To amend the Internal Revenue Code of 1986 to provide economic stimulus.

January 29, 2003

Mr. HAYWORTH (for himself, Mr. CRANE, Mr. CANNON, Mr. CARTER, Mr. ISSA, Mr. WAMP, Mr. WILSON of South Carolina, Mr. PITTS, Mr. SENSENBRENNER, Mr. SOUDER, Mr. GOODE, Mr. MILLER of Florida, and Mr. SHAYS) introduced the following bill; which was referred to the Committee on Ways and Means

To amend the Internal Revenue Code of 1986 to provide economic stimulus.

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

SECTION 1. SHORT TITLE.

(a) SHORT TITLE- This Act may be cited as the `Economic Growth Act of 2003'.

(b) AMENDMENT OF 1986 CODE- Except as otherwise expressly provided, whenever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986.

SEC. 2. REDUCTION OF RATES OF TAX ON NET CAPITAL GAIN.

(a) IN GENERAL- Paragraph (1) of section 1(h) (relating to maximum capital gains rate) is amended by striking `10 percent' and inserting `0 percent' and by striking `20 percent' and inserting `10 percent'.

(b) CONFORMING AMENDMENTS-

(1) The following sections are each amended by striking `20 percent' and inserting `10 percent':

(A) Section 55(b)(3)(C).

(B) Section 1445(e)(1).

(C) The second sentence of section 7518(g)(6)(A).

(D) The second sentence of section 607(h)(6)(A) of the Merchant Marine Act, 1936.

(2) Section 311 of the Taxpayer Relief Act of 1997 is amended by striking subsection (e).

(3) Section 1(h) is amended--

(A) by striking paragraphs (2) and (9),

(B) by redesignating paragraphs (3) through (8) as paragraphs (2) through (7), respectively, and

(C) by redesignating paragraphs (10), (11), and (12) as paragraphs (8), (9), and (10), respectively.

(4) Paragraph (3) of section 55(b) is amended by striking `In the case of taxable years beginning after December 31, 2000, rules similar to the rules of section 1(h)(2) shall apply for purposes of subparagraphs (B) and (C).'.

(5) Paragraph (7) of section 57(a) is amended by striking the last sentence and by striking `42 percent' and inserting `28 percent'.

(c) EFFECTIVE DATES-

(1) IN GENERAL- Except as otherwise provided by this subsection, the amendments made by this section shall apply to taxable years beginning after December 31, 2002.

(2) WITHHOLDING- The amendment made by subsection (b)(1)(B) shall apply to amounts paid after the date of the enactment of this Act.

SEC. 3. INCREASE ON AMOUNT OF CAPITAL LOSSES WHICH MAY OFFSET ORDINARY INCOME.

(a) IN GENERAL- Paragraph (1) of section 1211(b) (relating to limitation on capital losses for taxpayers other than corporations) is amended by striking `$3,000 ($1,500' and inserting `$10,000 ( 1/2 such amount'.

(b) ADJUSTMENT FOR INFLATION- Section 1211 of such Code (relating to limitation on capital losses) is amended by adding at the end the following new subsection:

`(c) ADJUSTMENT FOR INFLATION-

`(1) IN GENERAL- In the case of any taxable year beginning in a calendar year after 2003, the $10,000 amount contained in subsection (b)(1) shall each be increased by an amount equal to--

`(A) such amount, multiplied by

`(B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins by substituting `calendar year 2002' for `calendar year 1992' in subparagraph (B) thereof.

`(2) ROUNDING- If any increase determined under paragraph (1) is not a multiple of $50, such increase shall be rounded to the next highest multiple of $50.'.

(c) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after December 31, 2002.

END