83 STAT. ]
PUBLIC LAW 91-172-DEC. 30, 1969
685
(9) The table of sections for part I of subchapter A of chapter 1 is amended by striking ont the second and third items and inserting in lien thereof the following: "Sec. 2. Definitions and special rules. "Sec. 3. Optional tax tables for individuals." (e) Section 21(d) (relating to changes in rates during a taxable 26 USC 2^°' year) is amended to read as follows: " (d) CHANGES MADE BY TAX REFOIOI ACT OF 1909 iisr CASE OF IxDiviDUALS.—In applying subsection (a) to a taxable year of an individual which is not a calendar year, each change made by the Tax Reform Act of 19(59 in part I or in the application of part IV or V of subchapter B for purposes of the determination of taxable income shall be treated as a change in a rate of tax." (f) EFFECTIVE DATES.—The amendments made by subsections (a), (b), and (d) (other than paragraphs (1) and (8)) shall apply to taxable years beginning after December 31, 1970, except that section 2(c) of the Internal Revenue Code of 1954, as amended by subsection ^"'^' P- ^^a. (b), shall also apply to taxable years beginning after December 31, 1969. The amendments made by subsections (c), (d)(1), and (d)(8) shall apply to taxable years beginning after December 31, 1969. SEC. 804. FIFTY-PERCENT MAXIMUM RATE ON EARNED INCOME. (a) I x GENERAL.—Part VI of subchapter Q of chapter 1 (relating H^lc'islV-' to other limitations) is amended by adding at the end thereof the 1347. fol 1 ow i ng new secti on: "SEC. 1348. FIFTY-PERCENT MAXIMUM RATE ON EARNED INCOME. "'(a) GENERAL R I L E. — I f for any taxable year an individual has earned taxable income AAiiich exceeds the amount of taxable income specified in paragraph (1), the tax imposed by section 1 for such year '^"'^' P* ^'^^• shall, unless the taxpayer chooses the benefits of part 1 (relating to income averaging), be the sum of— "(1) the tax imposed by section 1 on the lowest amount of taxable income on which the rate of tax under section 1 exceeds 50 percent, "(2) 50 percent of the amount by which his earned taxable income exceeds the lowest amount of taxable income on which the rate of tax under section 1 exceeds 50 percent, and "(3) the excess of the tax computed under section 1 without regard to this section over the tax so computed with reference solely to his earned taxable income. Tn applying this subsection to a taxable year beginning after December 31, 1970, and before January 1, 1972, '60 percent' shall be substituted for '50 percent" each place it appears in paragraphs (1) and (2). "(b) DEFINITIONS.—For purposes of this section— "(1) EARNED INCOME.—The term 'earned income' means any income which is earned income within the meaning of section 401 (c)(2)(C) or section 911(b), except that such term does not include any distribution to which section 7 2 (m)(5), 72(n), 402 Ante, p. 644. (a)(2), or 403(a)(2)(A) applies or any deferred compensation within the meaning of section 404. For purposes of this paragraph, deferred compensation does not include any amount received before the end of the taxable year following the first taxable year of the recipient in which his right to receive such amount is not subiect to a substantial risk of forfeiture (within the meaning of section 83(c)(1)). An^e.p. 589.
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