Sec. 552. Study of tax incentives for expenditures required by Occupational Page Sec. 801. Grants to States for social services Sec. 802. Change in public assistance matching formula, and increase in amount of public assistance dollar limitations, for Puerto Rico, SEC. 2. AMENDMENT OF 1954 CODE. Except as otherwise expressly provided, whenever in this Act an amend- SEC. 3. POLICY WITH RESPECT TO ADDITIONAL TAX REDUCTIONS. As a matter of national policy the rate of growth in Federal outlays, ad- justed for inflation, should not exceed 1 percent per year between fiscal year 1979 and fiscal year 1983; Federal outlays as a percentage of gross national product should decline to below 21 percent in fiscal year 1980, 20.5 percent in fiscal year 1981, 20 percent in fiscal year 1982 and 19.5 percent in fiscal year 1983; and the Federal budget should be balanced in fiscal years 1982 and 1983. If these conditions are met, it is the intention that the tax-writing committees of Congress will report legislation providing significant tax re- ductions for individuals to the extent that these tax reductions are justified in the light of prevailing and expected economic conditions. TITLE I-PROVISIONS PRIMARILY AFFECTING INDIVIDUAL INCOME TAX Subtitle A-Tax Reductions and Extensions SEC. 101. WIDENING OF BRACKETS; RATE CUTS IN CERTAIN BRACKETS; (a) RATE REDUCTION.-Section 1 (relating to tax imposed) is amended to read as follows: "SECTION 1. TAX IMPOSED. "(a) MARRIED INDIVIDUALS FILING JOINT RETURNS AND SURVIVING SPOUSES.-There is hereby imposed on the taxable income of― "(1) every married individual (as defined in section 143) who makes a single return jointly with his spouse under section 6013, and "(2) every surviving spouse (as defined in section 2(a)), a tax determined in accordance with the following table: "If taxable income is: Not over $3,400 ..... Over $3,400 but not over $5,500..... The tax is: No Tax. 14% of excess over $3,400. $294, plus 16% of excess over $5,500. over 26 USC 1. "(b) HEADS OF HOUSEHOLDS.-There is hereby imposed on the taxable income of every individual who is the head of a household (as defined in section 2(b)) a tax determined in accordance with the following table: "If taxable income is: Not over $2,300...... Over $2,300 but not over $4,400.. Over $60,600 but not over $81,800........ The tax is: No tax. 14% of excess over $2,300. $294, plus 16% of excess over $4,400. $630, plus 18% of excess over $6,500. $1,026, plus 22% of excess over $8,700. $1,708, plus 24% of excess over $11,800. $2,476, plus 26% of excess over $15,000. $3,308, plus 31% of excess over $18,200. $4,951, plus 36% of excess over $23,500. $6,859, plus 42% of excess over $28,800. $9,085, plus 46% of excess over $34,100. $13,961, plus 54% of excess $44,700. $22,547, plus 59% of excess $60,600. over over "(c) UNMARRIED INDIVIDUALS (OTHER THAN SURVIVING SPOUSES AND HEADS OF HOUSEHOLDS).-There is hereby imposed on the taxable income of every individual (other than a surviving spouse as defined in section 2(a) or the head of a household as defined in section 2(b)) who is not a married individual (as defined in section 143) a tax determined in accordance with the following table: "If taxable income is: Not over $2,300. Over $2,300 but not over $3,400.. Over $55,300 but not over $81,800........ Over $81,800 but not over $108,300...... The tax is: No tax. 14% of excess over $2,300. $154, plus 16% of excess over $3,400. $314, plus 18% of excess over $4,400. $692, plus 19% of excess over $6,500. $1,072, plus 21% of excess over $8,500. $1,555, plus 24% of excess over $10,800. $2,059, plus 26% of excess over $12,900. $2,605, plus 30% of excess over $15,000. $3,565, plus 34% of excess over $18,200. $5,367, plus 39% of excess over $23,500. $7,434, plus 44% of excess over $28,800. $9,766, plus 49% of excess over $34,100. $13,392, plus 55% of excess over $41,500. $20,982, plus 63% of excess over $55,300. $37,677, plus 68% of excess $81,800. over "If taxable income is: Over $108,300 The tax is: $55,697, plus 70% of excess over $108,300. “(d) MARRIED INDIVIDUALS FILING SEPARATE RETURNS.-There is hereby imposed on the taxable income of every married individual (as defined in section 143) who does not make a single return jointly with his spouse under section 6013 a tax determined in accordance with the following table: "If taxable income is: Not over $1,700. Over $1,700 but not over $2,750. Over $10,100 but not over $12,300........ Over $54,700 but not over $81,200........ Over $81,200 but not over $107,700...... "(e) ESTATES AND TRUSTS.-There is hereby imposed on the taxable income of every estate and trust taxable under this subsection a tax determined in accordance with the following table: "If taxable income is: Not over $1,050...... Over $1,050 but not over $2,100.. Over $8,400 but not over $10,600.......... Over $15,900 but not over $21,200.... Over $53,000 but not over $79,500........ Over $79,500 but not over $106,000...... The tax is: (b) INCREASE IN ZERO BRACKET AMOUNT.-Subsection (d) of section 63 (defining zero bracket amount) is amended (1) by striking out "$3,200" and inserting in lieu thereof "$3,400", (2) by striking out "$2,200" and inserting in lieu thereof "$2,300", and (3) by striking out "$1,600" and inserting in lieu thereof "$1,700". (c) FILING REQUIREMENTS.-Paragraph (1) of section 6012(a) (relating to persons required to make returns of income) is amended(1) by striking out "$2,950" and inserting in lieu thereof "$3,050", (2) by striking out "$3,950" and inserting in lieu thereof "$4,150", and (3) by striking out "$4,700" and inserting in lieu thereof "$4,900". (d) TECHNICAL AMENDMENTS.— (1) Subparagraph (C) of section 402(e)(1) (relating to tax on lump sum distributions) is amended by striking out "$2,200" and inserting in lieu thereof "$2,300". (2) Paragraph (3) of section 1302(b) (relating to transitional rule for determining base period income) is amended to read as follows: "(3) TRANSITIONAL RULE FOR DETERMINING BASE PERIOD INCOME.-The base period income (determined under paragraph (2)) for any taxable year beginning before January 1, 1977, shall be increased by "(A) $3,200 in the case of a joint return or a surviving spouse (as defined in section 2(a)), "(B) $2,200 in the case of an individual who is not married (within the meaning of section 143) and is not a surviving spouse (as so defined), or "(C) $1,600 in the case of a married individual (within the meaning of section 143) filing a separate return. For purposes of this paragraph, filing status shall be determined as of the computation year." (e) WITHHOLDING AMENDMENTS.— (1) WITHHOLDING TABLES.-Subsection (a) of section 3402 (relating to requirement of withholding) is amended by striking out the second and third sentences and inserting in lieu thereof the following new sentence: "With respect to wages paid after December 31, 1978, the tables so prescribed shall be the same as the tables prescribed under this subsection which were in effect on January 1, 1975, except that such tables shall be modified to the extent necessary to reflect the amendments made by sections 101 and 102 of the Tax Reduction and Simplification Act of 1977 and the amendments made by section 101 of the Revenue Act of 1978." (2) WITHHOLDING ALLOWANCES BASED ON ITEMIZED DEDUCTIONS.-Subparagraph (B) of section 3402(m)(1) (relating to withholding allowances based on itemized deductions) is amended(A) by striking out "$3,200" and inserting in lieu thereof "$3,400", and (B) by striking out "$2,200” and inserting in lieu thereof "$2,300". (f) EFFECTIVE DATES. (1) IN GENERAL.-The amendments made by subsections (a), (b), (c), and (d) shall apply to taxable years beginning after December 31, 1978. |