American Tax Reduction Act of 1981

Summary

American Tax Reduction Act of 1981 - Title I: Individual Income Tax Rate Reductions - Amends the Internal Revenue Code to reduce individual and estate and trust income tax rates for 1981, 1982 and 1983, and to make a permanent reduction in such rates for years after 1983. Title II: Provisions Relating to Capital Gains - Reduces the alternative tax on the capital gains of corporations and individuals to 15 percent of the net capital gain. Eliminates capital gains as an item of tax preference for purposes of the minimum and maximum tax. Repeals the alternative minimum tax schedule for capital gains of individual taxpayers which was enacted by the Revenue Act of 1978. Permits a taxpayer to elect to offset against taxable income all capital losses not in excess of taxable income. Permits a one-year carryover of losses in excess of taxable income. Eliminates the age requirement (55) for eligibility for the one-time $100,000 exclusion of gain from the sale of a principal residence. Title III: Provisions Relating to Indexing for Inflation - Requires cost-of-living adjustments to income brackets for purposes of the individual income tax and the normal tax on corporate income. Requires a similar adjustment to capital assets for purposes of determining gain or loss and to estates and gifts in determining the tax at the time of transfer. Replaces the corporate income tax rates with a graduated, five-tier schedule, imposing the uppermost (46 percent) marginal rate upon income in excess of $100,000. Title IV: Reduction in Federal Spending - Amends the Congressional Budget Act of 1974 to limit Federal spending to 18 percent of the gross national product by fiscal year 1985. Prohibits the consideration of any bill in Congress which would cause the spending limit to be exceeded. Title V: Reduction of the Public Debt - Amends the Congressional Budget Act of 1974 to require the application of two percent of the annual Federal budget to the retirement of the Federal debt.

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1 official file

• Introduced in House

  summary · EN · 22 January 1981

  Open at official source

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