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H.R. 2380 (111th): Raise Wages, Cut Carbon Act of 2009

The text of the bill below is as of May 13, 2009 (Introduced).

I

111th CONGRESS

1st Session

H. R. 2380

IN THE HOUSE OF REPRESENTATIVES

May 13, 2009

(for himself, Mr. Lipinski, and Mr. Flake) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Rules, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To amend the Internal Revenue Code of 1986 to reduce social security payroll taxes and to reduce the reliance of the United States economy on carbon-based energy sources.

1.

Short title

This Act may be cited as the Raise Wages, Cut Carbon Act of 2009.

2.

Reduction of social security taxes; tax on combustible fossil fuels

(a)

In general

Chapter 38 of the Internal Revenue Code of 1986 (relating to environmental taxes) is amended by adding at the end thereof the following new subchapter:

E

Reduction of social security taxes; tax on combustible fossil fuels

Part I. Carbon tax revenues To offset social security taxes.

Part II. Tax on combustible fossil fuels.

Part III. Tax on certain additional imported substances.

Part IV. Supermajority required To change revenue neutrality

I

Carbon tax revenues To offset social security taxes

Sec. 4691. Disposition of revenues.

4691.

Disposition of revenues

(a)

Amounts appropriated to social security trust funds

(1)

In general

There are hereby appropriated to the social security trust funds an amount equal to the net revenues received in the Treasury from the taxes imposed by parts II and III.

(2)

Allocation among funds

Amounts shall be appropriated to such funds under paragraph (1) in the same proportions as amounts would (but for this subchapter) be appropriated to such funds under the Social Security Act and the Railroad Retirement Act of 1974.

(b)

Reduction in social security taxes

(1)

In general

The rate of each social security tax for each calendar year (determined without regard to this section) shall be reduced by the number of percentage points equal to—

(A)

such rate, multiplied by

(B)

the reduction percentage determined by the Secretary for such year.

(2)

Reduction percentage

The reduction percentage determined by the Secretary under paragraph (1) for any calendar year shall be the highest percentage which the Secretary estimates will result in deposits into each trust fund equal to the amount which would (without regard to this section) be appropriated to each trust fund for such year on account of social security taxes.

(c)

Increase in payments to social security recipients for 2010 To offset cost of carbon tax before tax reflected in cost-of-living adjustments

The Secretary shall notify the Managing Trustee of the Federal Old-Age and Survivors Insurance Trust Fund established under section 201 of the Social Security Act to increase the payments to which an individual is entitled under section 205(i) of such Act for 2010 by the average cost of the taxes imposed by parts II and III which is borne by individuals who are so entitled by reason of price increases in the costs of products and services.

(d)

Definitions

For purposes of this subchapter—

(1)

Social security tax

The term social security tax means—

(A)

the tax imposed by section 3101(a) (and so much of the tax imposed by section 3201(a) as is determined by reference to the tax imposed by section 3101(a)),

(B)

the tax imposed by section 3111(a) (and so much of the tax imposed by section 3221(a) as is determined by reference to the tax imposed by section 3111(a)), and

(C)

the tax imposed by section 1401(a) (and so much of the tax imposed by section 3211(a) as is determined by reference to the taxes imposed by sections 3101(a) and 3111(a)).

(2)

Social security trust fund

The term social security trust fund means—

(A)

the Federal Old-Age and Survivors Insurance Trust Fund established by section 202 of the Social Security Act, and

(B)

the Social Security Equivalent Benefit Account established under section 15A of the Railroad Retirement Act of 1974.

(e)

Determination based on estimates

Determination under subsections (a) and (b) shall be made on the basis of estimates by the Secretary. Proper adjustments shall be made to the extent prior estimates were in excess of or less than more accurate amounts.

(f)

Publication of rate reductions

Any adjustment under this section of social security tax rates for any calendar year shall be published in the Federal Register on or before November 1 of the preceding calendar year.

II

Tax on combustible fossil fuels

Sec. 4692. Imposition of tax.

Sec. 4693. Refunds or credits.

Sec. 4694. Other definitions and special rules.

4692.

Imposition of tax

(a)

In general

There is hereby imposed a tax on any taxable carbon substance sold by the manufacturer, producer, or importer thereof.

(b)

Amount of tax

(1)

In general

The amount of tax imposed by subsection (a) on any taxable carbon substance shall be the applicable amount per ton of the carbon dioxide emissions potential of such substance, as determined by the Secretary in consultation with the Secretary of Energy.

(2)

Fractional part of ton

In the case of a fraction of a ton, the tax imposed by subsection (a) shall be the same fraction of the amount of such tax imposed on a whole ton.

(3)

Applicable amount

For purposes of paragraph (1)—

(A)

In general

The applicable amount for any calendar year is the amount determined under the following table for such year, as adjusted under subparagraph (B):

In the case of calendar year—The applicable amount is—
2010$ 15.00
2011 15.98
201217.02
201318.13
201419.32
201520.58
201621.92
201723.35
201824.88
201926.50
202028.23
202130.07
202232.04
202334.13
202436.36
202538.73
202641.26
202743.95
202846.82
202949.88
203053.13
203156.60
203260.30
203364.23
203468.43
203572.89
203677.65
203782.72
203888.12
203993.87
2040 or thereafter100.00.
(B)

Inflation adjustment

(i)

In general

The applicable amount contained in the table under subparagraph (A) for any calendar year after 2010 shall be increased by an amount equal to—

(I)

such applicable amount, multiplied by

(II)

the cost-of-living adjustment determined under section 1(f)(3) for such calendar year, determined by substituting calendar year 2009 for calendar year 1992 in subparagraph (B) thereof.

(ii)

Rounding

Any increase determined under clause (i) shall be rounded to the nearest cent.

(c)

Taxable carbon substance

For purposes of this subchapter, the term taxable carbon substance means—

(1)

coal (including lignite and peat),

(2)

petroleum and any petroleum product (as defined in section 4612(a)(3)), and

(3)

natural gas,

which is extracted, manufactured, or produced in the United States or entered into the United States for consumption, use, or warehousing.
(d)

Substance taxed only once

No tax shall be imposed by subsection (a) with respect to a taxable carbon substance if the person who would be liable for such tax establishes that a prior tax imposed by such section has been imposed with respect to such substance.

4693.

Refunds or credits

(a)

Sequestered carbon

Under regulations prescribed by the Secretary, if a person uses a taxable carbon substance so that the carbon associated with such substance will not be emitted, then an amount equal to the amount of tax in effect under section 4692(b) with respect to such substance for the calendar year in which such use begins shall be allowed as a credit or refund (without interest) to such person in the same manner as if it were an overpayment of tax imposed by section 4692.

(b)

Previously taxed carbon substances used To make another taxable carbon substance

Under regulations prescribed by the Secretary, if—

(1)

a tax under section 4692 was paid with respect to any taxable carbon substance, and

(2)

such substance was used by any person in the manufacture or production of any other substance which is a taxable carbon substance,

then an amount equal to the tax so paid shall be allowed as a credit or refund (without interest) to such person in the same manner as if it were an overpayment of tax imposed by section 4692. In any case to which this subsection applies, the amount of any such credit or refund shall not exceed the amount of tax imposed by section 4692 on the other taxable fuel manufactured or produced (or which would have been imposed by such subsection on such other fuel but for section 4692(d)).
(c)

Exemption for exports

(1)

Tax-free sales

(A)

In general

No tax shall be imposed under subsection (a) on the sale by the manufacturer or producer of any taxable carbon substance for export or for resale by the purchaser to a second purchaser for export.

(B)

Proof of export required

Rules similar to the rules of section 4221(b) shall apply for purposes of subparagraph (A).

(2)

Credit or refund

If—

(A)

any person exports—

(i)

a taxable carbon substance, or

(ii)

any other product any portion of the cost of which is attributable to the use of any taxable carbon substance as an energy source for the manufacture or production of such product, and

(B)

such person establishes to the satisfaction of the Secretary the portion of such cost which is attributable to the tax under section 4692,

credit or refund (without interest) of such tax shall be allowed or made to such person.
(3)

Regulations

The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this subsection.

4694.

Other definitions and special rules

(a)

Definitions

For purposes of this subchapter—

(1)

United States

The term United States has the meaning given such term by section 4612(a)(4).

(2)

Importer

The term importer means the person entering the article for consumption, use, or warehousing.

(3)

Ton

The term ton means 2,000 pounds. In the case of any taxable carbon substance which is a gas, the term ton means the amount of such gas in cubic feet which is the equivalent of 2,000 pounds on a molecular weight basis.

(b)

Use treated as sale

If any person manufactures, produces, or imports any taxable carbon substance and uses such substance, then such person shall be liable for tax under section 4692 in the same manner as if such substance were sold by such person.

(c)

Special rules for inventory exchanges

(1)

In general

Except as provided in paragraph (2), in any case in which a manufacturer, producer, or importer of a taxable carbon substance exchanges such substance as part of an inventory exchange with another person—

(A)

such exchange shall not be treated as a sale, and

(B)

such other person shall, for purposes of section 4692, be treated as the manufacturer, producer, or importer of such substance.

(2)

Registration requirement

Paragraph (1) shall not apply to any inventory exchange unless—

(A)

both parties are registered with the Secretary as manufacturers, producers, or importers of taxable carbon substances, and

(B)

the person receiving the taxable carbon substance has, at such time as the Secretary may prescribe, notified the manufacturer, producer, or importer of such person’s registration number and the internal revenue district in which such person is registered.

(3)

Inventory exchange

For purposes of this subsection, the term inventory exchange means any exchange in which 2 persons exchange property which is, in the hands of each person, property described in section 1221(a)(1).

III

Tax on certain additional imported products

Sec. 4695. Imposition of tax.

Sec. 4696. Imported taxable product.

4695.

Imposition of tax

(a)

In general

There is hereby imposed a tax on any imported taxable product sold or used by the importer thereof.

(b)

Amount of tax

The amount of the tax imposed by subsection (a) with respect to any imported taxable product shall be the applicable amount under section 4692 per ton on the lesser of—

(1)

the taxable carbon substances used in the manufacture or production of such product, or

(2)

the carbon dioxide emissions attributable to the manufacture or production of such product.

(c)

Procedure To challenge information provided by importer

The Secretary shall establish a procedure under which interested persons may examine the information provided by an importer for purposes of this section, and bring to the attention of the Secretary any suspected errors in such information.

4696.

Imported taxable product

(a)

In general

For purposes of this part, the term imported taxable product means any article which, at the time of such article’s sale or use by the importer, is described in the same heading of the Harmonized Tariff Schedule of the United States as a like article produced in a listed industry.

(b)

Listed industry

For purposes of this section—

(1)

In general

Except as provided in paragraph (2), the term listed industry means any industry listed by the Administrator as being among the industries which, in the aggregate, account for 95 percent of the taxable carbon substances used in the United States. An industry may not be omitted from the list under the preceding sentence if it uses more taxable carbon substances per unit of output than any industry which is so listed.

(2)

Special rule for 2010 through 2012

(A)

2010

During 2010, the term listed industry shall include only the 6 industries on the list under paragraph (1) having the highest average use of taxable carbon substances per unit of output.

(B)

2011 and 2012

During 2011 and 2012, the term listed industry shall include only—

(i)

the industries described in subparagraph (A), and

(ii)(I)

in the case of 2011, the 1/3 of the remaining industries on such list having the highest average use of taxable carbon substances per unit of output, or

(II)

in the case of 2012, the 2/3 of the remaining industries on such list having the highest average use of taxable carbon substances per unit of output.

(c)

Other definitions

For purposes of this part, the terms importer, taxable carbon substance, and United States have the respective meanings given such terms by part II.

IV

Supermajority required To change revenue neutrality

4697.

Supermajority required

A bill, joint resolution, amendment to a bill or joint resolution, or conference report that increases aggregate revenues under parts II and III greater than the aggregate reduction in revenues under part I may not be considered as passed or agreed to by the House of Representatives or the Senate unless so determined by a vote of not less than two-thirds of the Members of the House of Representatives or the Senate (as the case may be) voting, a quorum being present.

.

(b)

Clerical amendment

The table of subchapters for chapter 38 of such Code is amended by adding at the end the following new item:

Subchapter F. Reduction of social security taxes; tax on combustible fossil fuels.

(c)

Effective date

The amendments made by this section shall take effect on January 1, 2010.