article: SECTION 1. SHORT TITLE. This Act may be cited as the ``Flat Alternative Individual Return Tax Act of 1997''. SEC. 2. FLAT ALTERNATIVE INDIVIDUAL RETURN TAX. (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. FLAT ALTERNATIVE INDIVIDUAL RETURN TAX. ``(a) Election.--In lieu of the tax imposed by sections 1 and 55, an individual may elect to be subject to the tax imposed by this section. ``(b) FAIR Tax Imposed.--In the case of an individual making an election under subsection (a), there is hereby imposed on the FAIR taxable income of such individual a tax equal to 20 percent of such FAIR taxable income. ``(c) FAIR Taxable Income.--For purposes of this section, the term `FAIR taxable income' means the excess of-- ``(1) gross income minus the deductions specified by paragraph (1) of section 62(a), over ``(2) the FAIR standard deduction. ``(d) FAIR Standard Deduction.-- ``(1) In general.--For purposes of this section, the term `FAIR standard deduction' means the sum of-- ``(A) the basic standard deduction, plus ``(B) the additional standard deduction. ``(2) Basic standard deduction.--For purposes of paragraph (1), the basic standard deduction is-- ``(A) $21,400 in the case of-- ``(i) a joint return, or ``(ii) a surviving spouse (as defined in section 2(a)), ``(B) $14,000 in the case of a head of household (as defined in section 2(b)), and ``(C) $10,700 in the case of an individual-- ``(i) who is not married and who is not a surviving spouse or head of household, or ``(ii) who is a married individual filing a separate return. ``(3) Additional standard deduction.--For purposes of paragraph (1), the additional standard deduction is $5,000 for each dependent (as defined in section 152) who is described in section 151(c)(1) for the taxable year and who is not required to file a return for such taxable year. ``(e) Income of Certain Children.--For purposes of this section-- ``(1) an individual's taxable income shall include the taxable income of each dependent child of such individual who has not attained age 14 as of the close of such taxable year, and ``(2) such dependent child shall have no liability for tax imposed by this section with respect to such income and shall not be required to file a return for such taxable year. ``(f) Inflation Adjustment.-- ``(1) In general.--In the case of any taxable year beginning in a calendar year after 1998, each dollar amount contained in subsection (d) shall be increased by an amount determined by the Secretary to be equal to-- ``(A) such dollar amount, multiplied by ``(B) the cost-of-living adjustment for such calendar year. ``(2) Cost-of-living adjustment.--For purposes of paragraph (1), the cost-of-living adjustment for any calendar year is the percentage (if any) by which-- ``(A) the CPI for the preceding calendar year, exceeds ``(B) the CPI for the calendar year 1997. ``(3) CPI for any calendar year.--For purposes of paragraph (2), the CPI for any calendar year is the average of the Consumer Price Index as of the close of the 12-month period ending on August 31 of such calendar year. ``(4) Consumer price index.--For purposes of paragraph (3), the term `Consumer Price Index' means the last Consumer Price Index for all-urban consumers published by the Department of Labor. For purposes of the preceding sentence, the revision of the Consumer Price Index which is most consistent with the Consumer Price Index for calendar year 1986 shall be used. ``(5) Rounding.--If any increase determined under paragraph (1) is not a multiple of $10, such increase shall be rounded to the next highest multiple of $10. ``(g) Married Couple Must File Joint Return.-- ``(1) In general.--Except in the case of a husband and wife who live apart at all times during the taxable year, if the taxpayer is married at the close of the taxable year, an election under subsection (a) shall be made only if the taxpayer and his spouse file a joint return for the taxable year. ``(2) Marital status.--For purposes of this section, marital status shall be determined under section 7703.'' (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 new items: ``Sec. 5. Flat alternative individual return tax. ``Sec. 6. Cross references relating to tax on individuals.'' (c) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 1997. SEC. 3. SUPERMAJORITY REQUIRED. (a) In General.--It shall not be in order in the House of Representatives or the Senate to consider any bill, joint resolution, amendment thereto, or conference report thereon that includes any provision that-- (1) increases the FAIR tax rate (as specified in subsection (b) of section 5 of the Internal Revenue Code of 1986, as added by this Act), (2) creates any additional FAIR income tax rate (related to the alternative tax imposed by such section 5), or (3) reduces the FAIR standard deduction (as defined in subsection (d) of such section 5). (b) Waiver or Suspension.--This section may be waived or suspended in the House of Representatives or the Senate only by the affirmative vote of three-fifths of the Members, duly chosen and sworn.
summary: Flat Alternative Individual Return Tax Act of 1997 - Amends the Internal Revenue Code to allow an individual to pay, instead of the tax otherwise due under the Code, a tax equal to 20 percent of FAIR taxable income. Defines such income as gross income minus specified deductions over the FAIR standard deduction. Defines such deduction.