TITLE I—INDIVIDUAL INCOME TAX RATE REDUCTIONS
SEC. 101. REDUCTION IN INCOME TAX RATES FOR INDIVIDUALS.
(a) In General.—Section 1 (relating to tax imposed) is amended by adding at the end the following new subsection:
``(i) Rate Reductions After 2000.—
``(1) 10-percent rate bracket.—
``(A) In general.—In the case of taxable years beginning after December 31, 2000— ``(i) the rate of tax under subsections (a), (b), (c), and (d) on taxable income not over the initial bracket amount shall be 10 percent, and ``(ii) the 15 percent rate of tax shall apply only to taxable income over the initial bracket amount but not over the maximum dollar amount for the 15-percent rate bracket. ``(B) Initial bracket amount.—For purposes of this paragraph, the initial bracket amount is— ``(i) $14,000 ($12,000 in the case of taxable years beginning before January 1, 2008) in the case of subsection (a), ``(ii) $10,000 in the case of subsection (b), and ``(iii) \1/2\ the amount applicable under clause (i) (after adjustment, if any, under subparagraph (C)) in the case of subsections (c) and (d). ``(C) Inflation adjustment.—In prescribing the tables under subsection (f) which apply with respect to taxable years beginning in calendar years after 2000— ``(i) the Secretary shall make no adjustment to the initial bracket amount for any taxable year beginning before January 1, 2009, ``(ii) the cost-of-living adjustment used in making adjustments to the initial bracket amount for any taxable year beginning after December 31, 2008, shall be determined under subsection (f)(3) by substituting `2007' for `1992' in subparagraph (B) thereof, and ``(iii) such adjustment shall not apply to the amount referred to in subparagraph (B)(iii). ``If any amount after adjustment under the preceding sentence is not a multiple of $50, such amount shall be rounded to the next lowest multiple of $50. ``(D) Coordination with acceleration of 10 percent rate bracket benefit for 2001.—This paragraph shall not apply to any taxable year to which section 6428 applies. ``(2) Reductions in rates after june 30, 2001.—In the case of taxable years beginning in a calendar year after 2000, the corresponding percentage specified for such calendar year in the following table shall be substituted for the otherwise applicable tax rate in the tables under subsections (a), (b), (c), (d), and (e). ------------------------------------------------------------------------ The corresponding percentages ``In the case of shall be substituted for the taxable years following percentages: beginning during ----------------------------------- calendar year: 28% 31% 36% 39.6% ------------------------------------------------------------------------ 2001.................. 27.5% 30.5% 35.5% 39.1% 2002 and 2003......... 27.0% 30.0% 35.0% 38.6% 2004 and 2005......... 26.0% 29.0% 34.0% 37.6% 2006 and thereafter... 25.0% 28.0% 33.0% 35.0% -----------------------------------------------------------------------
``(3) Adjustment of tables.—The Secretary shall adjust the tables prescribed under subsection (f) to carry out this subsection.''.
(b) Acceleration of 10 Percent Rate Bracket Benefit for 2001.—
(1) In general.—Subchapter B of chapter 65 (relating to abatements, credits, and refunds) is amended by adding at the end the following new section:
``SEC. 6428. ACCELERATION OF 10 PERCENT INCOME TAX RATE BRACKET BENEFIT FOR 2001.