[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 1336 Introduced in Senate (IS)]
1st Session
S. 1336
To amend the Internal Revenue Code of 1986 to reduce the maximum
capital gains rates for individual taxpayers and to reduce the holding
period for long-term capital gain treatment to 1 month, and for other
purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
August 2, 2001
Mr. Miller introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to reduce the maximum
capital gains rates for individual taxpayers and to reduce the holding
period for long-term capital gain treatment to 1 month, 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. REDUCTION OF MAXIMUM CAPITAL GAINS RATES FOR INDIVIDUALS.
(a) In General.--Section 1(h) of the Internal Revenue Code of 1986
(relating to maximum capital gains rate) is amended to read as follows:
``(h) Maximum Capital Gains Rate.--
``(1) In general.--If a taxpayer has a net capital gain for
any taxable year, the tax imposed by this section for such
taxable year shall not exceed the sum of--
``(A) a tax computed on taxable income reduced by
the net capital gain, at the rates and in the same
manner as if this subsection had not been enacted,
``(B) 7.5 percent of so much of the taxpayer's net
capital gain (or, if less, taxable income) as does not
exceed the excess (if any) of--
``(i) the amount of taxable income which
would (without regard to this paragraph) be
taxed at a rate of 15 percent or less, over
``(ii) the amount on which tax is
determined under subparagraph (A), plus
``(C) 15 percent of the taxpayer's net capital gain
(or, if less, taxable income) in excess of the amount
of capital gain on which tax is determined under
subparagraph (B).
``(2) Net capital gain taken into account as investment
income.--For purposes of this subsection, the net capital gain
for any taxable year shall be reduced (but not below zero) by
the amount which the taxpayer elects to take into account as
investment income for the taxable year under section
163(d)(4)(B)(iii).''.
(b) Minimum Tax.--Subparagraph (A) of section 55(b)(1) of the
Internal Revenue Code of 1986 (relating to amount of tentative tax) is
amended by redesignating clauses (ii) and (iii) as clauses (iii) and
(iv), respectively, and by inserting after clause (i) the following new
clause:
``(ii) Maximum rate of tax on net capital
gain.--The amount determined under the first
sentence of clause (i) shall not exceed the sum
of--
``(I) the amount determined under
such first sentence computed at the
rates and in the same manner as if this
clause had not been enacted on the
taxable excess reduced by the net
capital gain, plus
``(II) a tax of 15 percent of the
lesser of the net capital gain or the
taxable excess.''
(2) Conforming amendment.--Section 55(b) of such Code is
amended by striking paragraph (3).
(c) Conforming Amendments.--
(1) Paragraph (1) of section 1445(e) of the Internal
Revenue Code of 1986 is amended by striking ``20 percent'' and
inserting ``15 percent''.
(2)(A) The second sentence of section 7518(g)(6)(A) is
amended by striking ``20 percent'' and inserting ``15
percent''.
(B) The second sentence of section 607(h)(6)(A) of the
Merchant Marine Act, 1936 is amended by striking ``20 percent''
and inserting ``15 percent''.
(d) Effective Dates.--
(1) In general.--The amendments made by this section shall
apply to taxable years ending after December 31, 2001.
(2) Withholding.--The amendment made by subsection (c)(1)
shall apply to amounts paid after the date of the enactment of
this Act.
SEC. 2. DECREASE IN HOLDING PERIOD REQUIRED FOR LONG-TERM CAPITAL GAIN
TREATMENT.
(a) In General.--
(1) Capital gain.--Paragraphs (1) and (3) of section 1222
of the Internal Revenue Code of 1986 (relating to other terms
relating to capital gains and losses) are each amended by
striking ``1 year'' and inserting ``1 month''.
(2) Capital losses.--Paragraphs (2) and (4) of section 1222
of such Code are each amended by striking ``1 year'' and
inserting ``1 month''.
(b) Conforming Amendments.--The following provisions of the
Internal Revenue Code of 1986 are each amended by striking ``1 year''
each place it appears and inserting ``1 month'':
(1) Section 166(d)(1)(B).
(2) Section 422(a)(1).
(3) Section 423(a)(1).
(4) Section 584(c).
(5) Subsections (b) and (c) of section 631.
(6) Section 642(c)(3).
(7) Paragraphs (1) and (2) of section 702(a).
(8) Section 818(b)(1).
(9) Section 852(b)(3)(B).
(10) Section 857(b)(3)(B).
(11) Paragraphs (11) and (12) of section 1223.
(12) Section 1231.
(13) Subsections (b), (d), and (e)(4)(A) of section 1233.
(14) Section 1234(b)(1).
(15) Section 1235(a).
(16) Section 1246(a)(4).
(17) Section 1247(i).
(18) Subsections (b) and (g)(2)(C) of section 1248.
(c) Technical Amendment.--The first sentence of section 631(a) of
the Internal Revenue Code of 1986 is amended by striking ``for a period
of more than one year'' and inserting ``on the first day of such year
and for a period of more than 1 month before such cutting''.
(d) Effective Date.--The amendments made by this section shall
apply to dispositions after December 31, 2001.
<all>
Introduced in Senate
Read twice and referred to the Committee on Finance.
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