Draft
Automatic Income Tax Rate Adjustment Act
Section 1. {Adjustment Rate}
(A) As used in this section:
(1) “Consumer price index” means the United States consumer price index for all urban consumers as defined and reported by the United States Department of Labor, Bureau of Labor Statistics.
(2) “Baseline year” is the fiscal year beginning [baseline year].
(3) “Inflation adjustment” means the percentage, if any, by which the consumer price index for the preceding fiscal year exceeds the consumer price index for the year beginning [start of baseline year].
(4) “Allowable growth rate” means the inflation adjustment plus the product of 2 percent and the number of years between the preceding fiscal year and the baseline year.
(5) “Individual income tax share” means the percentage of both individual and corporate net income tax collections for the preceding fiscal year attributable to individual income taxes.
(6) “Corporate income tax share” means the percentage of both individual and corporate net income tax collections for the preceding fiscal year attributable to corporate income taxes.
(B) In any fiscal year in which the inflation adjusted growth of selected actual state general fund receipts from such fiscal year exceeds allowable growth rate, the director of legislative research [or equivalent officer] shall certify such excess amount to the secretary of revenue and the director of the budget [or equivalent officers]. Upon receipt of such certified amount, the secretary shall compute the excess percentage increase over the allowable growth rate. Based on such excess percentage, the secretary shall compute the income tax rate reductions to go into effect for the next tax year that would reduce by such certified amount the tax rates according to the provisions of this section as follows:
(1) Reductions for all individual income tax rates shall be applied to reduce rates by an amount determined by dividing the product of the current rate and the individual income tax share by the sum of one and the excess percentage increase above the allowable growth rate. Rate reductions for the corporate income tax rate [or all corporate income tax rates] shall be applied to reduce the rate[s] by an amount determined by dividing the product of the current rate and the corporate income tax share by the sum of one and the excess percentage increase above the allowable growth rate.
(2) In any such computation by the secretary pursuant to this subsection, the resulting income tax rates shall be rounded to the nearest 0.1 percent.
Section 2. {Severability clause.}
Section 3. {Repealer clause.}