CHANGE IN CORPORATE TAX RATES AND INCREASE IN SURTAX EXEMPTION.

SEC. 303. CHANGE IN CORPORATE TAX RATES AND INCREASE IN SURTAX EXEMPTION. (a) Tax Rates.— Section 11(b) (relating to corporate normal tax) is amended to read as follows: “(b) Normal Tax.— The normal tax is equal to— “(1) in the case of a taxable year ending before January 1, 1975, or after December 31, 1975, 22 percent of the taxable income, and “(2) in the case of a taxable year ending after December 31, 1974, and before January 1, 1976, the sum of— “(A) 20 percent of so much of the taxable income as does not exceed $25,000, plus “(B) 22 percent of so much of the taxable income as exceeds $25,000.”. (b) Surtax Exemption.— Section 11(d) (relating to surtax exemption) is amended by striking out “$25,000” and inserting in lieu thereof “$50,000”. (c) Technical and Conforming Amendments.— (1) Paragraph (1) of section 1561(a) (as in effect for taxable years beginning after December 31, 1974) (relating to limitations on certain multiple tax benefits in the case of certain controlled corporations) is amended by striking out “$25,000” and inserting in lieu thereof “$50,000”. In applying subsection (b)(2) of section 11, the first $25,000 of taxable income and the second $25,000 of taxable income shall each be allocated among the component members of a con trolled group of corporations in the same manner as the surtax exemption is allocated. (2) Paragraph (7) of section 12 (relating to cross references for tax on corporations) is amended by striking out “$25,000” and inserting in lien thereof “$50,000”. 89 STAT. 45 (3) Section 962(c) (relating to surtax exemption for individuals electing to be subject to tax at corporate rates) is amended by striking out “$25,000” and inserting in lieu thereof “$50,000”.