H.R. 2078 - Jump Start America Act of 2017

115TH CONGRESS
1ST SESSION

H.R. 2078

To amend the Internal Revenue Code of 1986 to simplify individual income
and corporate tax rates, to set a maximum on the capital gains rate,
to make permanent the deduction for dividends received for repatriated
foreign earnings, to reduce the rate of payroll and self-employment
taxes, to make 100-percent bonus depreciation permanent,
and to repeal the Federal estate and gift taxes.

IN THE HOUSE OF REPRESENTATIVES

APRIL 6, 2017

Mr. WILLIAMS introduced the following bill; which was
referred to the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to simplify individual income and corporate tax rates, to set a maximum on the capital gains rate, to make permanent the deduction for dividends received for repatriated foreign earnings, to reduce the rate of payroll and self-employment taxes, to make 100-percent bonus depreciation permanent, and to repeal the Federal estate and gift taxes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) SHORT TITLE. — This Act may be cited as the ‘‘Jump Start America Act of 2017’’.

(b) TABLE OF CONTENTS. — The table of contents for this Act is as follows:

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Sec. 1. Short title; table of contents.

TITLE I — SIMPLIFIED INDIVIDUAL INCOME TAX RATES

Sec. 101. Simplified individual income tax rates.

TITLE II — 20-PERCENT CORPORATE TAX RATE

Sec. 201. 20-percent corporate tax rate.

TITLE III — 15-PERCENT MAXIMUM CAPITAL GAINS RATE

Sec. 301. 15-percent maximum capital gains rate.

TITLE IV — MODIFICATION AND PERMANENT EXTENSION OF THE INCENTIVES TO
REINVEST FOREIGN EARNINGS IN THE UNITED STATES

Sec. 401. Modification and permanent extension of the incentives to reinvest foreign earnings in the United States.

TITLE V — BONUS DEPRECIATION INCREASED TO 100 PERCENT AND MADE PERMANENT

Sec. 501. Bonus depreciation increased to 100 percent and made permanent.

TITLE VI — FICA AND SECA TAX RATE REDUCTIONS

Sec. 601. FICA tax rate reductions.

Sec. 602. SECA tax rate reductions.

TITLE VII — REPEAL OF ESTATE AND GIFT TAXES

Sec. 701. Repeal of estate and gift taxes.

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TITLE I — SIMPLIFIED INDIVIDUAL INCOME TAX RATES

SEC. 101. SIMPLIFIED INDIVIDUAL INCOME TAX RATES.

(a) IN GENERAL. — Section 1(i) of the Internal Revenue Code of 1986 is amended by striking paragraphs (2) and (3), by redesignating paragraph (4) as paragraph (3), and by inserting after paragraph (1) the following new paragraph:

‘‘(2) 20- AND 30-PERCENT RATE BRACKETS. —

‘‘(A) IN GENERAL. — In the case of taxable years beginning after December 31, 2015, the rate of tax under subsections (a), (b), (c), and (d) on taxable income which would (without regard to this paragraph) be taxed at a rate over 15 percent shall be —

‘‘(i) 20 percent on taxable income not over $1,000,000, and

‘‘(ii) 30 percent on taxable income over $1,000,000.

‘‘(B) INFLATION ADJUSTMENT. — In prescribing the tables under subsection (f) which apply with respect to taxable years beginning after 2016, the $1,000,000 amount in subparagraph (A) shall be increased by an amount equal to —

‘‘(i) such dollar amount, multiplied by

‘‘(ii) the cost-of-living adjustment determined under subsection (f)(3) for the calendar year in which the taxable year begins determined by substituting ‘calendar year 2015’ for ‘calendar year 1992’ in subparagraph (B) thereof.

If any adjustment under the preceding sentence is not a multiple of $100, such amount shall be rounded to the next lowest multiple of $100.’’.

(b) EFFECTIVE DATE. — The amendments made by this section shall apply to taxable years beginning after December 31, 2017.

TITLE II — 20-PERCENT CORPORATE TAX RATE

SEC. 201. 20-PERCENT CORPORATE TAX RATE.

(a) IN GENERAL. — Subsection (b) of section 11 of the Internal Revenue Code of 1986 is amended to read as follows:

‘‘(b) AMOUNT OF TAX. — The amount of the tax imposed by subsection (a) shall be 20 percent of taxable income.’’.

(b) CONFORMING AMENDMENTS. —

(1) Paragraphs (2)(B) and (6)(A)(ii) of section 860E(e) of such Code are each amended by striking ‘‘section 11(b)(1)’’ and inserting ‘‘section 11(b)’’.

(2)(A) Section 1445(e)(1) of such Code is amended —

(i) by striking ‘‘35 percent’’ and inserting ‘‘the rate of tax in effect for the taxable year under section 11(b)’’, and

(ii) by striking ‘‘of the gain’’ and inserting ‘‘multiplied by the gain’’.

(B) Section 1445(e)(2) of such Code is amended by striking ‘‘35 percent of the amount’’ and inserting ‘‘the rate of tax in effect for the taxable year under section 11(b) multiplied by the amount’’.

(C) Section 1445(e)(6) of such Code is amended —

(i) by striking ‘‘35 percent’’ and inserting ‘‘the rate of tax in effect for the taxable year under section 11(b)’’, and

(ii) by striking ‘‘of the amount’’ and inserting ‘‘multiplied by the amount’’.

(D) Section 1446(b)(2)(B) of such Code is amended by striking ‘‘section 11(b)(1)’’ and inserting ‘‘section 11(b)’’.

(3) Section 852(b)(1) of such Code is amended by striking the last sentence.

(4) Section 7874(e)(1)(B) of such Code is amended by striking ‘‘section 11(b)(1)’’ and inserting ‘‘section 11(b)’’.

(c) EFFECTIVE DATE. —

(1) IN GENERAL. — Except as otherwise provided in this subsection, the amendments made by this section shall apply to taxable years beginning after December 31, 2017.

(2) WITHHOLDING. — The amendments made by subsection (b)(2) shall apply to distributions made after December 31, 2017.

TITLE III — 15-PERCENT MAXIMUM CAPITAL GAINS RATE

SEC. 301. 15-PERCENT MAXIMUM CAPITAL GAINS RATE.

(a) IN GENERAL. — Section 1(h)(1) of the Internal Revenue Code of 1986 is amended by striking subparagraphs (C) and (D), by redesignating subparagraphs (E) and (F) as subparagraphs (D) and (E), respectively, and by inserting after subparagraph (B) the following new subparagraph:

‘‘(C) 15 percent of the adjusted net capital gain (or, if less, taxable income) in excess of the amount on which a tax is determined under subparagraph (B).’’.

(b) EFFECTIVE DATE. — The amendments made by this section shall apply to taxable years beginning after December 31, 2017.

TITLE IV — MODIFICATION AND PERMANENT EXTENSION OF THE INCENTIVES TO REINVEST FOREIGN EARNINGS IN THE UNITED STATES

SEC. 401. MODIFICATION AND PERMANENT EXTENSION OF THE INCENTIVES TO REINVEST FOREIGN EARNINGS IN THE UNITED STATES.

(a) REPATRIATION SUBJECT TO 5-PERCENT TAX RATE. — Section 965(a)(1) of the Internal Revenue Code of 1986 is amended by striking ‘‘85 percent’’ and inserting ‘‘85.7 percent’’.

(b) PERMANENT EXTENSION TO ELECT REPATRIATION. — Section 965(f) of such Code is amended to read as follows:

‘‘(f) ELECTION. — The taxpayer may elect to apply this section to any taxable year only if made on or before the due date (including extensions) for filing the return of tax for such taxable year.’’.

(c) REPATRIATION INCLUDES CURRENT AND ACCUMULATED FOREIGN EARNINGS. —

(1) IN GENERAL. — Section 965(b)(1) of such Code is amended to read as follows:

‘‘(1) IN GENERAL. — The amount of dividends taken into account under subsection (a) shall not exceed the sum of the current and accumulated earnings and profits described in section 959(c)(3) for the year a deduction is claimed under subsection (a), without diminution by reason of any distributions made during the election year, for all controlled foreign corporations of the United States shareholder.’’.

(2) CONFORMING AMENDMENTS. —

(A) Section 965(b) of such Code is amended by striking paragraph (2) and by redesignating paragraphs (3) and (4) as paragraphs (2) and (3), respectively.

(B) Section 965(c) of such Code is amended by striking paragraphs (1) and (2) and by redesignating paragraphs (3), (4), and (5) as paragraphs (1), (2), and (3), respectively.

(C) Section 965(c)(3) of such Code, as redesignated by subparagraph (B), is amended to read as follows:

‘‘(3) CONTROLLED GROUPS. — All United States shareholders which are members of an affiliated group filing a consolidated return under section 1501 shall be treated as one United States shareholder.’’.

(d) CLERICAL AMENDMENTS. —

(1) The heading for section 965 of such Code is amended by striking ‘‘TEMPORARY’’.

(2) The table of sections for subpart F of part III of subchapter N of chapter 1 of such Code is amended by striking ‘‘Temporary dividends’’ and inserting ‘‘Dividends’’.

(e) EFFECTIVE DATE. — The amendments made by this section shall apply to taxable years ending after the date of the enactment of this Act.

TITLE V — BONUS DEPRECIATION INCREASED TO 100 PERCENT AND MADE PERMANENT

SEC. 501. BONUS DEPRECIATION INCREASED TO 100 PERCENT AND MADE PERMANENT.

(a) INCREASE. — Section 168(k)(1)(A) of the Internal Revenue Code of 1986 is amended by striking ‘‘50 percent’’ and inserting ‘‘100 percent’’.

(b) MADE PERMANENT. — Section 168(k)(2) of the Internal Revenue Code of 1986 is amended to read as follows:

‘‘(2) QUALIFIED PROPERTY. — For purposes of this subsection —

‘‘(A) IN GENERAL. — The term ‘qualified property’ means property —

‘‘(i)(I) to which this section applies which has a recovery period of 20 years or less,

‘‘(II) which is computer software (as defined in section 167(f)(1)(B)) for which a deduction is allowable under section 167(a) without regard to this subsection,

‘‘(III) which is water utility property, or

‘‘(IV) which is qualified leasehold improvement property, and

‘‘(ii) the original use of which commences with the taxpayer.

‘‘(B) EXCEPTION FOR ALTERNATIVE DEPRECIATION PROPERTY. — The term ‘qualified property’ shall not include any property to which the alternative depreciation system under subsection (g) applies, determined —

‘‘(i) without regard to paragraph (7) of subsection (g) (relating to election to have system apply), and

‘‘(ii) after application of section 280F(b) (relating to listed property with limited business use).

‘‘(C) SPECIAL RULES. —

‘‘(i) SALE-LEASEBACKS. — For purposes of clause (ii) and subparagraph (A)(ii), if property is —

‘‘(I) originally placed in service by a person, and

‘‘(II) sold and leased back by such person within 3 months after the date such property was originally placed in service,

such property shall be treated as originally placed in service not earlier than the date on which such property is used under the leaseback referred to in subclause (II).

‘‘(ii) SYNDICATION. — For purposes of subparagraph (A)(ii), if —

‘‘(I) property is originally placed in service by the lessor of such property,

‘‘(II) such property is sold by such lessor or any subsequent purchaser within 3 months after the date such property was originally placed in service (or, in the case of multiple units of property subject to the same lease, within 3 months after the date the final unit is placed in service, so long as the period between the time the first unit is placed in service and the time the last unit is placed in service does not exceed 12 months), and

‘‘(III) the user of such property after the last sale during such 3-month period remains the same as when such property was originally placed in service,

such property shall be treated as originally placed in service not earlier than the date of such last sale.

‘‘(D) COORDINATION WITH SECTION 280F. — For purposes of section 280F —

‘‘(i) AUTOMOBILES. — In the case of a passenger automobile (as defined in section 280F(d)(5)) which is qualified property, the Secretary shall increase the limitation under section 280F(a)(1)(A)(i) by $8,000.

‘‘(ii) LISTED PROPERTY. — The deduction allowable under paragraph (1) shall be taken into account in computing any recapture amount under section 280F(b)(2).

‘‘(iii) INFLATION ADJUSTMENT. — In the case of any taxable year beginning in a calendar year after 2018, the $8,000 amount in clause (i) shall be increased by an amount equal to —

‘‘(I) such dollar amount, multiplied by

‘‘(II) the automobile price inflation adjustment determined under section 280F(d)(7)(B)(i) for the calendar year in which such taxable year begins by substituting ‘2017’ for ‘1987’ in subclause (II) thereof.

If any increase under the preceding sentence is not a multiple of $100, such increase shall be rounded to the nearest multiple of $100.

‘‘(E) DEDUCTION ALLOWED IN COMPUTING MINIMUM TAX. — For purposes of determining alternative minimum taxable income under section 55, the deduction under section 167 for qualified property shall be determined without regard to any adjustment under section 56.’’.

(c) EFFECTIVE DATE. — The amendments made by this section shall apply to property placed in service after December 31, 2017.

TITLE VI — FICA AND SECA TAX RATE REDUCTIONS

SEC. 601. FICA TAX RATE REDUCTIONS.

(a) OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE. — Sections 3101(a) and 3111(a) of the Internal Revenue Code of 1986 are each amended by striking ‘‘6.2 percent’’ and inserting ‘‘3.1 percent’’.

(b) HOSPITAL INSURANCE. —

(1) EMPLOYEES. — Section 3101(b) of such Code is amended —

(A) by striking ‘‘1.45 percent’’ in paragraph (1) and inserting ‘‘0.725 percent’’, and

(B) by striking ‘‘0.9 percent’’ in paragraph (2) and inserting ‘‘0.45 percent’’.

(2) EMPLOYERS. — Section 3111(b) of such Code is amended by striking ‘‘1.45 percent’’ and inserting ‘‘0.725 percent’’.

(c) EFFECTIVE DATE. — The amendments made by this section shall apply remuneration paid after December 31, 2017.

SEC. 602. SECA TAX RATE REDUCTIONS.

(a) OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE. — Section 1401(a) of the Internal Revenue Code of 1986 is amended —

(1) by striking all that follows ‘‘for such taxable year’’ and inserting a period, and

(2) by striking ‘‘the following percent’’ and inserting ‘‘6.2 percent’’.

(b) HOSPITAL INSURANCE. — Section 1401(b) of such Code is amended —

(1) by striking all that follows ‘‘for such taxable year’’ in paragraph (1) and inserting a period,

(2) by striking ‘‘the following percent’’ in paragraph (1) and inserting ‘‘1.45 percent’’, and

(3) by striking ‘‘0.9 percent’’ in paragraph (2)(A) and inserting ‘‘0.45’’.

(c) EFFECTIVE DATE. — The amendments made by this section shall apply with respect to remuneration received after December 31, 2017.

TITLE VII — REPEAL OF ESTATE AND GIFT TAXES

SEC. 701. REPEAL OF ESTATE AND GIFT TAXES.

(a) IN GENERAL. — Subtitle B of the Internal Revenue Code of 1986 (relating to estate, gift, and generation-skipping taxes) is hereby repealed.

(b) EFFECTIVE DATE. — The repeal made by subsection (a) shall apply to estates of decedents dying, gifts made, and generation-skipping transfers made after the date of the enactment of this Act.