text: SECTION 1. ESTATE AND GIFT TAX RATES REDUCED TO 30 PERCENT.
  
      (a) Estate Tax.--
              (1) In general.--Section 2001 of the Internal Revenue Code 
          of 1986 (relating to estate tax) is amended by striking 
          subsections (b) and (c) and by inserting after subsection (a) 
          the following new subsection:
      ``(b) Computation of Tax.--The tax imposed by this section shall be 
  the amount equal to the excess (if any) of--
              ``(1) 30 percent of the sum of--
                      ``(A) the amount of the taxable estate, and
                      ``(B) the amount of the adjusted taxable gifts, 
                  over
              ``(2) the aggregate amount of tax paid under chapter 12 
          with respect to gifts made by the decedent after December 31, 
          1976.
  For purposes of paragraph (1)(B), the term `adjusted taxable gifts' 
  means the total amount of the taxable gifts (within the meaning of 
  section 2503) made by the decedent after December 31, 1976, other than 
  gifts which are includible in the gross estate of the decedent.''.
              (2) Conforming amendments.--
                      (A) Section 2010(c) of such Code is amended by 
                  striking ``tentative'' both places it appears and 
                  inserting ``tax''.
                      (B) Subsection (b) of section 2101 of such Code is 
                  amended to read as follows:
      ``(b) Computation of Tax.--The tax imposed by this section shall be 
  the amount equal to the excess (if any) of--
              ``(1) 30 percent of the sum of--
                      ``(A) the amount of the taxable estate, and
                      ``(B) the amount of the adjusted taxable gifts, 
                  over
              ``(2) the aggregate amount of tax paid under chapter 12 
          with respect to gifts made by the decedent after December 31, 
          1976.''.
                      (C) Subsection (b) of section 2102 of such Code is 
                  amended--
                              (i) by striking ``$13,000'' each place it 
                          appears and inserting ``$20,000'', and
                              (ii) by striking ``$46,800'' and inserting 
                          ``$52,500''.
                      (D) Section 2201 is amended--
                              (i) in subsection (a) by striking ``the 
                          rate schedule set forth in subsection (c) shall 
                          be deemed to be the rate schedule set forth in 
                          section 2001(c)'' and inserting ``the tax 
                          determined under subsection (c) shall be deemed 
                          to be the tax determined under section 
                          2001(b)'', and
                              (ii) in subsection (c) by striking 
                          ``tentative'' each place it appears.
      (b) Gift Tax.--
              (1) In general.--Section 2502 of such Code is amended to 
          read as follows:
  
  ``SEC. 2502. RATE OF TAX.
  
      ``(a) General Rule.--The tax imposed by section 2501 for each 
  calendar year shall be an amount equal to 30 percent of the sum of the 
  taxable gifts for such calendar year.
      ``(b) Tax to Be Paid by Donor.--The tax imposed by section 2501 
  shall be paid by the donor.''.
              (2) Conforming amendments.--
                      (A) Subchapter A of chapter 12 of such Code is 
                  amended by striking section 2504.
                      (B) The table of sections for such subchapter is 
                  amended by striking the item relating to section 2504.
      (c) Estate Tax Retained.--
              (1) In general.--Section 901 of the Economic Growth and Tax 
          Relief Reconciliation Act of 2001 shall not apply to title V of 
          such Act.
              (2) Retention.--Subtitles A and E of title V of the 
          Economic Growth and Tax Relief Reconciliation Act of 2001, and 
          the amendments made by such subtitles, are hereby repealed; and 
          the Internal Revenue Code of 1986 shall be applied as if such 
          subtitles, and amendments, had never been enacted.
              (3) Conforming amendments.--Subsections (d), (e), and 
          (f)(3) of section 511 of the Economic Growth and Tax Relief 
          Reconciliation Act of 2001, and the amendments made by such 
          subsections, are hereby repealed; and the Internal Revenue Code 
          of 1986 shall be applied as if such subsections, and 
          amendments, had never been enacted.
      (d) Effective Date.--The amendments made by this section shall 
  apply to estates of decedents dying, and gifts made, after the date of 
  the enactment of this Act.
  
  SEC. 2. UNIFIED CREDIT INCREASED TO EQUIVALENT OF $10,000,000 
                EXCLUSION; INFLATION ADJUSTMENT OF UNIFIED CREDIT.
  
      (a) In General.--Subsection (c) of section 2010 of the Internal 
  Revenue Code of 1986 (relating to applicable credit amount) is amended 
  to read as follows:
      ``(c) Applicable Credit Amount.--For purposes of this section, the 
  applicable credit amount is the amount of the tax which would be 
  determined under section 2001(b) if the amount with respect to which 
  such tax is to be computed were the applicable exclusion amount. For 
  purposes of the preceding sentence, the applicable exclusion amount is 
  $10,000,000.''.
      (b) Inflation Adjustment.--Section 2010 of such Code is amended by 
  redesignating subsection (d) as subsection (e) and by inserting after 
  subsection (c) the following new subsection:
      ``(d) Cost-of-Living Adjustment.--In the case of any decedent 
  dying, and gift made, in a calendar year after 2005, the $10,000,000 
  amount set forth in subsection (c) shall be increased by an amount 
  equal to--
              ``(1) $10,000,000, multiplied by
              ``(2) the cost-of-living adjustment determined under 
          section 1(f)(3) for such calendar year by substituting 
          `calendar year 2004' for `calendar year 1992' in subparagraph 
          (B) thereof.
  If any amount as adjusted under the preceding sentence is not a 
  multiple of $10,000, such amount shall be rounded to the nearest 
  multiple of $10,000.''.
      (c) Effective Date.--The amendments made by this section shall 
  apply to estates of decedents dying, and gifts made, after the date of 
  the enactment of this Act.
  
  SEC. 3. ANNUAL GIFT TAX EXCLUSION INCREASED TO $50,000.
  
      (a) In General.--Subsection (b) of section 2503 of the Internal 
  Revenue Code of 1986 (relating to exclusion from gifts) is amended by 
  striking ``$10,000'' each place it appears and inserting ``$50,000''.
      (b) Resetting of Inflation Adjustment.--Paragraph (2) of section 
  2503(b) of such Code is amended--
              (1) by striking ``1998'' and inserting ``2005'', and
              (2) by striking ``1997'' and inserting ``2004''.
      (c) Effective Date.--The amendments made by this section shall 
  apply to gifts made after December 31, 2004.
target: Amends the Internal Revenue Code to: (1) reduce the top marginal tax rate for estates and gifts to 30 percent; (2) increase the estate tax exclusion amount to $10 million, with an annual adjustment for inflation; and (3) increase the annual gift tax exclusion from $10,000 to $50,000.
feat_title: To amend the Internal Revenue Code of 1986 to permanently reduce estate and gift tax rates to 30 percent, to increase the exclusion equivalent of the unified credit to $10,000,000, and to increase the annual gift tax exclusion to $50,000.