S. 3393Senate112th Congress (2011-2013)Introduced

Middle Class Tax Cut Act

Sponsored by Harry ReidSen. Harry Reid (D-NV)
Introduced July 17, 2012

Legislative Activity

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2 earlier actions
SenateCalendars Latest Action

Read the second time. Placed on Senate Legislative Calendar under General Orders. Calendar No. 457.

July 18, 2012

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SenateIntro Referral

Introduced in Senate

July 17, 2012

SenateCalendars

Introduced in the Senate. Read the first time. Placed on Senate Legislative Calendar under Read the First Time. (text of measure as introduced: CR S5087-5089)

July 17, 2012

SenateCalendars

Read the second time. Placed on Senate Legislative Calendar under General Orders. Calendar No. 457.

July 18, 2012

Floor Debate

24 members

What members said about S. 3393 on the floor

13 Republicans10 Democrats1 Independent
Mitch McConnell
Sen. Mitch McConnellR-KY · Jul 18, 2012

Madam President, I indicated to the majority leader before the Senate convened today that I wanted to have a discussion, the two of us, on several items. No. 1, I understand my friend the majority…

Richard J. Durbin
Sen. Richard J. DurbinD-IL · Jul 18, 2012

Madam President, I ask unanimous consent to speak as in morning business. Madam President, there is an old adage that sunlight is the best disinfectant. The reason it is an old adage is it is true.…

James M. Inhofe
Sen. James M. InhofeR-OK · Jul 18, 2012

Mr. President, I thank the Senator from Alabama. A lot has been said, and those of us who serve on the Armed Services Committee have been watching what is going on with a lot of distress. I think it…

Harry Reid
Sen. Harry ReidD-NV · Jul 18, 2012

Madam President, I move to proceed to Calendar No. 442. Madam President, I suggest the absence of a quorum. Madam President, I ask unanimous consent that the order for the quorum call be rescinded.…

Lamar Alexander
Sen. Lamar AlexanderR-TN · Jul 18, 2012

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. I ask unanimous consent to speak for up to 15 minutes as in morning business. Mr. President, would the Chair…

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Daniel Coats
Sen. Daniel CoatsR-IN · Jul 18, 2012

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. Mr. President, I come to the floor today to comment on a couple of things. One is the dialog that took place…

Roger F. Wicker
Sen. Roger F. WickerR-MS · Jul 18, 2012

I thank my friend. Absolutely. I thank my friend for leading us in this colloquy. We ought to be talking about jobs and the economy. We ought to be bringing legislation to the floor and giving our…

Bernard Sanders
Sen. Bernard SandersI-VT · Jul 18, 2012

I thank the Senator from Illinois. Madam President, I appreciate the remarks of the Senator from Illinois, and I wanted to amplify on them a little bit. But before I do, I wanted to mention something…

Roy Blunt
Sen. Roy BluntR-MO · Jul 18, 2012

Madam President, I ask unanimous consent to enter into a colloquy with some of my colleagues on the minority side for 30 minutes. I will yield to Mr. Wicker who I believe has a unanimous consent…

Christopher A. Coons
Sen. Christopher A. CoonsD-DE · Jul 18, 2012

Madam President, I appreciate the opportunity to speak today. I am following the Senator from the State of Colorado. My topic is also about manufacturing jobs in the United States. I thank the…

Debbie Stabenow
Sen. Debbie StabenowD-MI · Jul 18, 2012

Mr. President, I first want to thank my friend and colleague from Connecticut for his commitment and compassion and passion on this issue. I appreciate very much his joining with me and others to…

Jeff Sessions
Sen. Jeff SessionsR-AL · Jul 18, 2012

Mr. President, I ask unanimous consent that the order for the quorum call be rescind. I thank the Chair, I yield the floor, and I suggest the absence of a quorum. Would the Senator yield for a…

John McCain
Sen. John McCainR-AZ · Jul 18, 2012

Madam President, I ask unanimous consent that the order for the quorum call be rescinded. Madam President, rarely do I come to the floor of this body to discuss particular individuals. But I…

Show 11 more
Sherrod Brown
Sen. Sherrod BrownD-OH · Jul 18, 2012

Madam President, I ask unanimous consent that the order for the quorum call be rescinded. Madam President, I ask unanimous consent to speak for up to 10 minutes as in morning business. Madam…

John Barrasso
Sen. John BarrassoR-WY · Jul 18, 2012

Mr. President, I ask unanimous consent to speak as in morning business. Mr. President, I come to the floor, as I do each week, as a physician who practiced medicine in Wyoming for a quarter of a…

Barbara Boxer
Sen. Barbara BoxerD-CA · Jul 18, 2012

Mr. President, I am here to speak in favor of the Bring Jobs Home Act. I wish to thank my colleague Senator Stabenow of Michigan, who understands this issue because in her State of Michigan they…

John Thune
Sen. John ThuneR-SD · Jul 18, 2012

Mr. President, I would say to my colleagues who are here on the floor that this is a defining moment for our country. The most basic responsibility and the most important priority we have as…

Carl Levin
Sen. Carl LevinD-MI · Jul 18, 2012

Madam President, I thank the Senator from Illinois for his leadership in dealing with the offshore tax haven problem. This is not a new issue. It is not a new issue for me. In fact, my Permanent…

Kelly Ayotte
Sen. Kelly AyotteR-NH · Jul 18, 2012

Mr. President, I wish to thank Senator Sessions. I appreciate his leadership as the ranking member on the Budget Committee and also as a senior member of the Armed Services Committee. This is so…

Jerry Moran
Sen. Jerry MoranR-KS · Jul 18, 2012

Mr. President, I ask unanimous consent to address the Senate as in morning business. Mr. President, Kansas has a long and remarkable history of supporting our Nation's aviation industry both…

Mike Lee
Sen. Mike LeeR-UT · Jul 18, 2012

I thank the Senator very much. Madam President, on Monday we heard from Democrats who insist that Congress must now raise taxes on the American people. In fact, they are so committed to this task…

Mark Udall
Sen. Mark UdallD-CO · Jul 18, 2012

Madam President, I am here on the Senate floor urging my colleagues in both parties to extend the production tax credit for wind as soon as possible. I listened with great interest to the discussion…

Herb Kohl
Sen. Herb KohlD-WI · Jul 17, 2012

Mr. President, I rise today to introduce the Protecting American Trade Secrets and Innovation Act of 2012. This legislation will help American companies protect their valuable trade secrets by giving…

Richard Blumenthal
Sen. Richard BlumenthalD-CT · Jul 18, 2012

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. Mr. President, I come to the floor to join the voices of my colleagues in favor of supporting strongly, and I…

Bill Text

Latest available legislative text

Reading Mode
Latest
Placed on Calendar SenateIssued July 18, 2012

II

Calendar No. 457

112th CONGRESS

2d Session

S. 3393

IN THE SENATE OF THE UNITED STATES

July 17, 2012

Mr. Reid introduced the following bill; which was read the first time

July 18, 2012

Read the second time and placed on the calendar

A BILL

To amend the Internal Revenue Code of 1986 to provide tax relief to middle-class families.

1.

Short title; etc

(a)

Short title

This Act may be cited as the Middle Class Tax Cut 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 of this Act is as follows:

Sec. 1. Short title; etc.

TITLE I—Temporary extension of tax relief

Sec. 101. Temporary extension of 2001 tax relief.

Sec. 102. Temporary extension of 2003 tax relief.

Sec. 103. Temporary extension of 2010 tax relief.

Sec. 104. Temporary extension of election to expense certain depreciable business assets.

TITLE II—Estate tax relief

Sec. 201. Modifications to estate, gift, and generation-skipping transfer taxes.

TITLE III—Alternative minimum tax relief

Sec. 301. Temporary extension of increased alternative minimum tax exemption amount.

Sec. 302. Temporary extension of alternative minimum tax relief for nonrefundable personal credits.

TITLE IV—Budgetary effects

Sec. 401. Budgetary effects.

I

Temporary extension of tax relief

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, 2012 both places it appears and inserting December 31, 2013.

(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)

Application to certain high-Income taxpayers

(1)

Income tax rates

(A)

Treatment of 25- and 28-percent rate brackets

Paragraph (2) of section 1(i) is amended to read as follows:

(2)

25- and 28-percent rate brackets

The tables under subsections (a), (b), (c), (d), and (e) shall be applied—

(A)

by substituting 25% for 28% each place it appears (before the application of subparagraph (B)), and

(B)

by substituting 28% for 31% each place it appears.

.

(B)

33-percent rate bracket

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)

33-percent rate bracket

(A)

In general

In the case of taxable years beginning after December 31, 2012—

(i)

the rate of tax under subsections (a), (b), (c), and (d) on a taxpayer's taxable income in the fourth rate bracket shall be 33 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 36 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)

$250,000 in the case of subsection (a),

(ii)

$225,000 in the case of subsection (b),

(iii)

$200,000 in the case of subsections (c), and

(iv)

1/2 the amount applicable under clause (i) (after adjustment, if any, under subparagraph (E)) in the case of subsection (d).

(D)

Fourth rate bracket

For purposes of this paragraph, the term fourth 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, with respect to taxable years beginning in calendar years after 2012, each of the dollar amounts under clauses (i), (ii), and (iii) of subparagraph (C) shall be adjusted in the same manner as under paragraph (1)(C), except that subsection (f)(3)(B) shall be applied by substituting 2008 for 1992.

.

(2)

Phaseout of personal exemptions and itemized deductions

(A)

Overall limitation on itemized deductions

Section 68 is amended—

(i)

by striking the applicable amount the first place it appears in subsection (a) and inserting the applicable threshold in effect under section 1(i)(3),

(ii)

by striking the applicable amount in subsection (a)(1) and inserting such applicable threshold,

(iii)

by striking subsection (b) and redesignating subsections (c), (d), and (e) as subsections (b), (c), and (d), respectively, and

(iv)

by striking subsections (f) and (g).

(B)

Phaseout of deductions for personal exemptions

(i)

In general

Paragraph (3) of section 151(d) is amended—

(I)

by striking the threshold amount in subparagraphs (A) and (B) and inserting the applicable threshold in effect under section 1(i)(3),

(II)

by striking subparagraph (C) and redesignating subparagraph (D) as subparagraph (C), and

(III)

by striking subparagraphs (E) and (F).

(ii)

Conforming amendments

Paragraph (4) of section 151(d) is amended—

(I)

by striking subparagraph (B),

(II)

by redesignating clauses (i) and (ii) of subparagraph (A) as subparagraphs (A) and (B), respectively, and by indenting such subparagraphs (as so redesignated) accordingly, and

(III)

by striking all that precedes in a calendar year after 1989, and inserting the following:

(4)

Inflation adjustment

In the case of any taxable year beginning

.

(c)

Effective date

Except as otherwise provided, the amendments made by this section shall apply to taxable years beginning after December 31, 2012.

(d)

Application of EGTRRA sunset

Each amendment made by subsection (b) shall be subject to title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001 to the same extent and in the same manner as if such amendment was included in title I of such Act.

102.

Temporary extension of 2003 tax relief

(a)

Extension

(1)

In general

Section 303 of the Jobs and Growth Tax Relief Reconciliation Act of 2003 is amended by striking December 31, 2012 and inserting December 31, 2013.

(2)

Effective date

The amendment made by this subsection shall take effect as if included in the enactment of the Jobs and Growth Tax Relief Reconciliation Act of 2003.

(b)

20-Percent capital gains rate for certain high income individuals

(1)

In general

Paragraph (1) of section 1(h) is amended by striking subparagraph (C), by redesignating subparagraphs (D) and (E) as subparagraphs (E) and (F) and by inserting after subparagraph (B) the following new subparagraphs:

(C)

15 percent of the lesser of—

(i)

so much of the adjusted net capital gain (or, if less, taxable income) as exceeds the amount on which a tax is determined under subparagraph (B), or

(ii)

the excess (if any) of—

(I)

the amount of taxable income which would (without regard to this paragraph) be taxed at a rate below 36 percent, over

(II)

the sum of the amounts on which a tax is determined under subparagraphs (A) and (B),

(D)

20 percent of the adjusted net capital gain (or, if less, taxable income) in excess of the sum of the amounts on which tax is determined under subparagraphs (B) and (C),

.

(2)

Minimum tax

Paragraph (3) of section 55(b) is amended by striking subparagraph (C), by redesignating subparagraph (D) as subparagraph (E), and by inserting after subparagraph (B) the following new subparagraphs:

(C)

15 percent of the lesser of—

(i)

so much of the adjusted net capital gain (or, if less, taxable excess) as exceeds the amount on which tax is determined under subparagraph (B), or

(ii)

the excess described in section 1(h)(1)(C)(ii), plus

(D)

20 percent of the adjusted net capital gain (or, if less, taxable excess) in excess of the sum of the amounts on which tax is determined under subparagraphs (B) and (C), plus

.

(c)

Conforming amendments

(1)

The following provisions are each amended by striking 15 percent and inserting 20 percent:

(A)

Section 531.

(B)

Section 541.

(C)

Section 1445(e)(1).

(D)

The second sentence of section 7518(g)(6)(A).

(E)

Section 53511(f)(2) of title 46, United States Code.

(2)

Sections 1(h)(1)(B) and 55(b)(3)(B) are each amended by striking 5 percent (0 percent in the case of taxable years beginning after 2007) and inserting 0 percent.

(3)

Section 1445(e)(6) is amended by striking 15 percent (20 percent in the case of taxable years beginning after December 31, 2010) and inserting 20 percent.

(d)

Effective dates

(1)

In general

Except as otherwise provided, the amendments made by subsections (b) and (c) shall apply to taxable years beginning after December 31, 2012.

(2)

Withholding

The amendments made by paragraphs (1)(C) and (3) of subsection (c) shall apply to amounts paid on or after January 1, 2013.

(e)

Application of JGTRRA sunset

Each amendment made by subsections (b) and (c) shall be subject to section 303 of the Jobs and Growth Tax Relief Reconciliation Act of 2003 to the same extent and in the same manner as if such amendment was included in title III of such Act.

103.

Temporary extension of 2010 tax relief

(a)

American Opportunity Tax Credit

(1)

In general

Section 25A(i) is amended by striking or 2012 and inserting 2012, or 2013.

(2)

Treatment of possessions

Section 1004(c)(1) of division B of the American Recovery and Reinvestment Tax Act of 2009 is amended by striking and 2012 each place it appears and inserting 2012, and 2013.

(b)

Child tax credit

Section 24(d)(4) is amended—

(1)

by striking and 2012 in the heading and inserting 2012, and 2013, and

(2)

by striking or 2012 and inserting 2012, or 2013.

(c)

Earned income tax credit

Section 32(b)(3) is amended—

(1)

by striking and 2012 in the heading and inserting 2012, and 2013, and

(2)

by striking or 2012 and inserting 2012, or 2013.

(d)

Temporary extension of rule disregarding refunds in the administration of Federal programs and Federally assisted programs

Subsection (b) of section 6409 is amended by striking December 31, 2012 and inserting December 31, 2013.

(e)

Effective dates

(1)

In general

Except as provided in paragraph (2), the amendments made by this section shall apply to taxable years beginning after December 31, 2012.

(2)

Rule disregarding refunds in the administration of certain programs

The amendment made by subsection (d) shall apply to amounts received after December 31, 2012.

104.

Temporary extension of election to expense certain depreciable business assets

(a)

In general

(1)

Dollar limitation

Section 179(b)(1) is amended—

(A)

by striking and at the end of subparagraph (C),

(B)

by redesignating subparagraph (D) as subparagraph (E),

(C)

by inserting after subparagraph (C) the following new subparagraph:

(D)

$250,000 in the case of taxable years beginning in 2013, and

, and

(D)

in subparagraph (E), as so redesignated, by striking 2012 and inserting 2013.

(2)

Reduction in limitation

Section 179(b)(2) is amended—

(A)

by striking and at the end of subparagraph (C),

(B)

by redesignating subparagraph (D) as subparagraph (E),

(C)

by inserting after subparagraph (C) the following new subparagraph:

(D)

$800,000 in the case of taxable years beginning in 2013, and

, and

(D)

in subparagraph (E), as so redesignated, by striking 2012 and inserting 2013.

(b)

Computer software

Section 179(d)(1)(A)(ii) is amended by striking 2013 and inserting 2014.

(c)

Election

Section 179(c)(2) is amended by striking 2013 and inserting 2014.

(d)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2012.

II

Estate tax relief

201.

Modifications to estate, gift, and generation-skipping transfer taxes

(a)

Modifications to estate tax

(1)

Exclusion amount

Paragraph (3) of section 2010(c) is amended to read as follows:

(3)

Basic exclusion amount

For purposes of this section, the basic exclusion amount is $3,500,000.

.

(2)

Maximum estate tax rate

The table in subsection (c) of section 2001 is amended by striking Over $500,000 and all that follows and inserting the following:

Over $500,000 but not over $750,000$155,800, plus 37 percent of the excess of such amount over $500,000.
Over $750,000 but not over $1,000,000$248,300, plus 39 percent of the excess of such amount over $750,000.
Over $1,000,000 but not over $1,250,000$345,800, plus 41 percent of the excess of such amount over $1,000,000.
Over $1,250,000 but not over $1,500,000$448,300, plus 43 percent of the excess of such amount over $1,250,000.
Over $1,500,000$555,800, plus 45 percent of the excess of such amount over $1,500,000.

.

(b)

Modifications of estate and gift taxes To reflect differences in credit resulting from different tax rates and exclusion amounts

(1)

Changing tax rates

Notwithstanding section 304 of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, section 901 of the Economic Growth and Tax Relief Reconciliation Act of 2001 shall not apply to the amendments made by section 302(d) of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010.

(2)

Decreasing exclusions

(A)

Estate tax adjustment

Section 2001 is amended by adding at the end the following new subsection:

(h)

Adjustment To reflect changes in exclusion amount

(1)

In general

If, with respect to any gift to which subsection (b)(2) applies, the applicable exclusion amount in effect at the time of the decedent’s death is less than such amount in effect at the time such gift is made by the decedent, the amount of tax computed under subsection (b) shall be reduced by the amount of tax which would have been payable under chapter 12 at the time of the gift if the applicable exclusion amount in effect at such time had been the applicable exclusion amount in effect at the time of the decedent's death and the modifications described in subsection (g) had been applicable at the time of such gifts.

(2)

Limitation

The aggregate amount of gifts made in any calendar year to which the reduction under paragraph (1) applies shall not exceed the excess of—

(A)

the applicable exclusion amount in effect for such calendar year, over

(B)

the applicable exclusion amount in effect at the time of the decedent's death.

(3)

Applicable exclusion amount

The term applicable exclusion amount means, with respect to any period, the amount determined under section 2010(c) for such period, except that in the case of any period for which such amount includes the deceased spousal unused exclusion amount (as defined in section 2010(c)(4)), such term shall mean the basic exclusion amount (as defined under section 2010(c)(3), as in effect for such period).

.

(B)

Gift tax adjustment

Section 2502 is amended by adding at the end the following new subsection:

(d)

Adjustment To reflect changes in exclusion amount

(1)

In general

If the taxpayer made a taxable gift in an applicable preceding calendar period, the amount of tax computed under subsection (a) shall be reduced by the amount of tax which would have been payable under chapter 12 for such applicable preceding calendar period if the applicable exclusion amount in effect for such preceding calendar period had been the applicable exclusion amount in effect for the calendar year for which the tax is being computed and the modifications described in subsection (g) had been applicable for such preceding calendar period.

(2)

Limitation

The aggregate amount of gifts made in any applicable preceding calendar period to which the reduction under paragraph (1) applies shall not exceed the excess of—

(A)

the applicable exclusion amount for such preceding calendar period, over

(B)

the applicable exclusion amount for the calendar year for which the tax is being computed.

(3)

Applicable preceding calendar year period

The term applicable preceding calendar year period means any preceding calendar year period in which the applicable exclusion amount exceeded the applicable exclusion amount for the calendar year for which the tax is being computed.

(4)

Applicable exclusion amount

The term applicable exclusion amount means, with respect to any period, the amount determined under section 2010(c) for such period, except that in the case of any period for which such amount includes the deceased spousal unused exclusion amount (as defined in section 2010(c)(4)), such term shall mean the basic exclusion amount (as defined under section 2010(c)(3), as in effect for such period).

.

(c)

Effective date

The amendments made by this section shall apply to estates of decedents dying, and generation-skipping transfers and gifts made, after December 31, 2012.

(d)

Application of EGTRRA sunset

Section 901 of the Economic Growth and Tax Relief Reconciliation Act shall apply to the amendments made by subsection (a).

III

Alternative minimum tax relief

301.

Temporary extension of increased alternative minimum tax exemption amount

(a)

In general

Paragraph (1) of section 55(d) is amended—

(1)

by striking $72,450 and all that follows through 2011 in subparagraph (A) and inserting $78,750 in the case of taxable years beginning in 2012, and

(2)

by striking $47,450 and all that follows through 2011 in subparagraph (B) and inserting $50,600 in the case of taxable years beginning in 2012.

(b)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2011.

302.

Temporary extension of alternative minimum tax relief for nonrefundable personal credits

(a)

In general

Paragraph (2) of section 26(a) is amended—

(1)

by striking or 2011 and inserting 2011, or 2012, and

(2)

by striking 2011 in the heading thereof and inserting 2012.

(b)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2011.

IV

Budgetary effects

401.

Budgetary effects

(a)

PAYGO Scorecard

The budgetary effects of this Act shall not be entered on either PAYGO scorecard maintained pursuant to section 4(d) of the Statutory Pay-As-You-Go Act of 2010.

(b)

Senate PAYGO Scorecard

The budgetary effects of this Act shall not be entered on any PAYGO scorecard maintained for purposes of section 201 of S. Con. Res. 21 (110th Congress).

July 18, 2012

Read the second time and placed on the calendar