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S. 321 (113th): Paying a Fair Share Act of 2013

The text of the bill below is as of Feb 13, 2013 (Introduced).


II

113th CONGRESS

1st Session

S. 321

IN THE SENATE OF THE UNITED STATES

February 13, 2013

(for himself,Ms. Baldwin,Mr. Blumenthal,Mr. Leahy,Mr. Reed,Mr. Lautenberg,Mr. Levin,Mr. Sanders,Mr. Rockefeller,Mr. Harkin, andMr. Franken) introduced the following bill; which was read twice and referred to theCommittee on Finance

A BILL

To reduce the deficit by imposing a minimum effective tax rate for high-income taxpayers.

1.

Short title

This Act may be cited as the Paying a Fair Share Act of 2013 .

2.

Fair share tax on high-income taxpayers

(a)

In general

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

VIII

Fair share tax on high-income taxpayers

Sec. 59B. Fair share tax.

59B.

Fair share tax

(a)

General rule

(1)

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—

(A)

the amount determined underparagraph (2), and

(B)

a fraction (not to exceed 1)—

(i)

the numerator of which is the excess of—

(I)

the taxpayer's adjusted gross income, over

(II)

the dollar amount in effect undersubsection (c)(1), and

(ii)

the denominator of which is the dollar amount in effect undersubsection (c)(1).

(2)

Amount of tax

The amount of tax determined under this paragraph is an amount equal to the excess (if any) of—

(A)

the tentative fair share tax for the taxable year, over

(B)

the excess of—

(i)

the sum of—

(I)

the regular tax liability (as defined insection 26(b)) for the taxable year, determined without regard to any tax liability determined under this section,

(II)

the tax imposed bysection 55for the taxable year, plus

(III)

the payroll tax for the taxable year, over

(ii)

the credits allowable underpart IV of subchapter A(other thansections 27(a),31, and34).

(b)

Tentative fair share tax

For purposes of this section—

(1)

In general

The tentative fair share tax for the taxable year is 30 percent of the excess of—

(A)

the adjusted gross income of the taxpayer, over

(B)

the modified charitable contribution deduction for the taxable year.

(2)

Modified charitable contribution deduction

For purposes ofparagraph (1)

(A)

In general

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 undersection 170(section 642(c)in the case of a trust or estate) for such taxable year as—

(i)

the amount of itemized deductions allowable under the regular tax (as defined insection 55) for such taxable year, determined after the application ofsection 68, bears to

(ii)

such amount, determined before the application ofsection 68.

(B)

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.

(c)

High-Income taxpayer

For purposes of this section—

(1)

In general

The termhigh-income taxpayermeans, 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).

(2)

Inflation adjustment

(A)

In general

In the case of a taxable year beginning after 2014, the $1,000,000 amount underparagraph (1)shall be increased by an amount equal to—

(i)

such dollar amount, multiplied by

(ii)

the cost-of-living adjustment determined undersection 1(f)(3)for the calendar year in which the taxable year begins, determined by substitutingcalendar year 2013forcalendar year 1992insubparagraph (B)thereof.

(B)

Rounding

If any amount as adjusted undersubparagraph (A)is not a multiple of $10,000, such amount shall be rounded to the next lowest multiple of $10,000.

(d)

Payroll tax

For purposes of this section, the payroll tax for any taxable year is an amount equal to the excess of—

(1)

the taxes imposed on the taxpayer undersections 1401,1411,3101,3201, and3211(a)(to the extent such tax is attributable to the rate of tax in effect undersection 3101) with respect to such taxable year or wages or compensation received during such taxable year, over

(2)

the deduction allowable undersection 164(f)for such taxable year.

(e)

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 insection 67(e).

(f)

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 undersection 27(a)) or for purposes ofsection 55.

.

(b)

Clerical amendment

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

Part VIII—Fair share tax on high-Income taxpayers

.

(c)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2013.

3.

Sense of the Senate regarding tax reform

It is the sense of theSenatethat—

(1)

Congressshould enact tax reform that repeals unfair and unnecessary tax loopholes and expenditures, simplifies the system for millions of taxpayers and businesses, and makes sure that the wealthiest taxpayers pay a fair share; and

(2)

this Act is an interim step that can be done quickly and serve as a floor on taxes for the highest-income taxpayers, cut the deficit by billions of dollars a year, and help encourage more fundamental reform of the tax system.