CHANGE IN TAX RATES AND TAX TABLES TO REFLECT PERMANENT INCREASE IN STANDARD DEDUCTION.

SEC. 101. CHANGE IN TAX RATES AND TAX TABLES TO REFLECT PERMANENT INCREASE IN STANDARD DEDUCTION. (a) Change in Tax Rates.—Section 1 (relating to tax imposed) is amended to read as follows: “SECTION 1. TAX IMPOSED. “(a) Married Individuals Filing Joint Returns and Surviving Spouses.—There is hereby imposed on the taxable income of— “(1) every married individual (as defined in section 143) who makes a single return jointly with his spouse under section 6013, and “(2) every surviving spouse (as defined in section 2(a)), a tax determined in accordance with the following table: “If the taxable income is: The tax is: Not over $3.200 No tax. Over $3,200 but not over $4,200 4% of the excess over $3,200. Over $4,200 but not over $5,200 $140, plus 15% of excess over $4,200. Over $5,200 but not over $6,200 $290, plus 16% of excess over $5,200. Over $6,200 but not over $7,200 450, plus 17% of excess over $6,200. Over $7,200 but not over $11,200 $620, plus 19% of excess over $7,200. Over $11,200 but not over $15,200 $1,380, plus 22% of excess over $11,200. Over $15,200 but not over $19,200 $2,260, plus 25% of excess over $15,200. Over $19,200 but not over $23,200 $8,260, plus 28% of excess over $19,200. Over $23,200 but not over $27,200 $4,380, plus 32% of excess over $23,200. Over $27,200 but not over $31,200 $5,660, plus 36% of excess over $27,200. Over $31,200 but not over $35,200 $7,100, plus 39% of excess over $31,200. Over $35,200 but not over $39,200 $8,660, plus 42% of excess over $35,200. Over $39,200 but not over $43,200 $10,340, plus 45% of excess over $39,200. Over $43,200 but not over $47,200 $12,140, plus 48% of excess over $43,200. Over $47,200 but not over $55,200 $14,060, plus 50% of excess over $47,200. 91 STAT. 128 “If the taxable income is: The tax is: Over $55,200 but not over $67,200 $18,060, plus 53% of excess over $55,200. Over $07,200 but not over $79,200 $24,420, plus 55% of excess over $67,200. Over $79,200 but not over $91,200 $31,020, plus 58% of excess over $79,200. Over $01,200 but not over $103,200 $37,080, plus 60% of excess over $91,200. Over $103,200 but not over $123,200 $45,180, plus 62% of excess over $103,200. Over $123,200 but not over $143,200 $57,530, plus 64% of excess over $123,200. Over $143,200 but not over $163,200 $70,380, plus 66% of excess over $143,200. Over $163,200 but not over $183,200 $83,580, plus 68% of excess over $163,200. Over $183,200 but not over $203,200 $97,180, plus 69% of excess over $183,200. Over $203,200 $110,080, plus 70% of excess over $203,200. “(b) Heads of Households.—There is hereby imposed on the taxable income of every individual who is the head of a household (as defined in section 2(b)) a tax determined in accordance with the following table: “If the taxable income is: The tax is: Not over $2.200 No tax. Over $2,200 but not over $3,200 14% of the excess over $2,200. Over $3,200 but not over $4,200 $140, plus 16% of excess over $3,200. Over $4,200 but not over $6,200 $800, plus 18% of excess over $4,200. Over $6,200 but not over $8,200 $660, plus 19% of excess over $6,200. Over $8,200 but not over $10,200 $1,040, plus 22% of excess over $8,200. Over $10,200 but not over $12,200. $1,480, plus 23% of excess over $10,200. Over $12,200 but not over $14,200 $1,940, plus 25% of excess over $12,200. Over $14,200 but not over $16,200 $2,440, plus 27% of excess over $14,200. Over $16,200 but not over $18,200 $2,980, plus 28% of excess over $16,200. Over $18,200 but not over $20,200 $3,540, plus 31% of excess over $18,200. Over $20,200 but not over $22,200 $4,160, plus 32% of excess over $20,200. Over $22,200 but not over $24,200 $4,800, plus 35% of excess over $22,200. Over $24,200 but not over $26,200 $5,500, plus 36% of excess over $24,200. Over $26,200 but not over $28,200 $6,220, plus 88% of excess over $26,200. Over $28,200 but not over $30,200 $6,980, plus 41% of excess over $28,200. Over $30,200 but not over $34,200 $7,800, plus 42% of excess over $30,200. Over $34,200 but not over $38,200 $9,480, plus 45% of excess over $34,200. Over $38,200 but not over $40,200 $11,280, plus 48% of excess over $38,200. Over $40,200 but not over $42,200 $12,240, plus 51% of excess over $40,200. Over $42,200 but not over $46,200. $13,260, plus 52% of excess over $42,200. Over $46,200 but not over $52,200 $15,340, plus 55% of excess over $46,200. 91 STAT. 129 “If the taxable income is: The tax is: Over $52,200 but not over $54,200 $18,640, pins 56% of excess over $52,200. Over $54,200 but not over $68,200 $10,760, plus 58% of excess over $54,200. Over $66,200 but not over $72,200 $26,720, plus 59% of excess over $66,200. Over $72,200 but not over $78,200 $30,260, plus 61% of excess over $72,200. Over $78,200 but not over $82,200 $33,920, plus 62% of excess over $78,200. Over $82,200 but not over $00,200 $36,400, plus 63% of excess over $82,200. Over $90,200 but not over $102,200 $41,440, plus 64% of excess over $90,200. Over $102,200 but not over $122,200 $49,120, plus 66% of excess over $102,200. Over $122,200 but not over $142,200 $62,320, plus 67% of excess over $122,200. Over $142,200 but not over $162,200 $75,720, plus 68% of excess over $142,200. Over $162,200 but not over $182,200 $89,320, plus 69% of excess over $162,200. Over $182,200 $103,120, plus 70% of excess over $182,200. “(c) Unmarried Individuals (Other Than Surviving Spouses and Heads of Households).—There is hereby imposed on the taxable income of every individual (other than a surviving spouse as defined in section 2(a) or the head of a household as defined in section 2(b)) who is not a married individual (as defined in section 143) a tax determined in accordance with the following table: “If the taxable income is: The tax is: Not over $2.201 No tax. Over $2,200 but not over $2,700 14% of the excess over $2,200. Over $2,700 but not over $3,200 $70, plus 15% of excess over $2,700, Over $3,200 but not over $3,700 $145, plus 16% of excess over $3,200. Over $3,700 but not over $4,200 $225, plus 17% of excess over $3,700. Over $4,200 but not over $6,200 $310, plus 19% of excess over $4,200. Over $6,200 but not over $8,200 $690, plus 21% of excess over $6,200. Over $8,200 but not over $10,200 $1,110, plus 24% of excess over $8,200. Over $10,200 but not over $12,200 $1,590, plus 25% of excess over $10,200. Over $12,200 but not over $14,200 $2,090, plus 27% of excess over $12,200. Over $14,200 but not over $16,200 $2,630, plus 29% of excess over $14,200. Over $16,200 but not over $18,200 $3,210, plus 31% of excess over $16,200. Over $18,200 but not over $20,200 $3,830, plus 34% of excess over $18,200. Over $20,200 but not over $22,200 $4,510, plus 36% of excess over $20,200. Over $22,200 but not over $24,200 $5,230, plus 38% of excess over $22,200. Over $24,200 but not over $28,200 $5,990, plus 40% of excess over $24,200. Over $28,200 but not over $34,200 $7,590, plus 45% of excess over $28,200. Over $34,200 but not over $40,200 $10,290, plus 50% of excess over $34,200. Over $40,200 but not over $46,200 $13,290, plus 55% of excess over $40,200. Over $46,200 but not over $52,200 $16,590, plus 60% of excess over $46,200. 91 STAT. 130 “If the taxable income is: The tax is: Over $52,200 but not over $82,200 $20,190, plus 62% of excess over $52,200. Over $82,200 but not over $72,200 $26,390, plus 64% of excess over $62,200. Over $72,200 but not over $82,200 $32,700, plus 66% of excess over $72,200. Over $82,200 but not over $92,200 $39,390, plus 68% of excess over $82,200. Over $92,200 but not over $102,200 $46,190, plug 69% of excess over $92,200. Over $102,200 $53,090, plus 70% of excess over $102,200. “(d) Married Individuals Filing Separate Returns.—There is hereby imposed on the taxable income of every married individual (as defined in section 143) who does not make a single return jointly with his spouse under section 6013 a tax determined in accordance with the following table: “If the taxable income.is: The tax is: Not over $1,600 No tax. Over $1,600 but not over $2,100 14% of the excess over $1,600. Over $2,100 but not over $2,600 $70, plus 15% of excess over $2,100. Over $2,000 but not over $3,100 $145, plus 16% of excess over $2,600. Over $3,100 but not over $3,600 $225, plus 17% of excess over S3,100. Over $3,600 but not over $5,000 $310, plus 19% of excess over $3,600. Over $5,600 but not over $7,600 $690, plus 22% of excess over $5,600. Over $7,600 but not over $9,600 $1,130, plus 25% of excess over $7,600. Over $9,600 but not over $11,600 $1,630, plus 28% of excess over $9,600. Over $11,600 but not over $13,600. $2,190, plus 32% of excess over $11,600. Over $13,600 but not over $15,600. $2,830, plus 36% of excess over $13,600. Over $15,600 but not over $17,600, $3,550, plus 39% of excess over $15,600. Over $17,600 but not over $19,600. $4,330, plus 42% of excess over $17,600. Over $19,600 but not over $21,600, $5,170, plus 45% of excess over $19,600. Over $21,600 but not over $23,600. $6,070, plus 48% of excess over $21,600. Over $23,600 but not over $27,600, $7,030, plus 50% of excess over $23,600. Over $27,600 but not over $33,600. $9,030, [tins 53% of excess over $27,600. Over $33,600 but not over $39,600, $12,210, plus 55% of excess over $33,600. Over $39,600 but not over $45,600. $15,510, plus 58% of excess over $39^600. Over $45,600 but not over $51,600. $18,990, plus 60% of excess over $45,600. Over $51,600 but not over $61,600. $22,590, plus 62% of excess over $51,600. Over $61,600 but not over $71,600. $28,790, plus 64% of excess over $61,600. Over $71,600 but not over $81,600. $35,190, plus 66% of excess over $71,600. Over $81,600 but not over $91,600. $41,790, plus 68% of excess over $81,600. Over $91,600 but not over $101,600. $48,590, plus 69% of excess over $91,600. Over $101,600 $55,490, plus 70% of excess over $101,600. 91 STAT. 131 “(e) Estates and Trusts.—There is hereby imposed on the taxable income of every estate and trust taxable under this subsection a tax determined in accordance with the following table: “If the taxable income is: The tax is: Not over $500 14% of the taxable income. Over $500 but not over $1,000 $70, plus 15% of excess over $500. Over $1,000 hut not over $1,500 $145, plus 16% of excess over $1,000. Over $1,000 but not over $2,000 $225, plus 17% of excess over $1,500. Over $2,000 but not over $4,000 $310, plus 19% of excess over $2,000. Over $4,000 but not over $6,000 $690, plus 22% of excess over $4,000. Over $6,000 but not over $8,000 $1,130, plus 25% of excess over $6,000. Over $8,000 but not over $10,000 $1,630, plus 28% of excess over $8,000. Over $10,000 but not over $12,000 $2,190, plus 32% of excess over $10,000. Over $12,000 but not over $14,000 $2,830, plus 36% of excess over $12,000. Over $14,000 but not over $16,000 $3,550, plus 39% of excess over $14,000. Over $16,000 but not over $18,000 $4,330, plus 42% of excess over $16,000. Over $18,000 but not over $20,000 $5,170, plus 45% of excess over $18,000, Over $20,000 but not over $22,000 $6,070, plus 48% of excess over $20,000. Over $22,000 but not over $20,000 $7,030, plus 50% of excess over $22,000. Over $26,000 but not over $32,000 $9,030, plus 53% of excess over $26,000. Over $32,000 but not over $38,000 $12,210, plus 55% of excess over $32,000. Over $38,000 but not over $44,000 $15,510, plus 58% of excess over $38,000. Over $44,000 but not over $50,000 $18,990, plus 60% of excess over $44,000. Over $50,000 but not over $60,000 $22,590, plus 62% of excess over $50,000. Over $60,000 but not over $70,000 $28,790, plus 64% of excess over $60,000. Over $70,000 hut not over $80,000 $35,190, plus 66% of excess over $70,000. Over $80,000 but not over $00,000 $41,790, plus 68% of excess over 880.000. Over $90,000 but not over $100,000 $48,590, plus 69% of excess over $90,000. Over $100,000 $55,490, plus 70% of excess over $100,000.” (b) Change in Tax Tables.—Section 3 (relating to tax tables for individuals having taxable income of less than $20,000) is amended to read as follows: “SEC. 3. TAX TABLES FOR INDIVIDUALS. “(a) Imposition of Tax Table Tax.— “(1) In general.—In lieu of the tax imposed by section 1, there is hereby imposed for each taxable year on the tax table income of every individual whose tax table income for such year does not exceed the ceiling amount, a tax determined under tables, applicable to such taxable year, which shall be prescribed by91 STAT. 132 the Secretary. In the tables so prescribed, the amounts of tax shall be computed on the basis of the rates prescribed by section 1. “(2) Ceiling amount defined.—For purposes of paragraph (1), the, term ‘ceiling amount’ means, with respect to any taxpayer, the amount (not less than $20,000) determined by the Secretary for the tax rate category in which such taxpayer falls. “(3) Certain taxpayers with large number of exemptions.—The Secretary may exclude from the application of this section taxpayers in any tax rate category having more than the number of exemptions for that category determined by the Secretary. “(4) Tax table income defined.— For purposes of this section, the term ‘tax table income’ means adjusted gross income— “(A) reduced by the excess itemized deductions, and “(B) increased (in the case of an individual to whom section 63(e) applies) by the unused zero bracket amount. “(b) Section Inapplicable to Certain Individuals.—This section shall not apply to— “(1) an individual to whom— “(A) section 911 (relating to earned income from sources without the United States), “(B) section 1201 (relating to alternative capital gains tax), “(C) section 1301 (relating to income averaging), or “(D) section 1348 (relating to maximum rate on personal service income), applies for the taxable year, “(2) an individual making a return under section 443(a)(1) for a period of less than 12 months on account of a change in annual accounting period, and “(3) an estate or trust. “(c) Tax Treated as Imposed by Section 1.—For purposes of this title, the tax imposed by this section shall lie treated as tax imposed by section 1. “(d) Taxable Income.—Whenever it is necessary to determine the taxable income of an individual to whom this section applies, the taxable income shall be determined under section 63. “(e) Cross Reference.— “For computation of tax by Secretary, see section 6014.” (c) Changes in General Tax Credit.— (1) Subsection (a) of section 42 (relating to allowance of general tax credit) is amended to read as follows: “(a) Allowance of Credit.—In the case of an individual, there shall be allowed as a credit against the tax imposed by section 1, or against the tax imposed in lieu of the tax imposed by section 1, for the taxable year an amount equal to the greater of— “(1) 2 percent of so much of the taxpayer’s taxable income for the taxable year (reduced by the zero bracket amount) as does not exceed $9,000; or “(2) $35 multiplied by each exemption for which the taxpayer is entitled to a deduction for the taxable year under section 151.” (2) Section 42 is amended by adding at the end thereof the following new subsection: 91 STAT. 133 “(e) Income Tax Tables To Reflect Credit.—The tables prescribed by the Secretary under section 3 shall reflect the credit allowed by this section.” (3) Subsection (c) of section 42 is amended to read as follows: “(c) Special Rule for Married Individuals Filing Separate Returns.— “(1) In general.—In the case of a married individual who files a separate return for the taxable year, the amount of the credit allowable under subsection (a) for the taxable year shall be the amount determined under paragraph (2) of subsection (a). “(2) Marital status.—For purposes of this subsection, the determination of marital status shall be made under section 143.” (4) The first sentence of subsection (b) of section 42 is amended by striking out “by this chapter” and inserting in lieu thereof the following: “by section 1, or the amount of the tax imposed in lieu of the tax imposed by section 1,”. (d) Technical and Conforming Amendments.— (1) Section 141 (relating to standard deduction), section 142 (relating to individuals not eligible for standard deduction), section 144 (relating to election or standard deduction), and section 145 (cross reference) are hereby repealed. (2) Section 21 (relating to effect of changes) is amended— (A) by striking out subsections (d) and (e), (B) by redesignating subsection (f) as subsection (d),and (C) by inserting after subsection (d) (as so redesignated) the following new subsection: “(e) Changes Made by Tax Reduction and Simplification Act of 1977.—In applying subsection (a) to a taxable year of an individual which is not a calendar year, the amendments made by sections 101 and 102 of the Tax Reduction and Simplification Act of 1977 shall not be treated as changes in a rate of tax.” (3) Section 36 (relating to credits not allowed to individuals taking standard deduction) is hereby repealed. (4) Section 143 (relating to determination of marital status) is amended by striking out “this part and” each place it appears. (5) (A) Paragraph (1) of section 57(a) (relating to items of tax preference) is amended by striking out “excess” in the heading and text and inserting in lieu thereof “adjusted”. (B) The heading of subsection (b) of section 57, and so much of paragraph (1) of such subsection as precedes subparagraph (A), are each amended by striking out “excess” and inserting in lieu thereof “adjusted”. (C) Paragraph (1) of section 57 (b) is amended— (i) by striking out subparagraph (B),and (ii) by redesignating subparagraphs (C) through (E) as subparagraphs (B) through (D), respectively. (6) Paragraph (1) of section 511(b) (relating to tax on unrelated business income of charitable, etc., trusts) is amended by striking out “section 1(d)” and inserting in lieu thereof “section” (7) Subsection (d) of section 584 (relating to common trust funds) is amended— (A) by inserting “and” at the end of paragraph (2), (B) by striking out “; and” at the end of paragraph (3) and inserting in lieu thereof a period, and (C) by striking out paragraph (4). 91 STAT. 134 (8) Subsection (a) of section 641 (relating to imposition of tax for estates and trusts) is amended by striking out “section 1(d)” and inserting in lieu thereof “section 1(e).” (9) Subsection (k) of section 642 (relating to special rules for credits and deductions of estate or trust) is amended to read as follows: “(k) Cross Reference.— “For special rule for determining the time of receipt of dividends by a beneficiary under section 652 or 662, see section 116(c)(3).” (10) Subsection (a) (2) of section 703 (relating to partnership income and deductions) is amended— (A) by striking out subparagraph (A), and (B) by redesignating subparagraphs (B) through (G) as subparagraphs (A) through (F),respectively. (11) Subsection (c) of section 873 (relating to deductions in the case of nonresident alien individuals) is amended to read as follows: “(c) Cross Reference.— “For rule that certain foreign taxes are not to be taken into account in determining deduction or credit, see section 906(b)(1).” (12) Paragraph (3) of section 931 (d) (relating to deductions in computing income from sources within possessions of the United States) is hereby repealed. (13) Subsection (a) of section 6014 (relating to tax not computed by taxpayer) is amended— (A) by striking out “entitled to take” through “section 141(e))” in the first sentence thereof and inserting in lieu thereof “who does not itemize his deductions and who does not have an unused zero bracket amount (determined under section 63(e)),”,and (B) by striking out “and shall constitute an election to take the standard deduction” in the second sentence thereof. (14) Paragraph (4) of section 6014(b) (relating to regulations) is amended to read as follows: “(4) to cases where the taxpayer itemizes his deductions or has an unused zero bracket amount.” (15) Subparagraph (A) of section 6212(c)(2) (relating to further deficiency letters restricted) is amended to read as follows: “(A) Deficiency attributable to change of treatment with respect to itemized deductions and zero bracket amount, see section 63(g) (5).” (16) Paragraph (2) of section 6504 (relating to cross references) is amended to read as follows: “(2) Change of treatment with respect to itemized deductions and zero bracket amount where taxpayer and his spouse make separate returns, see section 63(g)(5).” (e) Clerical Amendments.— (1) The table of sections for subpart A of part TV of subchapter A of chapter 1 (relating to credits allowable against tax) is amended by striking out the item relating to section 36. (2) The heading and table of sections for part IV of subchapter B of chapter 1 (relating to standard deduction for individuals) are amended to read as follows: 91 STAT. 135 “PART IV—DETERMINATION OF MARITAL STATUS “Sec. 143. Determination of marital status.” (3) The table of parts for subchapter B of chapter 1 (relating to computation of taxable income) is amended by striking out the item relating to part IV and inserting in lieu thereof the following: “Part IV. Determination of marital status.”.