attained age 18 before the
close of the taxable year, or
``(ii) has attained age 18 before the close
of the taxable year and is described in
paragraph (3),
``(B) either parent of such child is alive at the
close of the taxable year, and
``(C) such child does not file a joint return for
the taxable year.
``(3) Certain children whose earned income does not exceed
one-half of individual's support.--A child is described in this
paragraph if--
``(A) such child--
``(i) has not attained age 19 before the
close of the taxable year, or
``(ii) is a student (within the meaning of
section 7706(f)(2)) who has not attained age 24
before the close of the taxable year, and
``(B) such child's earned income (as defined in
section 911(d)(2)) for such taxable year does not
exceed one-half of the amount of the individual's
support (within the meaning of section 7706(c)(1)(D)
after the application of section 7706(f)(5) (without
regard to subparagraph (A) thereof)) for such taxable
year.
``(4) Net unearned income.--For purposes of this
subsection--
``(A) In general.--The term `net unearned income'
means the excess of--
``(i) the portion of the adjusted gross
income for the taxable year which is not
attributable to earned income (as defined in
section 911(d)(2)), over
``(ii) the sum of--
``(I) the amount in effect for the
taxable year under section 63(c)(2)(A)
(relating to limitation on standard
deduction in the case of certain
dependents), plus
``(II) The greater of the amount
described in subclause (I) or, if the
child itemizes his deductions for the
taxable year, the amount of the
itemized deductions allowed by this
chapter for the taxable year which are
directly connected with the production
of the portion of adjusted gross income
referred to in clause (i).
``(B) Limitation based on taxable income.--The
amount of the net unearned income for any taxable year
shall not exceed the individual's taxable income for
such taxable year.
``(e) Phaseout of 12-percent Rate.--
``(1) In general.--The amount of tax imposed by this
section (determined without regard to this subsection) shall be
increased by 6 percent of the excess (if any) of--
``(A) adjusted gross income, over
``(B) the applicable dollar amount.
``(2) Limitation.--The increase determined under paragraph
(1) with respect to any taxpayer for any taxable year shall not
exceed 27.6 percent of the lesser of--
``(A) the taxpayer's taxable income for such
taxable year, or
``(B) the 25-percent bracket threshold amount in
effect with respect to the taxpayer for such taxable
year.
``(3) Applicable dollar amount.--For purposes of this
subsection, the term `applicable dollar amount' means--
``(A) in the case of a joint return or a surviving
spouse, $1,200,000,
``(B) in the case of a married individual filing a
separate return, an amount equal to \1/2\ of the amount
in effect for the taxable year under subparagraph (A),
and
``(C) in the case of any other individual,
$1,000,000.
``(4) Estates and trusts.--Paragraph (1) shall not apply in
the case of an estate or trust.''.
(b) Application of Current Income Tax Brackets to Capital Gains
Brackets.--
(1) In general.--
(A) 0-percent capital gains bracket.--Section
1(h)(1) is amended by striking ``which would (without
regard to this paragraph) be taxed at a rate below 25
percent'' in subparagraph (B)(i) and inserting ``below
the 15-percent rate threshold''.
(B) 15-percent capital gains bracket.--Section 1(h)(1)(C)(ii)(I) is amended by striking `which
would (without regard to this paragraph) be taxed at a rate below 39.6 percent'' and inserting
``below the 20-percent rate threshold''.
(2) Rate thresholds defined.--Section 1(h) is amended by adding at the end the following new paragraph:
``(12) Rate thresholds defined.--For purposes of this subsection--
``(A) 15-percent rate threshold.--The 15-percent rate threshold shall be--
``(i) in the case of a joint return or surviving spouse, $77,200 (\1/2\ such amount in
the case of a married individual filing a separate return),
``(ii) in the case of an individual who is the head of a household (as defined in section
2(b)), $51,700,
``(iii) in the case of any other individual (other than an estate or trust), an amount
equal to \1/2\ of the amount in effect for the taxable year under clause (i), and
``(iv) in the case of an estate or trust, $2,600.
``(B) 20-percent rate threshold.--The 20-percent
rate threshold shall be--
``(i) in the case of a joint return or surviving spouse, $479,000 (\1/2\ such amount
in the case of a married individual filing a separate return),
``(ii) in the case of an individual who is the head of a household (as defined in section
2(b)), $452,400,
``(iii) in the case of any other individual (other than an estate or trust), $425,800, and
``(iv) in the case of an estate or trust, $12,700.
``(C) Inflation adjustment.--In the case of any
taxable year beginning after 2018, each of the dollar
amounts in subparagraphs (A) and (B) shall be increased
by an amount equal to--
``(i) such dollar amount, multiplied by
``(ii) the cost-of-living adjustment
determined under subsection (c)(2)(A) for the
calendar year in which the taxable year begins,
determined by substituting `calendar year 2017'
for `calendar year 2016' in clause (ii)
thereof.''.
(c) Application of Section 15.--
(1) In general.--Subsection (a) of section 15 is amended by
striking ``by this chapter'' and inserting ``by section 11 (or
by reference to any such rates)''.
(2) Conforming amendments.--
(A) Section 15 is amended by striking subsections
(d) and (f) and by redesignating subsection (e) as
subsection (d).
(B) Section 15(d), as redesignated by subparagraph
(A), is amended by striking ``section 1 or 11(b)'' and
inserting ``section 11(b)''.
(C) Section 6013(c) is amended by striking
``sections 15, 443, and 7851(a)(1)(A)'' and inserting
``sections 443 and 7851(a)(1)(A)''.
(3) Application to this act.--Section 15 of the Internal
Revenue Code of 1986 shall not apply to any change in a rate of
tax imposed by chapter 1 of such Code which occurs by reason of
any amendment made by this Act (other than the amendments made
by section 3001).
(d) Effective Date.--
(1) In general.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2017.
(2) Subsection (c).--The amendments made by subsection (c)
shall take effect on the date of the enactment of this Act.
SEC. 1002. ENHANCEMENT OF STANDARD DEDUCTION.
(a) Increase in Standard Deduction.--Section 63(c) is amended to
read as follows:
``(c) Standard Deduction.--For purposes of this subtitle--
``(1) In general.--Except as otherwise provided in this
subsection, the term `standard deduction' means--
``(A) $24,400, in the case of a joint return (or a
surviving spouse (as defined in section 2(a)),
``(B) three-quarters of the amount in effect under
subparagraph (A) for the taxable year, in the case of
the head of a household (as defined in section 2(b)),
and
``(C) one-half of the amount in effect under
subparagraph (A) for the taxable year, in any other
case.
``(2) Limitation on standard deduction in the case of
certain dependents.--In the case of an individual who is a
dependent of another taxpayer for a taxable year beginning in
the calendar year in which the individual's taxable year
begins, the standard deduction applicable to such individual
for such individual's taxable year shall not exceed the greater
of--
``(A) $500, or
``(B) the sum of $250 and such individual's earned
income (within the means of section 32).
``(3) Certain individuals, etc., not eligible for standard
deduction.--In the case of--
``(A) a married individual filing a separate return
where either spouse itemizes deductions,
``(B) a nonresident alien individual,
``(C) an individual making a return under section
443(a)(1) for a period of less than 12 months on
account of a change in his annual accounting period, or
``(D) an estate or trust, common trust fund, or
partnership,
the standard deduction shall be zero.
``(4) Unmarried individual.--For purposes of this section,
the term `unmarried individual' means any individual who--
``(A) is not married as of the close of the taxable
year (as determined by applying section 7703),
``(B) is not a surviving spouse (as defined in
section 2(a)) for the taxable year, and
``(C) is not a dependent of another taxpayer for a
taxable year beginning in the calendar year in which
the individual's taxable year begins.
``(5) Inflation adjustments.--
``(A) Standard deduction amount.--In the case of
any taxable year beginning after 2019, the dollar
amount in paragraph (1)(A) shall be increased by an
amount equal to--
``(i) such dollar amount, multiplied by
``(ii) the cost-of-living adjustment
determined under section 1(c)(2)(A) for the
calendar year in which the taxable year begins,
determined by substituting `calendar year 2018'
for `calendar year 2016' in clause (ii)
thereof.
``(B) Limitation amount in case of certain
dependents.--In the case of any taxable year beginning
after 2017, each of the dollar amounts in paragraph (2)
shall be increased by an amount equal to--
``(i) such dollar amount, multiplied by
``(ii)(I) in the case of the dollar amount
in paragraph (2)(A), under section 1(c)(2)(A)
for the calendar year in which the taxable year
begins determined by substituting `calendar
year 1987' for `calendar year 2016' in clause
(ii) thereof, and
``(II) in the case of the dollar amount in
paragraph (2)(B), under section 1(c)(2)(A) for
the calendar year in which the taxable year
begins determined by substituting `calendar
year 1997' for `calendar year 2016' in clause
(ii) thereof.
If any increase determined under this paragraph is not a
multiple of $100, such increase shall be rounded to the next
lowest multiple of $100.''.
(b) Conforming Amendments.--
(1) Section 63(b) is amended by striking ``, minus--'' and
all that follows and inserting ``minus the standard
deduction''.
(2) Section 63 is amended by striking subsections (f) and
(g).
(3) Section 1398(c) is amended--
(A) by striking ``Basic'' in the heading thereof,
(B) by striking ``Basic standard'' in the heading
of paragraph (3) and inserting ``Standard'', and
(C) by striking ``basic'' in paragraph (3).
(4) Section 3402(m)(3) is amended by striking ``(including the additional standard deduction under section 63(c)(3) for the aged and blind)''.
(5) Section 6014(b)(4) is amended by striking ``section 63(c)(5)'' and inserting ``section 63(c) (2)''.
(c) Effective Date.--The amendment made by this section shall apply to taxable years beginning after December 31, 2017.
SEC. 1003. REPEAL OF DEDUCTION FOR PERSONAL EXEMPTIONS.
(a) In General.--Part V of subchapter B of chapter 1 is hereby repealed.
(b) Definition of Dependent Retained.--Section 152, prior to repeal by subsection (a), is hereby redesignated as section 7706 and moved to the end of chapter 79.
(c) Application to Estates and Trusts.--Subsection (b) of section 642 is amended--
(1) by striking paragraph (2)(C),
(2) by striking paragraph (3), and
(3) by striking ``Deduction for Personal Exemption'' in the
heading thereof and inserting ``Basic Deduction''.
(d) Application to Nonresident Aliens.--Section 873(b) is amended by striking paragraph (3).
(e) Modification of Wage Withholding Rules.--
(1) In general.--Section 3402(a) is amended by striking
paragraph (2).
(2) Conforming amendment.--Section 3402(a) is amended--
(A) by redesignating subparagraphs (A) and (B) of
paragraph (1) as paragraphs (1) and (2) and moving such
redesignated paragraphs 2 ems to the left, and
(B) by striking all that precedes ``otherwise
provided in this section'' and inserting the following:
``(a) Requirement of Withholding.--Except as''.
(3) Number of exemptions.--Section 3402(f)(1) is amended--
(A) in subparagraph (A), by striking ``an
individual described in section 151(d)(2)'' and
inserting ``a dependent of any other taxpayer'', and
(B) in subparagraph (C), by striking ``with respect
to whom, on the basis of facts existing at the
beginning of such day, there may reasonably be expected
to be allowable an exemption under section 151(c)'' and
inserting ``who, on the basis of facts existing at the
beginning of such day, is reasonably expected to be a
dependent of the employee''.
(f) Modification of Return Requirement.--
(1) In general.--Paragraph (1) of section 6012(a) is
amended to read as follows:
``(1) Every individual who has gross income for the taxable
year, except that a return shall not be required of--
``(A) an individual who is not married (determined
by applying section 7703) and who has gross income for
the taxable year which does not exceed the standard
deduction applicable to such individual for such
taxable year under section 63, or
``(B) an individual entitled to make a joint return if--
``(i) the gross income of such individual, when combined with the gross income of
such individual's spouse, for the taxable year does
not exceed the standard deduction which would
be applicable to the taxpayer for such taxable
year under section 63 if such individual and
such individual's spouse made a joint return,
``(ii) such individual and such
individual's spouse have the same household as
their home at the close of the taxable year,
``(iii) such individual's spouse does not
make a separate return, and
``(iv) neither such individual nor such
individual's spouse is an individual described
in section 63(c)(2) who has income (other than
earned income) in excess of the amount in
effect under section 63(c)(2)(A).''.
(2) Bankruptcy estates.--Paragraph (8) of section 6012(a)
is amended by striking ``the sum of the exemption amount plus
the basic standard deduction under section 63(c)(2)(D)'' and
inserting ``the standard deduction in effect under section
63(c)(1)(B)''.
(g) Conforming Amendments.--
(1) Section 2(a)(1)(B) is amended by striking ``a
dependent'' and all that follows through ``section 151'' and
inserting ``a dependent who (within the meaning of section
7706, determined without regard to subsections (b)(1), (b)(2)
and (d)(1)(B) thereof) is a son, stepson, daughter, or
stepdaughter of the taxpayer''.
(2) Section 36B(b)(2)(A) is amended by striking ``section
152'' and inserting ``section 7706''.
(3) Section 36B(b)(3)(B) is amended by striking ``unless a
deduction is allowed under section 151 for the taxable year
with respect to a dependent'' in the flush matter at the end
and inserting ``unless the taxpayer has a dependent for the
taxable year''.
(4) Section 36B(c)(1)(D) is amended by striking ``with
respect to whom a deduction under section 151 is allowable to
another taxpayer'' and inserting ``who is a dependent of
another taxpayer''.
(5) Section 36B(d)(1) is amended by striking ``equal to the
number of individuals for whom the taxpayer is allowed a
deduction under section 151 (relating to allowance of deduction
for personal exemptions) for the taxable year'' and inserting
``the sum of 1 (2 in the case of a joint return) plus the
number of the taxpayer's dependents for the taxable year''.
(6) Section 36B(e)(1) is amended by striking ``1 or more
individuals for whom a taxpayer is allowed a deduction under
section 151 (relating to allowance of deduction for personal
exemptions) for the taxable year (including the taxpayer or his
spouse)'' and inserting ``1 or more of the taxpayer, the
taxpayer's spouse, or any dependent of the taxpayer''.
(7) Section 42(i)(3)(D)(ii)(I) is amended--
(A) by striking ``section 152'' and inserting
``section 7706'', and
(B) by striking the period at the end and inserting
a comma.
(8) Section 72(t)(2)(D)(i)(III) is amended by striking
``section 152'' and inserting ``section 7706''.
(9) Section 72(t)(7)(A)(iii) is amended by striking
``section 152(f)(1)'' and inserting ``section 7706(f)(1)''.
(10) Section 105(b) is amended--
(A) by striking ``as defined in section 152'' and
inserting ``as defined in section 7706'',
(B) by striking ``section 152(f)(1)'' and inserting
``section 7706(f)(1)'' and
(C) by striking ``section 152(e)'' and inserting
``section 7706(e)''.
(11) Section 105(c)(1) is amended by striking ``section
152'' and inserting ``section 7706''.
(12) Section 125(e)(1)(D) is amended by striking ``section 152'' and inserting ``section 7706''.
(13) Section 132(h)(2)(B) is amended--
(A) by striking ``section 152(f)(1)'' and inserting ``section 7706(f)(1)'', and
(B) by striking ``section 152(e)'' and inserting ``section 7706(e)''.
(14) Section 139D(c)(5) is amended by striking ``section 152'' and inserting ``section 7706''.
(15) Section 162(l)(1)(D) is amended by striking ``section 152(f)(1)'' and inserting ``section 7706(f)(1)''.
(16) Section 170(g)(1) is amended by striking ``section 152'' and inserting ``section 7706''.
(17) Section 170(g)(3) is amended by striking ``section 152(d)(2)'' and inserting ``section 7706(d)(2)''.
(18) Section 172(d) is amended by striking paragraph (3).
(19) Section 220(b)(6) is amended by striking ``with respect to whom a deduction under section 151 is allowable to'' and ins
Senate Passes Sweeping Republican Tax Overhaul Bill
Posted from nytimes.com
Taxes
United States Senate
Donald Trump
Office of the President (POTUS)
Edited 7 y ago
Posted 7 y ago
Responses: 6
5
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It's about time - needless to say not one Dem voted for it. So the Dem's don't want a taax cut. That makes no sense at all.
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SPC Kevin Ford
CBO indicates that for most people it won't be a tax cut. I'll make out like a bandit according to them though.
(1)
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SPC John Parmenter
Dems would prefer to raise your taxes -- providing for a huge central government to take care of the People.
(2)
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SPC Erich Guenther
Capt Dwayne Conyers - I'll be watching families above and below the Poverty line because I believe the entire package (beyond just the tax cuts) will reverse the increases in families living below the poverty line. It was sad under Obama that he did not see the harm of sub par GDP growth rates over time and the real social damage they were doing to the country.
(2)
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LTC Stephen F.
CMSgt (Join to see) I posted the text above as an edit to my original discussion. FYI SPC Erich Guenther MCPO Roger Collins
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CMSgt (Join to see)
Why thank you, you don't perhaps have the tl;dr? Lol, no wonder the Democrats didn't want to read it.
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