INCREASE IN TOP MARGINAL RATE UNDER SECTION 1.

SEC. 13201. INCREASE IN TOP MARGINAL RATE UNDER SECTION 1. (a) General Rule.— Section 1 (relating to tax imposed) is amended by striking subsections (a) through (e) and inserting the following: “(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 7703) who makes a single return jointly with his spouse under section 6013, and “(2) every surviving spouse (as defined in section 2(a)), 107 STAT. 458a tax determined in accordance with the following table: “If taxable income is: The tax is: Not over $36,900 15% of taxable income. Over $36,900 but not over $89,150 $5,535, plus 28% of the excess over $36,900. Over $89,150 but not over $140,000 $20,165, plus 31% of the excess over $89,150. Over $140,000 $35,928.50, plus 36% of the excess over $140,000. “(b) Heads of Households.— There is hereby imposed on the taxable income of every head of a household (as defined in section 2(b)) a tax determined in accordance with the following table: “If taxable income is: The tax is: Not over $29,600 15% of taxable income. Over $29,600 but not over $76,400 $4,440, plus 28% of the excess over $29,600. Over $76,400 but not over $127,500 $17,544, plus 31% of the excess over $76,400. Over $127,500 $33,385, plus 36% of the excess over $127,500. “(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 7703) a tax determined in accordance with the following table: “If taxable income is: The tax is: Not over $22,100 15% of taxable income. Over $22,100 but not over $53,500 $3,315, plus 28% of the excess over $22,100. Over $53,500 but not over $115,000 $12,107, plus 31% of the excess over $53,500. Over $115,000 $31,172, plus 36% of the excess over $115,000. “(d) Married Individuals Filing Separate. Returns.— There is hereby imposed on the taxable income of every married individual (as defined in section 7703) who does not make a single return jointly with his spouse under section 6013, a tax determined in accordance with the following table: “If taxable income is: The tax is: Not over $18,450 15% of taxable income. Over $18,450 but not over $44,575 $2,767.50, plus 28% of the excess over $44,575. Over $44,575 but not over $70,000 $10,082.50, plus 31% of the excess over $44,575. Over $70,000 $17,964.25, plus 36% of the excess over $70,000. “(e) Estates and Trusts.— There is hereby imposed on the taxable income of— “(1) every estate, and “(2) every trust, taxable under this subsection a tax determined in accordance with the following table: “If taxable income is: The tax is: Not over $1,500 15% of taxable income. Over $1,500 but not over $3,500 $225, plus 28% of the excess over $1,500. 107 STAT. 459 “If taxable income is: The tax is: Over $3,500 but not over $5,500 $785, plus 31% of the excess over $3,500. Over $5,500 $1,405, plus 36% of the excess over $5,500.” (b) Conforming Amendments.— (1) Section 531 is amended by striking “28 percent” and inserting “36 percent”. (2) Section 541 is amended by striking “28 percent” and inserting “36 percent”. (3) (A) Subsection (f) of section 1 is amended— (i) by striking “1990” in paragraph (1) and inserting “1993”, and (ii) by striking “1989” in paragraph (3)(B) and inserting “1992”. (B) Subsection (f) of section 1 is amended by adding at the end thereof the following new paragraph: “(7) Special rule for certain brackets.— “(A) Calendar year 1994.— In prescribing the tables under paragraph (1) which apply with respect to taxable years beginning in calendar year 1994, the Secretary shall make no adjustment to the dollar amounts at which the 36 percent rate bracket begins or at which the 39.6 percent rate begins under any table contained in subsection (a), (b), (c), (d), or (e). “(B) Later calendar years.— In prescribing tables under paragraph (1) which apply with respect to taxable years beginning in a calendar year after 1994, the cost-of-living adjustment used in making adjustments to the dollar amounts referred to in subparagraph (A) shall be determined under paragraph (3) by substituting ‘1993’ for ‘1992’.” (C) Subparagraph (C) of section 41(e)(5) is amended by striking “1989” each place it appears and inserting “1992”. (D) Subparagraph (B) of section 63(c)(4) is amended by striking “1989” and inserting “1992”. (E) Subparagraph (B) of section 68(b)(2) is amended by striking “1989” and inserting “1992”. (F) Subparagraph (B) of section 132(f)(6) is amended by striking “, determined by substituting” and all that follows down through the period at the end thereof and inserting a period. (G) Subparagraphs (A)(ii) and (B)(ii) of section 151(d)(4) are each amended by striking “1989” and inserting “1992”. (H) Clause (ii) of section 513(h)(2)(C) is amended by striking “1989” and inserting “1992”. (4) Paragraph (3) of section 453A(c) is amended by adding at the end thereof the following new sentence: “For purposes of applying the preceding sentence with respect to so much of the gain which, when recognized, will be treated as long-term capital gain, the maximum rate on net capital gain under section 1(h) or 1201 (whichever is appropriate) shall be taken into account.” (c) Effective Date.— The amendments made by this section shall apply to taxable years beginning after December 31, 1992. (d) Election to Pay Additional 1993 Taxes in Installments.— 107 STAT. 460 (1) In general.— At the election of the taxpayer, the additional 1993 taxes may be paid in 3 equal installments. (2) Dates for paying installments.— In the case of any tax payable in installments by reason of paragraph (1)— (A) the first installment shall be paid on or before the due date for the taxpayer’s taxable year beginning in calendar year 1993, (B) the second installment shall be paid on or before the date 1 year after the date determined under subparagraph (A), and (C) the third installment shall be paid on or before the date 2 years after the date determined under subparagraph (A). For purposes of the preceding sentence, the term “due date” means the date prescribed for filing the taxpayer’s return determined without regard to extensions. (3) Extension without interest.— For purposes of section 6601 of the Internal Revenue Code of 1986, the date prescribed for the payment of any tax payable in installments under paragraph (1) shall be determined with regard to the extension under paragraph (1). (4) Additional 1993 taxes.— (A) In general.— For purposes of this subsection, the term “additional 1993 taxes” means the excess of— (i) the taxpayer’s net chapter 1 liability as shown on the taxpayer’s return for the taxpayer’s taxable year beginning in calendar year 1993, over (ii) the amount which would have been the tax-payer’s net chapter 1 liability for such taxable year if such liability had been determined using the rates which would have been in effect under section 1 of the Internal Revenue Code of 1986 for taxable years beginning in calendar year 1993 but for the amendments made by this section and section 13202 and such liability had otherwise been determined on the basis of the amounts shown on the taxpayer’s return. (B) Net chapter i liability.— For purposes of subparagraph (A), the term “net chapter 1 liability” means the liability for tax under chapter 1 of the Internal Revenue Code of 1986 determined— (i) after the application of any credit against such tax other than the credits under sections 31 and 34, and (ii) before crediting any payment of estimated tax for the taxable year. (5) Acceleration of payments.— If the taxpayer does not pay any installment under this section on or before the date prescribed for its payment or if the Secretary of the Treasury or his delegate believes that the collection of any amount payable in installments under this section is in jeopardy, the Secretary shall immediately terminate the extension under paragraph (1) and the whole of the unpaid tax shall be paid on notice and demand from the Secretary. (6) Election on return.— An election under paragraph (1) shall be made on the taxpayer’s return for the taxpayer’s taxable year beginning in calendar year 1993. 107 STAT. 461 (7) Exception for estates and trusts.— This subsection shall not apply in the case of an estate or trust.