H. R. 5333
IN THE HOUSE OF REPRESENTATIVES
May 7, 2012
Ms. Berkley introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on the Budget, 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
To amend the Internal Revenue Code of 1986 to make permanent the deduction of State and local general sales taxes, and for other purposes.
Short title, etc
This Act may be cited
Middle Class Tax Fairness Act
Table of contents
The table of contents for this Act is as follows:
Sec. 1. Short title, etc.
Title I—Permanent Extension of Deduction of State and Local General Sales Taxes
Sec. 101. Permanent extension of deduction of State and local general sales taxes.
Title II—Revenue Offsets
Subtitle A—Fair Share Tax on High-Income Taxpayers
Sec. 201. Fair share tax on high-income taxpayers.
Sec. 211. Deficit reduction.
Sec. 212. Budgetary effects.
Permanent Extension of Deduction of State and Local General Sales Taxes
Permanent extension of deduction of State and local general sales taxes
Subparagraph (I) of
section 164(b)(5) of the Internal Revenue Code of 1986 is amended by striking
, and before January 1, 2012.
The amendment made by subsection (a) shall apply to taxable years beginning after December 31, 2011.
Fair Share Tax on High-Income Taxpayers
Fair share tax on high-income taxpayers
Subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new part:
Fair Share Tax On High-Income Taxpayers
Sec. 59B. Fair share tax.
Fair share tax
Phase-in of tax
In the case of any high-income taxpayer, there is hereby imposed for a taxable year (in addition to any other tax imposed by this subtitle) a tax equal to the product of—
the amount determined under paragraph (2), and
a fraction (not to exceed 1)—
the numerator of which is the excess of—
the taxpayer's adjusted gross income, over
the dollar amount in effect under subsection (c)(1), and
the denominator of which is the dollar amount in effect under subsection (c)(1).
Amount of tax
The amount of tax determined under this paragraph is an amount equal to the excess (if any) of—
the tentative fair share tax for the taxable year, over
the excess of—
the sum of—
the regular tax liability (as defined in section 26(b)) for the taxable year,
the tax imposed by section 55 for the taxable year, plus
the payroll tax for the taxable year, over
the credits allowable under part IV of subchapter A (other than sections 27(a), 31, and 34).
Tentative fair share tax
For purposes of this section—
The tentative fair share tax for the taxable year is 30 percent of the excess of—
the adjusted gross income of the taxpayer, over
the modified charitable contribution deduction for the taxable year.
Modified charitable contribution deduction
For purposes of paragraph (1)—
The modified charitable contribution deduction for any taxable year is an amount equal to the amount which bears the same ratio to the deduction allowable under section 170 (section 642(c) in the case of a trust or estate) for such taxable year as—
the amount of itemized deductions allowable under the regular tax (as defined in section 55) for such taxable year, determined after the application of section 68, bears to
such amount, determined before the application of section 68.
Taxpayer must itemize
In the case of any individual who does not elect to itemize deductions for the taxable year, the modified charitable contribution deduction shall be zero.
For purposes of this section—
The term high-income taxpayer means, with respect to any taxable year, any taxpayer (other than a corporation) with an adjusted gross income for such taxable year in excess of $1,000,000 (50 percent of such amount in the case of a married individual who files a separate return).
In the case of a taxable year beginning after 2013, the $1,000,000 amount under paragraph (1) shall be increased by an amount equal to—
such dollar amount, multiplied by
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.
If any amount as adjusted under subparagraph (A) is not a multiple of $10,000, such amount shall be rounded to the next lowest multiple of $10,000.
For purposes of this section, the payroll tax for any taxable year is an amount equal to the excess of—
the taxes imposed on the taxpayer under sections 1401, 1411, 3101, 3201, and 3211(a) (to the extent such taxes are attributable to the rate of tax in effect under section 3101) with respect to such taxable year or wages or compensation received during the taxable year, over
the deduction allowable under section 164(f) for such taxable year.
Special rule for estates and trusts
For purposes of this section, in the case of an estate or trust, adjusted gross income shall be computed in the manner described in section 67(e).
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 (other than the credit allowed under section 27(a)) or for purposes of section 55.
Section 26(b)(2) of the Internal Revenue Code of 1986 is amended by redesignating subparagraphs (C) through (X) as subparagraphs (D) through (Y), respectively, and by inserting after subparagraph (B) the following new subparagraph:
section 59B (relating to fair share tax),
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 VII. Fair Share Tax on High-Income Taxpayers
The amendments made by this section shall apply to taxable years beginning after December 31, 2012.
The net amount of any savings realized as a result of the enactment of this Act and the amendments made by this Act (after any expenditures authorized by this Act and the amendments made by this Act) shall be deposited in the Treasury and used for Federal budget deficit reduction or, if there is no Federal budget deficit, for reducing the Federal debt in such manner as the Secretary of the Treasury considers appropriate.
The budgetary effects
of this Act, for the purpose of complying with the Statutory Pay-As-You-Go Act
of 2010, shall be determined by reference to the latest statement titled
Budgetary Effects of PAYGO Legislation for this Act, submitted
for printing in the Congressional Record by the Chairman of the House Budget
Committee, provided that such statement has been submitted prior to the vote on