Section 1 Short title
This Act may be cited as the “Fairness in Taxation Act of 2017”.
Fairness in Taxation Act of 2017
A BILL
To amend the Internal Revenue Code of 1986 to impose increased rates of tax with respect to taxpayers with more than $1,000,000 taxable income, and for other purposes.
Sec. 2 Increased tax rates for taxpayers with more than $1,000,000 taxable income
In general—
Married individuals filing joint returns and surviving spouses— The table contained in subsection (a) of section 1 of the Internal Revenue Code of 1986 is amended to read as follows:
Heads of household— The table contained in subsection (b) of section 1 of such Code is amended to read as follows:
Unmarried individuals (other than surviving spouses and heads of households)— The table contained in subsection (c) of section 1 of such Code is amended to read as follows:
Married individuals filing separate returns— The table contained in subsection (d) of section 1 of such Code is amended to read as follows:
Inflation adjustment— Subsection (f) of section 1 of such Code is amended by adding at the end the following new paragraph:
“(9) Special rule for taxable years beginning after 2017—In prescribing the tables under paragraph (1) which apply with respect to taxable years beginning in a calendar year after 2017, the cost-of-living adjustment under paragraph (3) shall be determined by substituting “2016” for “1992” in subparagraph (B) thereof.”
Conforming amendment— Section 1 of such Code is amended by striking subsection (i).
Recapture of lower capital gains rates for individuals subject to added rate brackets—
In general— Section 1 of such Code is amended by adding at the end the following new subsection:
“(j) Special rule for capital gains in case of taxable income subject to at least 45-Percent rate bracket—If for the taxable year a taxpayer has taxable income in excess of the minimum dollar amount for the 45-percent rate bracket and has a net capital gain, then—
“(1) the tax imposed by this section for the taxable year with respect to such excess shall be determined without regard to subsection (h), and
“(2) the amount of net capital gain of the taxpayer taken into account for the taxable year under subsection (h) shall be reduced by the lesser of—
“(A) such excess, or
“(B) the net capital gain for the taxable year.”
Conforming amendment— Paragraph (1) of section 1(h) of such Code is amended by striking “If a taxpayer has” and inserting “Except to the extent provided in subsection (j), if a taxpayer has”.
Effective date— The amendments made by this section shall apply to taxable years beginning after December 31, 2016.