text: SECTION 1. SHORT TITLE; ETC.
  
      (a) Short Title.--This Act may be cited as the ``Middle Class Tax 
  Relief Act of 2010''.
      (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.
      (c) Table of Contents.--The table of contents for this Act is as 
  follows:
  
  Sec. 1. Short title; etc.
              TITLE I--MIDDLE CLASS TAX RELIEF MADE PERMANENT
  
  Sec. 101. Middle class tax relief made permanent.
  Sec. 102. Certain provisions not applicable to high income individuals.
  Sec. 103. Related amendments.
   TITLE II--EXPENSING BY SMALL BUSINESSES OF CERTAIN DEPRECIABLE ASSETS
  
  Sec. 201. Increased limitations on expensing by small businesses of 
                              certain depreciable assets.
           TITLE III--EXTENSION OF ALTERNATIVE MINIMUM TAX RELIEF
  
  Sec. 301. Extension of alternative minimum tax relief for nonrefundable 
                              personal credits.
  Sec. 302. Extension of increased alternative minimum tax exemption 
                              amount.
                       TITLE IV--BUDGETARY PROVISION
  
  Sec. 401. PAYGO compliance.
  
              TITLE I--MIDDLE CLASS TAX RELIEF MADE PERMANENT
  
  SEC. 101. MIDDLE CLASS TAX RELIEF MADE PERMANENT.
  
      (a) In General.--Section 901 of the Economic Growth and Tax Relief 
  Reconciliation Act of 2001 shall not apply to the following provisions 
  of such Act (and to the amendments made by such provisions):
              (1) Title I (relating to individual income tax rate 
          reductions).
              (2) Title II (relating to tax benefits related to 
          children).
              (3) Title III (relating to marriage penalty relief).
              (4) Title IV (relating to affordable education provisions).
      (b) Reduced Rates on Capital Gains and Dividends.--The Jobs and 
  Growth Tax Relief Reconciliation Act of 2003 is amended by striking 
  section 303.
  
  SEC. 102. CERTAIN PROVISIONS NOT APPLICABLE TO HIGH INCOME INDIVIDUALS.
  
      (a) Individual Income Tax Rates.--Subsection (i) of section 1 is 
  amended by striking paragraph (2), by redesignating paragraph (3) as 
  paragraph (4), and by inserting after paragraph (1) the following new 
  paragraphs:
              ``(2) 25- and 28-Percent rate brackets.--The tables under 
          subsections (a), (b), (c), (d), and (e) shall be applied--
                      ``(A) by substituting `25%' for `28%' each place it 
                  appears (before the application of subparagraph (B)), 
                  and
                      ``(B) by substituting `28%' for `31%' each place it 
                  appears.
              ``(3) 33-Percent rate bracket.--
                      ``(A) In general.--In the case of taxable years 
                  beginning after December 31, 2010--
                              ``(i) the rate of tax under subsections 
                          (a), (b), (c), and (d) on a taxpayer's taxable 
                          income in the fourth rate bracket shall be 33 
                          percent to the extent such income does not 
                          exceed an amount equal to the excess of--
                                      ``(I) the applicable amount, over
                                      ``(II) the dollar amount at which 
                                  such bracket begins, and
                              ``(ii) the 36 percent rate of tax under 
                          such subsections shall apply only to the 
                          taxpayer's taxable income in such bracket in 
                          excess of the amount to which clause (i) 
                          applies.
                      ``(B) Applicable amount.--For purposes of this 
                  paragraph, the term `applicable amount' means the 
                  excess of--
                              ``(i) the applicable threshold, over
                              ``(ii) the sum of the following amounts in 
                          effect for the taxable year:
                                      ``(I) the basic standard deduction 
                                  (within the meaning of section 
                                  63(c)(2)), and
                                      ``(II) the exemption amount (within 
                                  the meaning of section 151(d)(1)) (or, 
                                  in the case of subsection (a), 2 such 
                                  exemption amounts).
                      ``(C) Applicable threshold.--For purposes of this 
                  paragraph, the term `applicable threshold' means--
                              ``(i) $250,000 in the case of subsection 
                          (a),
                              ``(ii) $200,000 in the case of subsections 
                          (b) and (c), and
                              ``(iii) \1/2\ the amount applicable under 
                          clause (i) (after adjustment, if any, under 
                          subparagraph (E)) in the case of subsection 
                          (d).
                      ``(D) Fourth rate bracket.--For purposes of this 
                  paragraph, the term `fourth rate bracket' means the 
                  bracket which would (determined without regard to this 
                  paragraph) be the 36-percent rate bracket.
                      ``(E) Inflation adjustment.--For purposes of this 
                  paragraph, a rule similar to the rule of paragraph 
                  (1)(C) shall apply with respect to taxable years 
                  beginning in calendar years after 2010, applied by 
                  substituting `2008' for `1992' in subsection 
                  (f)(3)(B).''.
      (b) Phaseout of Personal Exemptions and Itemized Deductions.--
              (1) Overall limitation on itemized deductions.--Section 68 
          is amended--
                      (A) by striking ``the applicable amount'' the first 
                  place it appears in subsection (a) and inserting ``the 
                  applicable threshold in effect under section 1(i)(3)'',
                      (B) by striking ``the applicable amount'' in 
                  subsection (a)(1) and inserting ``such applicable 
                  threshold'',
                      (C) by striking subsection (b) and redesignating 
                  subsections (c), (d), and (e) as subsections (b), (c), 
                  and (d), respectively, and
                      (D) by striking subsections (f) and (g).
              (2) Phaseout of deductions for personal exemptions.--
                      (A) In general.--Paragraph (3) of section 151(d) is 
                  amended--
                              (i) by striking ``the threshold amount'' in 
                          subparagraphs (A) and (B) and inserting ``the 
                          applicable threshold in effect under section 
                          1(i)(3)'',
                              (ii) by striking subparagraph (C) and 
                          redesignating subparagraph (D) as subparagraph 
                          (C), and
                              (iii) by striking subparagraphs (E) and 
                          (F).
                      (B) Conforming amendment.--Paragraph (4) of section 
                  151(d) is amended--
                              (i) by striking subparagraph (B),
                              (ii) by redesignating clauses (i) and (ii) 
                          of subparagraph (A) as subparagraphs (A) and 
                          (B), respectively, and by indenting such 
                          subparagraphs (as so redesignated) accordingly, 
                          and
                              (iii) by striking all that precedes ``in a 
                          calendar year after 1989,'' and inserting the 
                          following:
              ``(4) Inflation adjustment.--In the case of any taxable 
          year beginning''.
      (c) Reduced Rate on Capital Gains and Dividends.--
              (1) In general.--Paragraph (1) of section (1)(h) is amended 
          by striking subparagraph (C), by redesignating subparagraphs 
          (D) and (E) as subparagraphs (E) and (F) and by inserting after 
          subparagraph (B) the following new subparagraphs:
                      ``(C) 15 percent of the lesser of--
                              ``(i) so much of the adjusted net capital 
                          gain (or, if less, taxable income) as exceeds 
                          the amount on which a tax is determined under 
                          subparagraph (B), or
                              ``(ii) the excess (if any) of--
                                      ``(I) the amount of taxable income 
                                  which would (without regard to this 
                                  subsection) be taxed at a rate below 36 
                                  percent, over
                                      ``(II) the sum of the amounts on 
                                  which tax is determined under 
                                  subparagraphs (A) and (B),
                      ``(D) 20 percent of the adjusted net capital gain 
                  (or, if less, taxable income) in excess of the sum of 
                  the amounts on which tax is determined under 
                  subparagraphs (B) and (C),''.
              (2) Dividends.--Subparagraph (A) of section 1(h)(11) is 
          amended by striking ``qualified dividend income'' and inserting 
          ``so much of the qualified dividend income as does not exceed 
          the excess (if any) of--
                              ``(i) the amount of taxable income which 
                          would (without regard to this subsection) be 
                          taxed at a rate below 36 percent, over
                              ``(ii) taxable income reduced by qualified 
                          dividend income.''.
              (3) Minimum tax.--Section 55 is amended by adding at the 
          end the following new subsection:
      ``(f) Application of Maximum Rate of Tax on Net Capital Gain of 
  Noncorporate Taxpayers.--In the case of taxable years beginning after 
  December 31, 2010, the amount determined under subparagraph (C) of 
  subsection (b)(3) shall be the sum of--
              ``(1) 15 percent of the lesser of--
                      ``(A) so much of the adjusted net capital gain (or, 
                  if less, taxable excess) as exceeds the amount on which 
                  tax is determined under subparagraph (B) of subsection 
                  (b)(3), or
                      ``(B) the excess described in section 
                  1(h)(1)(C)(ii), plus
              ``(2) 20 percent of the adjusted net capital gain (or, if 
          less, taxable excess) in excess of the sum of the amounts on 
          which tax is determined under subsection (b)(3)(B) and 
          paragraph (1).''.
              (4) Conforming amendments.--
                      (A) The following provisions are amended by 
                  striking ``15 percent'' and inserting ``20 percent'':
                              (i) Section 1445(e)(1).
                              (ii) The second sentence of section 
                          7518(g)(6)(A).
                              (iii) Section 53511(f)(2) of title 46, 
                          United States Code.
                      (B) Sections 531 and 541 are each amended by 
                  striking ``15 percent of'' and inserting ``the product 
                  of the highest rate of tax under section 1(c) and''.
                      (C) Section 1445(e)(6) is amended by striking ``15 
                  percent (20 percent in the case of taxable years 
                  beginning after December 31, 2010)'' and inserting ``20 
                  percent''.
      (d) Effective Dates.--
              (1) In general.--Except as provided in paragraph (2), the 
          amendments made by this section shall apply to taxable years 
          beginning after December 31, 2010.
              (2) Withholding.--The amendments made by subparagraphs 
          (A)(i) and (C) of subsection (c)(4) shall apply to amounts paid 
          on or after January 1, 2011.
  
  SEC. 103. RELATED AMENDMENTS.
  
      (a) Application of Increase in Refundable Portion of Child Tax 
  Credit.--
              (1) In general.--Subsection (d) of section 24 is amended--
                      (A) by striking ``$10,000'' in paragraph (1)(B)(i) 
                  and inserting ``$3,000'', and
                      (B) by striking paragraphs (3) and (4).
              (2) Effective date.--The amendments made by this subsection 
          shall apply to taxable years beginning after December 31, 2010.
      (b) Application of Increase in Earned Income Tax Credit.--
              (1) In general.--Subparagraph (B) of section 32(b)(2) is 
          amended to read as follows:
                      ``(B) Joint returns.--
                              ``(i) In general.--In the case of a joint 
                          return filed by an eligible individual and such 
                          individual's spouse, the phaseout amount 
                          determined under subparagraph (A) shall be 
                          increased by $5,000.
                              ``(ii) Inflation adjustment.--In the case 
                          of any taxable year beginning after 2010, the 
                          $5,000 amount in clause (i) shall be increased 
                          by an amount equal to--
                                      ``(I) such dollar amount, 
                                  multiplied by
                                      ``(II) the cost of living 
                                  adjustment determined under section 
                                  1(f)(3) for the calendar year in which 
                                  the taxable year begins determined by 
                                  substituting `calendar year 2008' for 
                                  `calendar year 1992' in subparagraph 
                                  (B) thereof.
                          Subparagraph (A) of subsection (j)(2) shall 
                          apply after taking into account any increase 
                          under the preceding sentence.''.
              (2) Conforming amendment.--Subsection (b) of section 32 is 
          amended by striking paragraph (3).
              (3) Effective date.--The amendments made by this subsection 
          shall apply to taxable years beginning after December 31, 2010.
      (c) Application to Adoption Credit and Adoption Assistance 
  Programs.--Subsection (c) of section 10909 of the Patient Protection 
  and Affordable Care Act is amended to read as follows:
      ``(c) The amendments made by this section shall not apply to 
  taxable years beginning after December 31, 2011.''.
  
   TITLE II--EXPENSING BY SMALL BUSINESSES OF CERTAIN DEPRECIABLE ASSETS
  
  SEC. 201. INCREASED LIMITATIONS ON EXPENSING BY SMALL BUSINESSES OF 
                CERTAIN DEPRECIABLE ASSETS.
  
      (a) Dollar Limitation.--Subparagraph (C) of section 179(b)(1) is 
  amended by striking ``$25,000'' and inserting ``$125,000''.
      (b) Threshold at Which Phaseout Begins.--Subparagraph (C) of 
  section 179(b)(2) is amended by striking ``$200,000'' and inserting 
  ``$500,000''.
      (c) Inflation Adjustment.--Subsection (b) of section 179 is amended 
  by adding at the end the following new paragraph:
              ``(6) Inflation adjustments.--
                      ``(A) In general.--In the case of any taxable 
                  beginning in a calendar year after 2011, the $125,000 
                  and $500,000 amounts in paragraphs (1)(C) and (2)(C) 
                  shall each be increased by an amount equal to--
                              ``(i) such dollar amount, multiplied by
                              ``(ii) the cost-of-living adjustment 
                          determined under section 1(f)(3) for the 
                          calendar year in which the taxable year begins 
                          determined by substituting `calendar year 2006' 
                          for `calendar year 1992' in subparagraph (B) 
                          thereof.
                      ``(B) Rounding.--
                              ``(i) Dollar limitation.--If the amount in 
                          paragraph (1) as increased under subparagraph 
                          (A) is not a multiple of $1,000, such amount 
                          shall be rounded to the nearest multiple of 
                          $1,000.
                              ``(ii) Phaseout amount.--If the amount in 
                          paragraph (2) as increased under subparagraph 
                          (A) is not a multiple of $10,000, such amount 
                          shall be rounded to the nearest multiple of 
                          $10,000.''.
      (d) Authority To Revoke Election Made Permanent.--Paragraph (2) of 
  section 179(c) is amended by striking ``and before 2012''.
      (e) Treatment of Certain Computer Software as Section 179 Property 
  Made Permanent.--Clause (ii) of section 179(d)(1)(A) is amended by 
  striking ``and before 2012''.
      (f) Effective Date.--The amendments made by this section shall 
  apply to taxable years beginning after December 31, 2011.
  
           TITLE III--EXTENSION OF ALTERNATIVE MINIMUM TAX RELIEF
  
  SEC. 301. EXTENSION OF ALTERNATIVE MINIMUM TAX RELIEF FOR NONREFUNDABLE 
                PERSONAL CREDITS.
  
      (a) In General.--Paragraph (2) of section 26(a) is amended--
              (1) by striking ``2000, 2001, 2002, 2003, 2004, 2005, 2006, 
          2007, 2008, or 2009'' and inserting ``the period beginning with 
          calendar year 2000 and ending with calendar year 2011'', and
              (2) by striking ``2009'' in the heading thereof and 
          inserting ``2011''.
      (b) Effective Date.--The amendments made by this section shall 
  apply to taxable years beginning after December 31, 2009.
  
  SEC. 302. EXTENSION OF INCREASED ALTERNATIVE MINIMUM TAX EXEMPTION 
                AMOUNT.
  
      (a) In General.--Paragraph (1) of section 55(d) is amended--
              (1) by striking ``($70,950 in the case of taxable years 
          beginning in 2009)'' in subparagraph (A) and inserting 
          ``($72,450 in the case of taxable years beginning in 2010 or 
          2011)'', and
              (2) by striking ``($46,700 in the case of taxable years 
          beginning in 2009)'' in subparagraph (B) and inserting 
          ``($47,450 in the case of taxable years beginning in 2010 or 
          2011)''.
      (b) Nonapplication of EGTRRA Sunset.--Section 901 of the Economic 
  Growth and Tax Relief Reconciliation Act of 2001 shall not apply to the 
  amendments made by section 701 of such Act.
      (c) Effective Date.--The amendments made by this section shall 
  apply to taxable years beginning after December 31, 2009.
  
                       TITLE IV--BUDGETARY PROVISION
  
  SEC. 401. PAYGO COMPLIANCE.
  
      The budgetary effects of this Act, for the purpose of complying 
  with the Statutory Pay-As-You-Go Act of 2010, shall be determined by 
  reference to the latest statement titled ``Budgetary Effects of PAYGO 
  Legislation'' for this Act, submitted for printing in the Congressional 
  Record by the Chairman of the House Budget Committee, provided that 
  such statement has been submitted prior to the vote on passage.
target: Middle Class Tax Relief Act of 2010 - Makes the general terminating date of the Economic Growth and Tax Relief Reconciliation Act of 2010 (EGTRRA) (i.e., December 31, 2010) inapplicable to provisions of that Act relating to individual income tax rate reductions, tax benefits related to children and adoption, marriage penalty relief, and education. Repeals the terminating date of the Jobs Growth Tax Relief Reconciliation Act of 2003 that applies to reductions in the tax rate for capital gains and dividend income, subject to the income thresholds set forth by this Act..
  
  Amends the Internal Revenue Code to: (1) establish permanent reductions in income tax rates for individual taxpayers whose adjusted gross income is $200,000 or less ($250,000 for married couples filing joint tax returns); (2) allow a permanent exemption from limitations on itemized tax deductions and personal exemptions for individual taxpayers whose adjusted gross income is $200,000 or less ($250,000 for married couples filing joint tax returns); (3) allow a 15% tax rate on capital gains and dividend income for individual taxpayers whose adjusted gross income is $200,000 or less ($250,000 for married couples filing joint tax returns); (4) allow a permanent increase in the refundable portion of the child tax credit; (5) make permanent the increased earned income tax credit and the modifications to such credit enacted by EGTRRA; (6) make permanent the increased ($125,000) expensing allowance for depreciable business and investment property; and (7) extend through 2011 the increased alternative minimum tax (AMT) exemption amounts and the offset against the AMT for certain nonrefundable personal tax credits.
  
  Provides for compliance of the budgetary effects of this Act with the Statutory Pay-As-You-Go Act of 2010.
feat_title: To amend the Internal Revenue Code of 1986 to provide middle class tax relief, and for other purposes.