H.R.1579 - Inclusive Prosperity Act of 2013
To impose a tax on certain trading transactions to strengthen our financial security, reduce market volatility, expand opportunity, and stop shrinking the middle class.
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Mr. ELLISON (for himself, Mr. BLUMENAUER, Ms. CHU, Mr. CONYERS, Ms. EDWARDS, Mr. GRIJALVA, Ms. LEE of California, Mr. MCGOVERN, and Ms. NORTON) introduced the following bill; which was referred to the Committee on Ways and MeansCommentsClose CommentsPermalink
SECTION 1. SHORT TITLE.
SEC. 2. FINDINGS.
(2) The global financial crisis was caused by financial firms taking great financial risks without disclosing those risks to their investors or their regulators, and by regulatory failures to adequately police the financial services markets for crime, unfair or deceptive practices, fraud, lack of transparency, and mismanagement.CommentsClose CommentsPermalink
(3) Deceptive, illegal, and speculative financial practices have harmed public confidence in the integrity and fairness of many United States financial institutions, and threaten the basic strengths of the United States economic system.CommentsClose CommentsPermalink
(4) American citizens provided the money to stabilize the financial sector, making $600 billion available to 800 financial institutions, automakers, and insurance companies.CommentsClose CommentsPermalink
(5) The global financial crisis, along with the wars, unabated and unaddressed climate change, unsustainable tax cuts, and a continuing unemployment crisis, if unaddressed, will deprive a generation of a meaningful role in the larger economy.CommentsClose CommentsPermalink
(6) Nurses, teachers, public safety officers, and other public sector workers have faced drastic funding cuts, harming our long-term public safety and prospects for economic growth.CommentsClose CommentsPermalink
(7) Extreme weather events rooted in climate change, including flood, drought, fire, super storms like Sandy, as well as ‘slow-onset’ events like sea level rise, are wreaking havoc in the United States and across the globe resulting in climate change impacts that jeopardize the lives and livelihoods of Americans, causing large-scale food and energy insecurity in developing countries, and extolling untold economic costs.CommentsClose CommentsPermalink
(8) According to economists, a small tax on transfer of ownership of every financial trade could generate hundreds of billions annually in revenue, which when invested could help create sufficient jobs in both the public and private sectors to replace the 8 million jobs lost in the recent recession and add even more jobs on an ongoing basis, as well as provide urgently needed funding for programs to combat climate change and address global health and development issues.CommentsClose CommentsPermalink
(9) A transactions tax will help limit high frequency trading which may be as high as 70 percent of the market and results in declining market stability through extreme price volatility, distorted market prices, and structural vulnerability to speculation far in excess of the liquidity needs of commercial hedgers.CommentsClose CommentsPermalink
(11) The United States had a transfer tax from 1914 to 1966: The Revenue Act of 1914 (Act of Oct. 22, 1914 (ch. 331, 38 Stat. 745)) levied a 0.2 percent tax on all sales or transfers of stock which was doubled in 1932 to help overcome the budgetary challenges during the Great Depression.CommentsClose CommentsPermalink
(12) Forty nations have or have had some form of a financial transactions tax; it is endorsed by more than 1,000 economists; and 11 European countries are moving forward on implementing a coordinated financial transactions tax after European Union finance ministers signaled approval in January 2013.CommentsClose CommentsPermalink
(A) strengthen financial security and expand opportunity for low- and moderate-income families, including strengthening the social safety net and expanding resources for child care, Social Security, and savings incentives; andCommentsClose CommentsPermalink
(B) expand resources for State and Federal investments that protect our health and environment, investing in water and wastewater infrastructure, rebuild our crumbling physical infrastructure, and create good paying jobs by--CommentsClose CommentsPermalink
(iv) investing in transportation including public mass transit and an infrastructure bank that promotes environmentally responsible domestic manufacturing and construction industries; andCommentsClose CommentsPermalink
(v) protecting our environment and building a clean energy economy, including efforts to combat climate change and build resilience to its effects in the United States and in developing countries; andCommentsClose CommentsPermalink
(C) fund international sustainable prosperity programs such as health care investments, AIDS treatment, research and prevention programs, climate change adaptation and mitigation efforts by developing countries, and international assistance.CommentsClose CommentsPermalink
SEC. 3. TRANSACTION TAX.
‘Subchapter C--Tax on Trading Transactions
‘SEC. 4475. TAX ON TRADING TRANSACTIONS.
‘(b) Rate of Tax- The tax imposed under subsection (a) with respect to any covered transaction shall be the applicable percentage of the specified base amount with respect to such covered transaction. The applicable percentage shall be--CommentsClose CommentsPermalink
‘(C) any note, bond, debenture, or other evidence of indebtedness, other than a State or local bond the interest of which is excluded from gross income under section 103(a),CommentsClose CommentsPermalink
‘(2) DERIVATIVE FINANCIAL INSTRUMENT- The term ‘derivative financial instrument’ includes any option, forward contract, futures contract, notional principal contract, or any similar financial instrument.CommentsClose CommentsPermalink
‘(B) a variable rate, price, or amount, which is based on any current objectively determinable information which is not within the control of any of the parties to the contract or instrument and is not unique to any of the parties’ circumstances.CommentsClose CommentsPermalink
‘(B) CERTAIN DEEMED EXCHANGES- In the case of a distribution treated as an exchange for stock under section 302 or 331, the corporation making such distribution shall be treated as having purchased such stock for purposes of this section.CommentsClose CommentsPermalink
‘(1) EXCEPTION FOR INITIAL ISSUES- No tax shall be imposed under subsection (a) on any covered transaction with respect to the initial issuance of any security described in subparagraph (A), (B), or (C) of subsection (e)(1).CommentsClose CommentsPermalink
‘(3) EXCEPTION FOR SECURITIES LENDING ARRANGEMENTS- No tax shall be imposed under subsection (a) on any covered transaction with respect to which gain or loss is not recognized by reason of section 1058.CommentsClose CommentsPermalink
‘(2) SPECIAL RULES FOR DIRECT, ETC., TRANSACTIONS- In the case of any transaction to which paragraph (1) does not apply, the tax imposed by this section shall be paid by--CommentsClose CommentsPermalink
‘(h) Certain Payments Treated as Separate Transactions- Except as otherwise provided by the Secretary, any payment with respect to a security described in subparagraph (D), (E), or (F) of subsection (e)(1) shall be treated as a separate transaction for purposes of this section, including--CommentsClose CommentsPermalink
‘(1) any net initial payment, net final or terminating payment, or net periodical payment with respect to a notional principal contract (or similar financial instrument),CommentsClose CommentsPermalink
‘(i) Administration- The Secretary shall carry out this section in consultation with the Securities and Exchange Commission and the Commodity Futures Trading Commission.CommentsClose CommentsPermalink
‘(1) provide guidance regarding such information reporting concerning covered transactions as the Secretary deems appropriate, including reporting by the payor of the tax in cases where the payor is not the purchaser, andCommentsClose CommentsPermalink
‘(2) prescribe such regulations as are necessary or appropriate to prevent avoidance of the purposes of this section, including the use of non-United States persons in such transactions.CommentsClose CommentsPermalink
(b) Penalty for Failure To Include Covered Transaction Information With Return- Part I of subchapter B of chapter 68 of the Internal Revenue Code of 1986 is amended by inserting after section 6707A the following new section:CommentsClose CommentsPermalink
‘SEC. 6707B. PENALTY FOR FAILURE TO INCLUDE COVERED TRANSACTION INFORMATION WITH RETURN.
‘(a) Imposition of Penalty- Any person who fails to include on any return or statement any information with respect to a covered transaction which is required pursuant to section 4475(j)(1) to be included with such return or statement shall pay a penalty in the amount determined under subsection (b).CommentsClose CommentsPermalink
‘(b) Amount of Penalty- Except as otherwise provided in this subsection, the amount of the penalty under subsection (a) with respect to any covered transaction shall be determined by the Secretary.CommentsClose CommentsPermalink
‘(1) IN GENERAL- The Commissioner of Internal Revenue may rescind all or any portion of any penalty imposed by this section with respect to any violation if rescinding the penalty would promote compliance with the requirements of this title and effective tax administration.CommentsClose CommentsPermalink
‘(3) RECORDS- If a penalty is rescinded under paragraph (1), the Commissioner shall place in the file in the Office of the Commissioner the opinion of the Commissioner with respect to the determination, including--CommentsClose CommentsPermalink
‘subchapter c. tax on trading transactions.’.
SEC. 4. OFFSETTING CREDIT FOR FINANCIAL TRANSACTION TAX.
(a) In General- Subpart A of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to nonrefundable personal credits) is amended by inserting after section 25D the following new section:CommentsClose CommentsPermalink
‘SEC. 25E. FINANCIAL TRANSACTION TAX PAYMENTS.
‘(a) Allowance of Credit- In the case of an individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the tax paid during the taxable year under section 4475.CommentsClose CommentsPermalink
‘(1) IN GENERAL- Subsection (a) shall not apply to a taxpayer for the taxable year if the modified adjusted gross income of the taxpayer for the taxable year exceeds $50,000 ($75,000 in the case of a joint return and one-half of such amount in the case of a married individual filing a separate return).CommentsClose CommentsPermalink
‘(ii) the cost-of-living adjustment determined under section (1)(f)(3) of the Internal Revenue Code of 1986 for the calendar year in which the taxable year begins, by substituting ‘2013’ for ‘1992’.CommentsClose CommentsPermalink
‘(2) CERTAIN INDIVIDUALS NOT ELIGIBLE- For purposes of paragraph (1), an individual described in any of the following provisions of this title for the preceding taxable year shall not be treated as an eligible individual for the taxable year:CommentsClose CommentsPermalink
(b) Clerical Amendment- The table of sections for subpart A of part IV of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to section 25D the following new item:CommentsClose CommentsPermalink