Welfare Reform and Tax Reduction Act

Welfare Reform and Tax Reduction Act - Title I: Family Allowance Deduction, Standard Allowance, Family Allowance, Family Allowance Credit, and Other Tax Provisions - Amends the Internal Revenue Code to authorize a family allowance deduction in lieu of personal exemptions in computing an individual's taxable income. Stipulates that such family allowance deduction shall be a specific multiple of the authorized personal exemption in taxable years 1977 through 1981. States that after 1981, such exemption shall be two times the amount of the following exemptions: (1) $1,000 for the taxpayer; (2) $1,000 for the taxpayer's spouse; (3) $1,000 for any one dependent; (4) $400 for other dependents if such an individual's gross income for the taxable year is less than $1,000; (5) an additional $600 for a taxpayer, his spouse or dependent if such an individual is 65 years of age or older; (6) an additional $600 for a taxpayer, his spouse or dependent who is blind; and (7) an additional $600 for a taxpayer, his spouse or a dependent who is permanently and totally disabled as defined in this Act. Sets forth special rules for the taxable years 1977 through 1981.

Establishes a standard deduction allowance in the amount of specified multiples of $200 in taxable years 1971 through 1981. States that such allowance shall be two times $200 after 1981. Stipulates that the standard allowance shall be for specified exemptions allowed an individual.

States that if an individual elects to treat such standard allowance as a family allowance credit as provided for by this Act, the standard deduction shall not be allowed to such individual.

Allows individuals to take a family allowance credit equal to the sum of the family allowance credits enumerated in this Act reduced (but not below zero) by 50 percent of the amount of the "total income" as determined under this Act. States that for the taxable year 1977 such reduction shall be by 55 percent of "total income"; for 1978, 54 percent; for 1979, 53 percent; for 1980, 52 percent; and for 1981, 51 percent.

Lists the family allowance credits as follows: (1) $1,000 for the taxpayer; (2) $1,000 for a spouse or any one dependent; (3) $600 for other dependents; and (4) $600 for each individual who qualifies as an exemption because such individual is age 65 or over, blind, or disabled.

Defines "total income", for purposes of computing the family allowance credit, as the sum of adjusted gross income plus enumerated items which are not otherwise included in adjusted gross income including: (1) the proceeds of life insurance over $1,500; (2) the fair market value of inherited property over $1,000; (3) interest on tax-exempt government obligations; (4) personal injury damages which do not constitute reimbursement for medical expenses paid; (5) the entire gain from the sale of any capital asset; and (6) imputed income based on the total value of capital owned or controlled by one individual. Sets forth a method for the determination of such imputed income.

Disallows such family allowance credit with respect to any taxpayer for any period for which the taxpayer is unemployed and is not registered with the public employment offices in the State in which he resides, with specified exceptions.

Authorizes individuals entitled to a family allowance credit to receive such credit as an allowance for basic living expenses for each calendar month in an amount equal to one-twelfth of the amount of the personal credits the individual reasonably anticipates. Allows an individual, upon election, to receive such payment on a semi-monthly basis based on one-twenty fourth of the anticipated credits.

States that any determination of whether an individual is a dependent, for purposes of such credit, shall be on the basis of the allowance period (each calendar month). Sets forth criteria for considering an individual as being married or unmarried for purposes of such credit.

Sets forth procedures and information to be included in applications for the family allowance credit.

Directs the Secretary of the Treasury to establish administrative procedures to carry out the provisions of this Act. Provides for an adjustment in the amount of future credits in the event of overpayment or underpayment of an allowance paid under this Act. Requires hearing and review procedures for individuals who disagree with any determination of the amount of, or eligibility for, such an allowance.

Directs the Secretary to enter into an agreement with States which provides that the State administer the allowance program under this Act and that the Federal Government reimburse the State for administrative costs if the State has met specified requirements. Denies payments to States pursuant to title XX of the Social Security Act (Grants to States for Services) unless the State has entered into such an agreement with the Secretary.

Requires the Secretary to prepare and submit an annual report to Congress on the operation and administration of this title.

Authorizes appropriations in such sums as are necessary to make payments under this title. Authorizes appropriations of one-tenth of one percent of the amount paid as allowances under this title to be used for research into improved administration and program evaluation.

Includes as part of the definition of adjusted gross income, gross income minus the child care expenses deduction authorized under the Internal Revenue Code.

Directs the Joint Economic Committee to conduct annually a study respecting the amount of any reduction of administrative costs resulting from the provisions of this title and to make a report of such findings to Congress in order that Congress may implement a reduction in taxes equal to the amount of such reduction.

Repeals the present tax credit for the expenses of work incentive programs.

Title II: Miscellaneous, General, and Conforming Provisions - Directs the Secretary of Health, Education, and Welfare, the Secretary of Agriculture, and the Secretary of Labor to submit to the appropriate standing committees of the Senate and the House a draft of any changes in any Act over which the Secretary has administrative responsibility, which may be necessary to reflect the changes in substantive provisions of law made by this title.

Repeals the Food Stamp Act of 1964 effective with the close of December 31, 1976. Prohibits the use of Federal funds, after January 1, 1977, to defray the costs of any commodities or food distribution program where eligibility is based on family or individual income.

Repeals the following parts of title IV of the Social Security Act (Grants to States for Aid and Services to Needy Families with Children and For Child-Welfare Services): (1) Aid to Families with Dependent Children; (2) Child-Welfare Services; and (3) Work Incentive Programs for families with dependent children. States that such repealer for Aid to Families with Dependent Children shall not be applicable to Puerto Rico, Guam, and the Virgin Islands.

Repeals title XVI of the Social Security Act (Supplemental Security Income for the Aged, Blind, and Disabled).

Adds title XXI "Emergency Assistance for Needy Families with Children" to the Social Security Act. Authorizes appropriations of a sum sufficient to make payments to States which have submitted plans for emergency assistance to needy families with children.

Sets forth the requiremens which must be included in each such plan. Directs the Secretary of HEW to disapprove any plan which imposes a residency requirement as a condition of eligibility for emergency assistance. Directs the Secretary to pay to each State which has a plan approved under this title an amount equal to 50 percent of the total amount expended as emergency assistance and 50 percent of the administrative costs of such plan.

Directs the Secretary to withhold payments to a State agency if the approved plan has been changed so as to impose a residency requirement or if there has been a failure to comply with any of the requirements enumerated in this title. Defines terms for purposes of this Act including "emergency assistance to needy families with children.

Directs the Secretary of Health, Education, and Welfare to institute a food stamp program in Puerto Rico, Guam, and the Virgin Islands patterned after the eligibility for, and extent of, the Food Stamp Act of 1964. Authorizes appropriations in such sums as may be necessary to carry out such program.

Adds title XXII "Madatory State Supplementation for Certain Families with Dependent Children and Certain Aged, Blind, or Disabled Individuals" to the Social Security Act. Requires States, in order to receive payments to title X of the Social Security Act (Grants to States for Aid to the Blind) to have in effect an agreement with the Secretary of the Treasury whereby the State will provide to families with dependent children under title XXI of this Act and to aged, blind, or disabled individuals receiving benefits under title XVI of this Act, supplemental payments in amounts needed to maintain their total family income at a specified percentage level for various years of what the level would have been if the programs repealed by this Act had continued in effect.

Terminates specified housing subsidy programs under the United States Housing Act of 1937 and the National Housing Act.

Extends unemployment compensation coverage to specified agricultural and domestic workers.