H.R. 4265 (112th): Shared Responsibility in Preserving America’s Future Act

112th Congress, 2011–2013. Text as of Mar 27, 2012 (Introduced).

Status & Summary | PDF | Source: GPO

I

112th CONGRESS

2d Session

H. R. 4265

IN THE HOUSE OF REPRESENTATIVES

March 27, 2012

introduced the following bill; which was referred to the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to impose a 5 percent tax on so much of adjusted gross income of any individual as exceeds $1,000,000, and to provide incentive for Congress to pass a balanced budget amendment, or spending limit amendment, to the Constitution.

1.

Short title

This Act may be cited as the Shared Responsibility in Preserving America’s Future Act .

2.

Surtax on millionaires contingent on Congressional passage of a balanced budget amendment or spending limit amendment

(a)

In general

Subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new part:

VIII

Surtax on millionaires

Sec. 59B. Surtax on millionaires.

59B.

Surtax on millionaires

(a)

General rule

In the case of a taxpayer other than a corporation for any taxable year beginning after 2012 and before 2023, there is hereby imposed (in addition to any other tax imposed by this subtitle) a tax equal to 5 percent of so much of the modified adjusted gross income of the taxpayer for such taxable year as exceeds the threshold amount.

(b)

Threshold amount

For purposes of this section—

(1)

In general

The threshold amount is $1,000,000.

(2)

Inflation adjustment

(A)

In general

In the case of any taxable year beginning after 2013, the $1,000,000 amount under paragraph (1) shall be increased by an amount equal to—

(i)

such dollar amount, multiplied by

(ii)

the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting calendar year 2012 for calendar year 1992 in subparagraph (B) thereof.

(B)

Rounding

If any amount as adjusted under paragraph (1) is not a multiple of $10,000, such amount shall be rounded to the next highest multiple of $10,000.

(3)

Married filing separately

In the case of a married individual filing separately for any taxable year, the threshold amount shall be one-half of the amount otherwise in effect under this subsection for the taxable year.

(c)

Modified adjusted gross income

For purposes of this section—

(1)

In general

The term modified adjusted gross income means adjusted gross income reduced by the excess of—

(A)

gross income from a trade or business—

(i)

which is not a passive activity (within the meaning of section 469(c)) with respect to the taxpayer, and

(ii)

with respect to which the taxpayer pays wages to at least 1 full-time equivalent employee (as defined in section 45R(d)(2) determined without regard to subsection (e)(1)(A)(iv) thereof), other than the taxpayer, over

(B)

the deductions which are properly allocable to such income.

(2)

Regulations

The Secretary shall prescribe regulations similar to the regulations under section 469(l) for determining the income that is taken into account under paragraph (1)(A).

(d)

Special rules

(1)

Nonresident alien

In the case of a nonresident alien individual, only amounts taken into account in connection with the tax imposed under section 871(b) shall be taken into account under this section.

(2)

Citizens and residents living abroad

The dollar amount in effect under subsection (a) shall be decreased by the excess of—

(A)

the amounts excluded from the taxpayer’s gross income under section 911, over

(B)

the amounts of any deductions or exclusions disallowed under section 911(d)(6) with respect to the amounts described in subparagraph (A).

(3)

Charitable trusts

Subsection (a) shall not apply to a trust all the unexpired interests in which are devoted to one or more of the purposes described in section 170(c)(2)(B).

(4)

Not treated as tax imposed by this chapter for certain purposes

The tax imposed under this section shall not be treated as tax imposed by this chapter for purposes of determining the amount of any credit under this chapter or for purposes of section 55.

(e)

Application of section contingent on balanced budget or spending limit amendment

(1)

Submission of amendment for ratification

This section shall not apply to any taxable year which begins before the date on which the President certifies that the Archivist of the United States has submitted to the States for their ratification a proposed amendment to the Constitution of the United States pursuant to a joint resolution entitled Joint resolution proposing a balanced budget amendment to the Constitution of the United States. or Joint resolution proposing a spending limit amendment to the Constitution of the United States.. If the certification referred to in the preceding sentence is not made by the President before September 30, 2012, this section shall not apply to any taxable year.

(2)

Ratification

This section shall not apply to any taxable year beginning after December 31, 2017, unless, on or before such date, such an amendment, by ratification, becomes valid to all intents and purposes as part of the Constitution of the United States.

.

(b)

Clerical amendment

The table of parts for subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item:

Part VIII. Surtax on Millionaires

.

(c)

Section 15 not To apply

The amendment made by subsection (a) shall not be treated as a change in a rate of tax for purposes of section 15 of the Internal Revenue Code of 1986.

(d)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2012.