Tax Reduction and Job Creation Act of 1980

Tax Reduction and Job Creation Act of 1980 - Title I: Individual Tax Rates - Amends the Internal Revenue Code to reduce the tax rates for individuals for taxable years beginning in 1981. Title II: Deduction to Reduce the "Marriage Penalty" Tax - Allows a deduction to a married individual in an amount equal to ten percent (not to exceed $2,000) of the earned income of the spouse with the lesser income for the taxable year. Allows such deduction to one spouse if both earned the same amount of income. Title III: Incentives for New Plant and Equipment - Revises the method for determining useful lives of business assets for purposes of computing allowable depreciation deductions. Replaces the asset depreciation range (ADR) method with a schedule of capital cost recovery periods for three classes of business property. Establishes capital cost recovery periods for the following classes of business property: (1) buildings and their structural components, ten years; (2) tangible property, five years; and (3) automobiles, taxis, and light-duty trucks (up to $100,000), three years. Allows a ten percent investment tax credit for buildings and tangible property, and six percent credit for automobiles, taxis, and light-duty trucks. Requires the recapture of depreciation amounts and investment tax credit amounts applicable to assets which are sold or otherwise disposed of prior to the expiration of the capital cost recovery period. Permits a taxpayer to deduct less than the full allowance for capital cost recovery in any taxable year. Permits a carryover to succeeding taxable years of any unused depreciation amounts. Disqualifies capital cost recovery property from the allowance for first year depreciation. Treats amounts claimed as the capital cost recovery of noncorporate lessors as an item of tax preference for purposes of the minimum tax. Adopts as an accounting practice the "half year convention" under which investments eligible for capital cost recovery treatment or the investment tax credit which are made at any time during the taxable year are deemed to be made in the middle of the year. Title IV: Small Business Reduction - Reduces the corporate income tax rate to establish a new graduated schedule for small businesses. Sets such new schedule as the sum of: (1) 15 percent (currently 17 percent) of income $25,000 or under; (2) 20 percent of income between $25,000 and $50,000 (as currently); (3) 25 percent (currently $75,000); (4) 30 percent of income between $100,000 and $150,000; (5) 35 percent of income between $150,000 and $200,000; (6) 40 percent of income between $200,000 and $250,000 (currently, between $75,000 and $100,000); and (7) 46 percent of income exceeding $250,000 (currently, $100,000). Title V: Export Tax Incentive - Increases the earned income exclusion for United States citizens working abroad, who are bona fide residents of a foreign country, from an annual rate of $20,000 to: (1) $50,000; or (2) $65,000, if such persons have been working abroad for more than two years. Allows separate exclusions to married individuals who are both working overseas, although one's excess exclusion cannot be used income earned by the other. Allows an exclusion from gross income for housing expenses which exceed 20 percent of earned income (determined without regard to such allowance). Repeals current provisions of the Code allowing tax deductions to such persons for certain living expenses abroad.

Written by analysts at the Congressional Research Service and published on Congress.gov, not by Civibrief. Summarized at the "Introduced in Senate" stage on July 2, 1980. It describes the bill, it is not the legal text.

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