Tax Justice Act

Tax Justice Act - Title I: Capital Gains and Losses - Repeals, under the Internal Revenue Code, the alternative tax for individuals and corporations. Provides for a gradual phase-out of the capital gains deduction. States that such deduction shall not apply after December 31, 1979. Establishes a new system for treatment of capital losses, carrybacks, and carryovers.

Provides that unrealized gains on capital assets held at death or transferred by gift shall be treated as long term capital gains, to the extent such amount exceeds $25,000, reduced by permitted amounts.

Permits the taxpayer to elect, with respect to any capital asset, to treat the excess of the fair market value over the adjusted basis of such asset as a long term capital gain.

Title II: Reforms Relating to Business Taxes - Terminates the investment credit for property constructed or acquired after 1976. Repeals the asset depreciation range system. Repeals the provision permitting the amortization of expenditures to rehabilitate low-income rental housing.

Sets forth limitations on farming deductions, including horse racing.

Repeals the percentage depletion allowance, the option to deduct intangible drilling costs, and specified amortization provisions.

Title III: Treatment of Foreign Source Income - Provides for taxation of amounts included in the gross income of U. S. shareholders of controlled foreign corporations. Sets forth rules for determining stockownership. Excludes previously taxed earnings and profits from gross income.

Repeals the tax exemption for Domestic International Sales Corporations (DISC). Limits the foreign tax credit in cases of foreign oil and gas income. Repeals the deductions for Western Hemisphere trade corporations. Denies special tax treatment to dividends from less developed country corporations.

Title IV: Estate and Gift Tax Amendments - Imposes estate tax rates on inter vivos gifts, and an additional tax on transfers to generation-skipping trusts. Limits charitable deductions to 50 percent with respect to the estate tax.

Title V: State and Local Obligations - Repeals the interest exemption for new issues of State and local bonds. Requires the United States to pay 50 percent of the interest yeild on such obligations.

Title VI: Provisions Relating to Individuals - Substitutes a credit in lieu of deductions for personal exemptions. Repeals the provision allowing partial exclusion of dividends. Grants a tax credit for personal deductions equivalent to 25 percent of the personal deductions for the taxable year. Disallows any deduction for the business use of the home, unless a portion of the home is used exclusively for business purposes.

Repeals the fifty-one percent maximum tax on earned income.