1 2 3 4 5 6 7 cent of the amount by which such taxable income exceeds $3,000, whichever is the lesser; plus "(B) SURTAX.-A surtax on the taxable investment income computed as provided in section 11 (c) as though the taxable investment income were the taxable income referred to in section 11 (c)." (b) RECEIPT OF MINIMUM DISTRIBUTIONS BY DOMES9 TIC CORPORATIONS.-Subsection (b) of section 963 (relat10 ing to receipt of minimum distributions by domestic cor11 porations) is amended to read as follows: 12 "(b) MINIMUM Distribution.—For purposes of this 13 section, a minimum distribution with respect to the earnings 14 and profits for the taxable year of any controlled foreign cor15 poration or corporations shall, in the case of any United 16 States shareholder, be its pro rata share of an amount deter17 mined in accordance with whichever of the following tables 18 applies to the taxable year: 1 2 3 4 (c) AMENDMENT OF SECTION 242.-Section 242 (a) 5 (relating to deduction for partially tax-exempt interest) is 6 amended by adding at the end thereof the following new 7 sentence: "No deduction shall be allowed under this section 8 for purposes of any surtax imposed by this subtitle." 1 PART III-EFFECTIVE DATES 2 SEC. 131. GENERAL RULE. 3 4 Except for purposes of section 21 of the Internal Reve nue Code of 1954 (relating to effect of changes in rates 5 during a taxable year), the amendments made by parts 6 I and II of this title shall apply with respect to taxable 7 years beginning after December 31, 1963. 8 SEC. 132. FISCAL YEAR TAXPAYERS. 9 Effective with respect to taxable years ending after 10 December 31, 1963, subsection (d) of section 21 (relating 11 to effect of changes in rates during a taxable year) is 12 amended to read as follows: 13 "(d) CHANGES MADE BY REVENUE ACT OF 1963 14 1964. "(1) INDIVIDUALS.-In applying subsection (a) to the taxable year of an individual beginning in 1963 and ending in 1964 "(A) the rate of tax for the period on and after January 1, 1964, shall be applied to the taxable income determined as if part IV of subchapter B (relating to standard deduction for individuals), as amended by the Revenue Act of 1963 1964, applied to taxable years ending after December 31, 1963, and "(B) section 4 (relating to rules for optional tax), as amended by such Act, shall be applied to taxable years ending after December 31, 1963. In applying subsection (a) to a taxable year of an individual beginning in 1963 and ending in 1964, or beginning in 1964 and ending in 1965, the change in the tax imposed under section 3 shall be treated as a change in a rate of tax. “(2) CORPORATIONS.-In applying subsection (a) to a taxable year of a corporation beginning in 1963 and ending in 1964, if— "(A) the surtax exemption of such corporation for such taxable year is less than $25,000 by reason of the application of section 1561 (relating to surtax exemptions in case of certain controlled corporations), or "(B) an additional tax is imposed on the taxable income of such corporation for such taxable year by section 1562 (b) (relating to additional tax in case of component members of controlled groups which elect multiple surtax exemptions), the change in the surtax exemption, or the imposition of such additional tax, shall be treated as a change in a rate of tax taking effect on January 1, 1964." 1. Title II-Structural Changes 2 SEC. 201. DIVIDENDS RECEIVED BY INDIVIDUALS. 3 (a) REDUCTION OF 4 PERCENT CREDIT TO 2 PERCENT 4 CREDIT FOR CALENDAR YEAR 1964. 5 6 7 8 9 10 (1) GENERAL RULE.-Section 34 (a) (relating to general rule for credit for dividends received) is amended by striking out "an amount equal to 4 percent of the dividends which are received after July 31, 1954, from domestic corporations and are included in gross income" and inserting in lieu thereof: 11 "an amount equal to the following percentage of the divi12 dends which are received from domestic corporations and are 13 included in gross income: "(1) 4 percent of the amount of such dividends which are received before January 1, 1964, and "(2) 2 percent of the amount of such dividends which are received during the calendar year 1964." (2) LIMITATIONS.-Section 34 (b) (2) (relating to limitations on amount of credit) is amended— (A) by inserting “, or beginning after December 31, 1963" after "1955" at the end of subparagraph (A), and (B) by inserting ", and beginning before January 1, 1964" after "1954" at the end of subparagraph (B). |