Middle Class Tax Relief Act of 2006 - Amends the Internal Revenue Code to: (1) allow individual taxpayers with adjusted gross incomes of less than $75,000 ($150,000 for joint returns) a tax credit for 10% of their income tax; (2) eliminate income taxes for individual taxpayers with adjusted gross incomes of less than $12,500 ($25,000 for joint returns); (3) double the child tax credit for individual taxpayers with adjusted gross incomes of less than $75,000 ($150,000 for joint returns); (4) eliminate the alternative minimum tax in 2007 for certain individual taxpayers; and (5) impose an income tax surtax on individual taxpayers with adjusted gross incomes of over $500,000 ($1 million for joint returns).
[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5807 Introduced in House (IH)]
109th CONGRESS
2d Session
H. R. 5807
To amend the Internal Revenue Code of 1986 to provide middle class tax
relief, impose a surtax for families with incomes over $1,000,000, and
for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 13, 2006
Mr. Weiner (for himself and Mr. Meeks of New York) 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 provide middle class tax
relief, impose a surtax for families with incomes over $1,000,000, and
for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Middle Class Tax
Relief Act of 2006''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--TAX RELIEF FOR MIDDLE CLASS FAMILIES
Sec. 101. Middle class families tax relief credits.
Sec. 102. Double the child tax credit for middle class families.
Sec. 103. Eliminate the middle class surcharge.
TITLE II--SURTAX FOR FAMILIES WITH INCOMES OVER $1 MILLION
Sec. 201. Surtax for families with incomes over $1 million.
TITLE I--TAX RELIEF FOR MIDDLE CLASS FAMILIES
SEC. 101. MIDDLE CLASS FAMILIES TAX RELIEF CREDITS.
(a) In General.--Subpart A of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 (relating to nonrefundable
personal credits) is amended by inserting before section 26 the
following new section:
``SEC. 25E. MIDDLE CLASS FAMILIES TAX RELIEF CREDIT.
``(a) 10 Percent Tax Reduction for the Middle Class.--
``(1) In general.--In the case of any natural person, there
shall be allowed as a credit against the tax imposed by this
chapter for the taxable year an amount equal to 10 percent of
the amount of such tax.
``(2) Income limitation.--The amount allowable as a credit
under paragraph (1) for any taxable year shall be reduced (but
not below zero) by an amount which bears the same ratio to the
amount so allowable (determined without regard to this
paragraph) as--
``(A) the amount (if any) by which the taxpayer's
adjusted gross income exceeds $75,000 ($150,000 in the
case of a joint return), bears to
``(B) $5,000 ($10,000 in the case of a joint
return).
``(b) Zero Tax Bracket for the Poor.--
``(1) In general.--In the case of any natural person, there
shall be allowed as a credit against the tax imposed by this
chapter for the taxable year an amount equal to the excess of--
``(A) the sum of the taxpayer's regular tax
liability for the taxable year and the tax imposed by
section 55(a) for the taxable year, over
``(B) the sum of the credits allowed under this
part (other than this subsection) for the taxable year.
``(2) Income limitation.--The amount allowable as a credit
under paragraph (1) for any taxable year shall be reduced (but
not below zero) by an amount which bears the same ratio to the
amount so allowable (determined without regard to this
paragraph) as--
``(A) the amount (if any) by which the taxpayer's
adjusted gross income exceeds $12,500 ($25,000 in the
case of a joint return), bears to
``(B) $2,500 ($5,000 in the case of a joint
return).''.
(b) Clerical Amendment.--The table of sections of subpart A of part
IV of subchapter A of chapter 1 of such Code is amended by inserting
before the item relating to section 26 the following new item:
``Sec. 25E. Middle class families tax relief credits.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
SEC. 102. DOUBLE THE CHILD TAX CREDIT FOR MIDDLE CLASS FAMILIES.
(a) In General.--Subsection (a) of section 24 of the Internal
Revenue Code of 1986 (relating to child tax credit) is amended to read
as follows:
``(a) Allowance of Credit.--
``(1) In general.--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 the sum of--
``(A) the basic credit for the taxable year, plus
``(B) the additional credit for the taxable year.
``(2) Basic credit.--For purposes of this section, the term
`basic credit' means--
``(A) $1,000 in the case of any taxable year
beginning before January 1, 2011, and
``(B) $500 in the case of any other taxable year.
``(3) Additional credit.--For purposes of this section, the
term `additional credit' means--
``(A) $1,000 in the case of any taxable year
beginning before January 1, 2011, and
``(B) $500 in the case of any other taxable
year.''.
(b) Limitation on Additional Credit Based on Adjusted Gross
Income.--Subsection (b) of section 24 of such Code is amended by adding
at the end the following new paragraphs:
``(4) Limitation on additional credit based on adjusted
gross income.--The amount of the additional credit determined
under subsection (a)(3) shall be reduced (but not below zero)
by an amount which bears the same ratio to such amount
(determined without regard to this paragraph) as--
``(A) the amount (if any) by which the taxpayer's
adjusted gross income exceeds $75,000 ($150,000 in the
case of a joint return), bears to
``(B) $5,000 ($10,000 in the case of a joint
return).''.
(c) Conforming Amendments.--Paragraph (1) of section 24(b) of such
Code is amended--
(1) by striking ``the credit allowable under subsection
(a)'' and inserting ``the basic credit determined under
subsection (a)(2)'', and
(2) by inserting ``on basic credit'' after ``Limitation''
in the heading thereof.
(d) Coordination With EGTRRA Sunset.--Section 901 of the Economic
Growth and Tax Relief Reconciliation Act of 2001 shall not apply to the
amendment made by section 201(a) of such Act.
(e) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
SEC. 103. ELIMINATE THE MIDDLE CLASS SURCHARGE.
(a) In General.--Section 55 of the Internal Revenue Code of 1986
(relating to alternative minimum tax imposed) is amended by adding at
the end the following new subsection:
``(f) Exemption for Individuals for Taxable Years Beginning in
2007.--For any taxable year beginning in 2007, in the case of an
individual--
``(1) In general.--The tentative minimum tax of the
taxpayer shall be zero if the adjusted gross income of the
taxpayer (as determined for purposes of the regular tax) is
equal to or less than the threshold amount.
``(2) Phasein of liability above exemption level.--In the
case of a taxpayer whose adjusted gross income exceeds the
threshold amount but does not exceed $112,500 ($225,000 in the
case of a joint return), the tax imposed by subsection (a)
shall be the amount which bears the same ratio to such tax
(determined without regard to this subsection) as--
``(A) the excess of--
``(i) the adjusted gross income of the
taxpayer (as determined for purposes of the
regular tax), over
``(ii) the threshold amount, bears to
``(B) $12,500 ($25,000 in the case of a joint
return).
``(3) Threshold amount.--For purposes of this paragraph,
the term `threshold amount' means $100,000 ($200,000 in the
case of a joint return).
``(4) Estates and trusts.--This subsection shall not apply
to any estate or trust.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2005.
TITLE II--SURTAX FOR FAMILIES WITH INCOMES OVER $1 MILLION
SEC. 201. SURTAX FOR FAMILIES WITH INCOMES OVER $1 MILLION.
(a) General Rule.--Section 1 of the Internal Revenue Code of 1986
(relating to imposition of tax on individuals) is amended by adding at
the end the following new subsection:
``(j) Surtax for Families With Incomes Over $1,000,000.--
``(1) In general.--If the adjusted gross income of a
taxpayer exceeds $500,000 ($1,000,000, in the case of a joint
return), the tax imposed by this section (determined without
regard to this subsection) shall be increased by an amount
determined in accordance with the following tables:
``(A) Joint returns.--In the case of a joint
return:
``If taxable income is: The tax is:
Over $1,000,000 but not over
$1,000,000,000.
7% of the excess over
$1,000,000
Over $1,000,000,000............
$69,930,000, plus 10% of the
excess over
$1,000,000,000
``(B) Other returns.--In the case of any other
return:
``If taxable income is: The tax is:
Over $500,000 but not over
$500,000,000.
7% of the excess over $500,000
Over $500,000,000..............
$34,965,000, plus 10% of the
excess over
$500,000,000
``(2) Tax not to apply to estates and trusts.--This
subsection shall not apply to an estate or trust.
``(3) Special rule.--For purposes of section 55, the amount
of the regular tax shall be determined without regard to this
subsection.''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
(c) Section 15 Not to Apply.--The amendment made by subsection (a)
shall not be treated as a change in a rate of tax for purposes of
section 15 of the Internal Revenue Code of 1986.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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