Title II — Tax Reform

“(i) Post-2012 rate table

“(1) In general—In the case of taxable years beginning after December 31, 2012, the following table shall apply in lieu of the tables under subsections (a), (b), (c), (d), and (e):

“(2) Inflation adjustment

“(A) In general—In the case of any taxable year beginning after 2013, the Secretary shall prescribe, in the same manner as under subsection (f), a table which shall apply in lieu of the table under paragraph (1), except that subsection (f)(3)(B) shall be applied by substituting “2012” for “1992”.”

“(1) In general—If a taxpayer has a net capital gain for any taxable year, the tax imposed by this section for such taxable year shall not exceed the sum of—

“(A) a tax computed at the rates and in the same manner as if this subsection had not been enacted on taxable income reduced by the net capital gain;

“(B) 0 percent of so much of the net capital gain as does not exceed $1,000,000; and

“(C) 20 percent of so much of net capital gain as exceeds $1,000,000.”

“(f) Election—The taxpayer may elect to apply this section to—

“(1) the taxpayer’s last taxable year which begins before the date of the enactment of this subsection, or

“(2) the taxpayer’s first taxable year which begins during the 1-year period beginning on such date.”

“(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.”

“(4) Reduction in benefits for failure to maintain employment levels

“(A) In general—If, during the period consisting of the calendar month in which the taxpayer first receives a distribution described in subsection (a)(1) and the succeeding 23 calendar months, the taxpayer does not maintain an average employment level at least equal to the taxpayer’s prior average employment, an additional amount equal to $25,000 multiplied by the number of employees by which the taxpayer’s average employment level during such period falls below the prior average employment (but not exceeding the aggregate amount allowed as a deduction pursuant to subsection (a)(1)) shall be taken into income by the taxpayer during the taxable year that includes the final day of such period.

“(B) Average employment level—For purposes of this paragraph, the taxpayer’s average employment level for a period shall be the average number of full-time United States employees of the taxpayer, measured at the end of each month during the period.

“(C) Prior average employment—For purposes of this paragraph, the taxpayer’s “prior average employment” shall be the average number of full-time United States employees of the taxpayer during the period consisting of the 24 calendar months immediately preceding the calendar month in which the taxpayer first receives a distribution described in subsection (a)(1).

“(D) Full-time united states employee—For purposes of this paragraph—

“(i) In general—The term “full-time United States employee” means an individual who provides services in the United States as a full-time employee, based on the employer’s standards and practices; except that regardless of the employer’s classification of the employee, an employee whose normal schedule is 40 hours or more per week is considered a full-time employee.

“(ii) Exception for changes in ownership of trades or businesses—Such term does not include—

“(I) any individual who was an employee, on the date of acquisition, of any trade or business acquired by the taxpayer during the 24-month period referred to in subparagraph (A); and

“(II) any individual who was an employee of any trade or business disposed of by the taxpayer during the 24-month period referred to in subparagraph (A) or the 24-month period referred to in subparagraph (C).

“(E) Aggregation rules—In determining the taxpayer’s average employment level and prior average employment, all domestic members of a controlled group shall be treated as a single taxpayer.”

“(v) the lease, rental, license, sale, exchange, or other disposition of coal, lignite, or oil shale.”

“(f) Termination—After the date of the enactment of the Bowles-Simpson Plan of Lowering America’s Debt Act, this section and section 611 shall not apply to any oil or gas well.”

“(f) Termination—This section shall not apply to any sales or exchanges after the date of the enactment of this Act.”

“(e) Termination—This section shall not apply to amount paid or incurred after the date of the enactment of the Implementation of Simpson-Bowles Spending Reductions Act of 2012.”