text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Taxpayer Choice Act of 2007''.
  
  SEC. 2. REPEAL OF ALTERNATIVE MINIMUM TAX FOR NONCORPORATE TAXPAYERS.
  
      (a) In General.--Section 55(a) of the Internal Revenue Code of 1986 
  (relating to alternative minimum tax imposed) is amended by adding at 
  the end the following new flush sentence:
  ``In the case of a taxpayer other than a corporation, no tax shall be 
  imposed by this section for any taxable year beginning after December 
  31, 2006, and the tentative minimum tax of any taxpayer other than a 
  corporation for any such taxable year shall be zero for purposes of 
  this title.''.
      (b) Conforming Amendments.--
              (1) Section 26(c) of such Code is amended by striking ``the 
          term `tentative minimum tax' means the amount determined under 
          section 55(b)(1)'' and inserting ``the tentative minimum tax is 
          zero.''.
              (2) Section 911(f)(2) of such Code is amended to read as 
          follows:
              ``(2) the tentative minimum tax under section 55 for the 
          taxable year shall be zero.''.
      (c) Effective Date.--The amendments made by this section shall 
  apply to taxable years beginning after December 31, 2006.
  
  SEC. 3. SIMPLIFIED INDIVIDUAL INCOME TAX SYSTEM.
  
      (a) In General.--Part I of subchapter A of chapter 1 of the 
  Internal Revenue Code of 1986 (relating to tax on individuals) is 
  amended by redesignating section 5 as section 6 and by inserting after 
  section 4 the following new section:
  
  ``SEC. 5. SIMPLIFIED INDIVIDUAL INCOME TAX SYSTEM.
  
      ``(a) Election.--
              ``(1) In general.--A taxpayer other than a corporation may 
          elect in accordance with this subsection to be subject to the 
          tax imposed by this section in lieu of the tax imposed by 
          section 1 for a taxable year and all subsequent taxable years.
              ``(2) Effect of election.--For purposes of this title, if 
          an election is in effect under paragraph (1) for any taxable 
          year, the tax imposed by this section shall be treated as the 
          tax imposed by section 1 for the taxable year.
              ``(3) Election.--
                      ``(A) In general.--
                              ``(i) In general.--Except as provided in 
                          clause (ii) of this subparagraph and clauses 
                          (ii) and (iii) of subparagraph (B), the 
                          election under paragraph (1) may only be made 
                          with respect to any taxable year beginning 
                          before January 1, 2017, on a timely filed 
                          return for the first taxable year for which the 
                          election applies.
                              ``(ii) New taxpayers.--In the case of an 
                          individual with no tax liability under this 
                          title before January 1, 2017, the election 
                          under paragraph (1) may only be made for the 
                          first taxable year beginning after December 31, 
                          2016, for which such individual has tax 
                          liability under this title.
                      ``(B) Effect of election.--
                              ``(i) In general.--Except as provided in 
                          clauses (ii) and (iii), the election under 
                          paragraph (1), once made, shall be irrevocable.
                              ``(ii) One-time revocation of election.--A 
                          taxpayer may revoke an election under paragraph 
                          (1) for a taxable year and all subsequent 
                          taxable years. The preceding sentence shall not 
                          apply if the taxpayer has made a revocation 
                          under such sentence for any prior taxable year.
                              ``(iii) Filing status changes due to major 
                          life events.--In the case of any major life 
                          event described in clause (iv), a taxpayer may 
                          make an election under paragraph (1) or revoke 
                          such an election under clause (ii). Any such 
                          election or revocation shall apply for the 
                          taxable year for which made and all subsequent 
                          taxable years until the taxpayer makes an 
                          election under the preceding sentence for any 
                          subsequent (and all succeeding) taxable year.
                              ``(iv) Major life event.--For purposes of 
                          clause (iii), a major life event described in 
                          this clause is marriage, divorce, and death.
      ``(b) Tax Imposed.--
              ``(1) Married individuals and surviving spouses.--In the 
          case of a taxpayer for whom an election under subsection (a) is 
          in effect and who is a married individual (as defined in 
          section 7703) who makes a single return jointly with his spouse 
          under section 6013 or a surviving spouse (as defined in section 
          2(a)), there is hereby imposed on the alternative taxable 
          income of such individual a tax determined in accordance with 
          the following table:
  
  ``If taxable income is:             The tax is:
      Not over $100,000..............
                                          10% of alternative taxable 
                                                  income. 
      Over $100,000..................
                                          $10,000, plus 25% of the excess 
                                                  over $100,000.
              ``(2) Unmarried individuals (other than surviving 
          spouses).--In the case of a taxpayer for whom an election under 
          subsection (a) is in effect and who is not described in 
          paragraph (1), there is hereby imposed on the alternative 
          taxable income of such individual a tax determined in 
          accordance with the following table:
  
  ``If taxable income is:             The tax is:
      Not over $50,000...............
                                          10% of alternative taxable 
                                                  income. 
      Over $50,000...................
                                          $5,000, plus 25% of the excess 
                                                  over $50,000.
      ``(c) Maximum of Tax on Net Capital Gain of Noncorporate 
  Taxpayers.--If a taxpayer has a net capital gain for the taxable year, 
  the tax imposed by subsection (b) for such taxable year shall not 
  exceed the sum of--
              ``(1) the amount determined under subsection (b) computed 
          at the rate and in the same manner as if this paragraph had not 
          been enacted on modified taxable income reduced by the lesser 
          of--
                      ``(A) the net capital gain, or
                      ``(B) the adjusted net capital gain, plus
              ``(2) 5 percent (0 percent in the case of taxable years 
          beginning after 2007) of so much of the adjusted net capital 
          gain (or, if less, modified taxable income) as does not exceed 
          an amount equal to the excess described in section 1(h)(1)(B), 
          plus
              ``(3) 15 percent of the adjusted net capital gain (or, if 
          less, modified taxable income) in excess of the amount on which 
          tax is determined under paragraph (2).
  Terms used in this paragraph which are also used in section 1(h) shall 
  have the respective meanings given such terms by section 1(h) but 
  computed with the adjustments under this section.
      ``(d) Alternative Taxable Income.--For purposes of this section--
              ``(1) In general.--The term `alternative taxable income' 
          means--
                      ``(A) gross income, minus
                      ``(B) the sum of--
                              ``(i) the personal exemption,
                              ``(ii) the dependent allowance, plus
                              ``(iii) the alternative standard deduction.
              ``(2) Personal exemption.--The personal exemption is--
                      ``(A) 200 percent of the dollar amount in effect 
                  under subparagraph (B) in the case of--
                              ``(i) a joint return, or
                              ``(ii) a surviving spouse (as defined in 
                          section 2(a)), and
                      ``(B) $3,500 in the case of an individual--
                              ``(i) who is not married and is not a 
                          surviving spouse, or
                              ``(ii) who is a married individual filing a 
                          separate return.
              ``(3) Dependent allowance.--The dependent allowance is 
          $3,500 for each dependent (as defined in section 152).
              ``(4) Alternative standard deduction.--The alternative 
          standard deduction means--
                      ``(A) $25,000 in the case of--
                              ``(i) a joint return, or
                              ``(ii) a surviving spouse (as defined in 
                          section 2(a)), and
                      ``(B) $12,500 in the case of an individual--
                              ``(i) who is not married and is not a 
                          surviving spouse, or
                              ``(ii) who is a married individual filing a 
                          separate return.
      ``(e) Inflation Adjustments.--
              ``(1) In general.--In the case of any taxable year 
          beginning in a calendar year after 2007, each of the dollar 
          amounts for the rate brackets in subsection (b) and each of the 
          dollar amounts in subsection (d)(2)(B), (d)(3), and (d)(4) 
          shall be increased by an amount equal to--
                      ``(A) such dollar 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 
                  2006' for `calendar year 1992' in subparagraph (B) 
                  thereof.
              ``(2) Rounding.--If any amount as adjusted under clause (i) 
          is not a multiple of $100, such amount shall be rounded to the 
          nearest multiple of $100.''.
      (b) Conforming Amendment.--The table of sections for part I of 
  subchapter A of chapter 1 of such Code is amended by striking the item 
  relating to section 5 and inserting after the item relating to section 
  4 the following:
  
  ``Sec. 5. Simplified Individual Income Tax System.
  ``Sec. 6. Cross references relating to tax on individuals.''.
      (c) Capital Gains and Dividends Rate Made Permanent.--The Jobs and 
  Growth Tax Relief Reconciliation Act of 2003 is amended by striking 
  section 303.
      (d) Effective Date.--The amendments made by this section shall 
  apply to taxable years beginning after December 31, 2006.
target: Taxpayer Choice Act of 2007 - Amends the Internal Revenue Code to: (1) repeal the alternative minimum tax on individual taxpayers after 2006; and (2) allow taxpayers to elect an alternative income tax system.
  
  Makes permanent the capital gains and dividends rate reductions enacted by the Jobs and Growth Tax Relief Reconciliation Act of 2001.
feat_title: To amend the Internal Revenue Code of 1986 to repeal the alternative minimum tax on individuals and replace it with an alternative tax individuals may choose.