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.
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.
{"src": "billsum_test", "title": "To amend the Internal Revenue Code of 1986 to provide middle class tax relief, and for other purposes."}