S.Amdt. 4794

SA 4794. Mr. MERKLEY (for himself, Mr. Franken, Mr. Levin, Mr. Udall
of Colorado, Mr. Akaka, and Mr. Begich) submitted an amendment intended
to be proposed to amendment SA 4753 proposed by Mr. Reid (for himself
and Mr. McConnell) to the bill H.R. 4853, to amend the Internal Revenue
Code of 1986 to extend the funding and expenditure authority of the
Airport and Airway Trust Fund to amend title 49, United States Code, to
extend authorizations for the airport improvement program, and for
other purposes; which was ordered to lie on the table; as follows:

Strike section 101 and insert the following:

SEC. 101. TEMPORARY EXTENSION OF 2001 TAX RELIEF.

(a) Temporary Extension.--
(1) In general.--Section 901 of the Economic Growth and Tax
Relief Reconciliation Act of 2001 is amended by striking
``December 31, 2010'' both places it appears and inserting
``December 31, 2012''.
(2) Effective date.--The amendment made by this subsection
shall take effect as if included in the enactment of the
Economic Growth and Tax Relief Reconciliation Act of 2001.
(b) Exception for Income Tax Rates of Taxpayers With Income
of $1,000,000 or More During 2011 and 2012.--Subsection (i)
of section 1 is amended by redesignating paragraph (3) as
paragraph (4) and by inserting after paragraph (2) the
following new paragraph:
``(3) 35-percent rate bracket.--
``(A) In general.--In the case of taxable years beginning
after December 31, 2010, and before January 1, 2013--
``(i) the rate of tax under subsections (a), (b), (c), and
(d) on a taxpayer's taxable income in the fifth rate bracket
shall be 35 percent to the extent such income does not exceed
an amount equal to the excess of--

``(I) the applicable amount, over
``(II) the dollar amount at which such bracket begins, and

``(ii) the 39.6 percent rate of tax under such subsections
shall apply only to the taxpayer's taxable income in such
bracket in excess of the amount to which clause (i) applies.
``(B) Applicable amount.--For purposes of this paragraph,
the term `applicable amount' means the excess of--
``(i) the applicable threshold, over
``(ii) the sum of the following amounts in effect for the
taxable year:

``(I) the basic standard deduction (within the meaning of
section 63(c)(2)), and
``(II) the exemption amount (within the meaning of section
151(d)(1) (or, in the case of subsection (a), 2 such
exemption amounts).

``(C) Applicable threshold.--For purposes of this
paragraph, the term `applicable threshold' means--
``(i) $1,000,000 in the case of subsections (a), (b), and
(c), and
``(ii) \1/2\ the amount applicable under clause (i) (after
adjustment, if any, under subparagraph (E)) in the case of
subsection (d).
``(D) Fifth rate bracket.--For purposes of this paragraph,
the term `fifth rate bracket' means the bracket which would
(determined without regard to this paragraph) be the 36-
percent rate bracket.
``(E) Inflation adjustment.--For purposes of this
paragraph, a rule similar to the rule of paragraph (1)(C)
shall apply with respect to taxable years beginning in
calendar years after 2011, applied by substituting `2009' for
`1992' in subsection (f)(3)(B).''.
(c) Transfers of Funds.--There are hereby appropriated to
the Federal Old-Age and Survivors Trust Fund and the Federal
Disability Insurance Trust Fund established under section 201
of the Social Security Act (42 U.S.C. 401) amounts equal to
the increase in revenues to the Treasury by reason of the
application of subsection (b). The Secretary of the Treasury
shall transfer such funds from the general fund at such times
and in such manner as the Secretary determines appropriate
and shall transfer amounts to each such trust fund in the
same proportion as taxes under chapter 21 of the Internal
Revenue Code of 1986 are transferred to such fund.
(d) Effective Date.--Except as otherwise provided, the
amendments made by this section shall apply to taxable years
beginning after December 31, 2010.
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