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HR 58 Fair Share Act of 2014
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Topic Started: 12 Jun 2013, 01:02 AM (390 Views)
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Heather Holson
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12 Jun 2013, 01:02 AM
Post #1
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48 hours for debate
- Quote:
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Mrs. KILINGER, for herself, submits
A BILL
to be known as the "Fair Share Act of 2014."
SEC. 1. REFERENCE. Except as otherwise expressly provided, whenever an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986.
SEC. 2. FAIR SHARE TAX ON HIGH-INCOME TAXPAYERS. (a) In General- Subchapter A of chapter 1 is amended by adding at the end the following new part:
‘PART VIII--FAIR SHARE TAX ON HIGH-INCOME TAXPAYERS ‘Sec. 59B. Fair share tax.
‘SEC. 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 under paragraph (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 under subsection (c)(1), and
‘(ii) the denominator of which is $4,000,000 ($2,000,000 in the case of a married individual who files a separate return).
‘(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 in section 26(b)) for the taxable year, determined without regard to any tax liability determined under this section,
‘(II) the tax imposed by section 55 for the taxable year, plus
‘(III) the payroll tax for the taxable year, over
‘(ii) the credits allowable under part IV of subchapter A (other than sections 27(a), 31, and 34).
‘(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 of paragraph (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 under section 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 in section 55) for such taxable year, determined after the application of section 68, bears to
‘(ii) such amount, determined before the application of section 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 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).
‘(2) INFLATION ADJUSTMENT-
‘(A) IN GENERAL- 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--
‘(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 subparagraph (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 under sections 1401, 1411, 3101, 3201, and 3211(a) (to the extent such tax is attributable to the rate of tax in effect under section 3101) with respect to such taxable year or wages or compensation received during such taxable year, over
‘(2) the deduction allowable under section 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 in section 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 under section 27(a)) or for purposes of section 55.’.
(b) Clerical Amendment- The table of parts for subchapter A of chapter 1 is 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.
SEC. 3. DENIAL OF DEDUCTION FOR OUTSOURCING EXPENSES. (a) In General- Part IX of subchapter B of chapter 1 is amended by adding at the end the following new section:
‘SEC. 280I. OUTSOURCING EXPENSES. ‘(a) In General- No deduction otherwise allowable under this chapter shall be allowed for any specified outsourcing expense.
‘(b) Specified Outsourcing Expense- For purposes of this section--
‘(1) IN GENERAL- The term ‘specified outsourcing expense’ means--
‘(A) any eligible expense paid or incurred by the taxpayer in connection with the elimination of any business unit of the taxpayer (or of any member of any expanded affiliated group in which the taxpayer is also a member) located within the United States, and
‘(B) any eligible expense paid or incurred by the taxpayer in connection with the establishment of any business unit of the taxpayer (or of any member of any expanded affiliated group in which the taxpayer is also a member) located outside the United States,
if such establishment constitutes the relocation of the business unit so eliminated. For purposes of the preceding sentence, a relocation shall not be treated as failing to occur merely because such elimination occurs in a different taxable year than such establishment.
‘(2) ELIGIBLE EXPENSES- The term ‘eligible expenses’ means--
‘(A) any amount for which a deduction is allowed to the taxpayer under section 162, and
‘(B) permit and license fees, lease brokerage fees, equipment installation costs, and, to the extent provided by the Secretary, other similar expenses.
Such term does not include any compensation which is paid or incurred in connection with severance from employment and, to the extent provided by the Secretary, any similar amount.
‘(3) BUSINESS UNIT- The term ‘business unit’ means--
‘(A) any trade or business, and
‘(B) any line of business, or functional unit, which is part of any trade or business.
‘(4) EXPANDED AFFILIATED GROUP- The term ‘expanded affiliated group’ means an affiliated group as defined in section 1504(a), determined without regard to section 1504(b)(3) and by substituting ‘more than 50 percent’ for ‘at least 80 percent’ each place it appears in section 1504(a). A partnership or any other entity (other than a corporation) shall be treated as a member of an expanded affiliated group if such entity is controlled (within the meaning of section 954(d)(3)) by members of such group (including any entity treated as a member of such group by reason of this paragraph).
‘(5) OPERATING EXPENSES NOT TAKEN INTO ACCOUNT- Any amount paid or incurred in connection with the on-going operation of a business unit shall not be treated as an amount paid or incurred in connection with the establishment or elimination of such business unit.
‘(c) Special Rules-
‘(1) APPLICATION TO DEDUCTIONS FOR DEPRECIATION AND AMORTIZATION- In the case of any portion of a specified outsourcing expense which is not deductible in the taxable year in which paid or incurred, such portion shall neither be chargeable to capital account nor amortizable.
‘(2) POSSESSIONS TREATED AS PART OF THE UNITED STATES- For purposes of this section, the term ‘United States’ shall be treated as including each possession of the United States (including the Commonwealth of Puerto Rico and the Commonwealth of the Northern Mariana Islands).
‘(d) Regulations- The Secretary shall prescribe such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this section, including regulations which provide (or create a rebuttable presumption) that certain establishments of business units outside the United States will be treated as relocations (based on timing or such other factors as the Secretary may provide) of business units eliminated within the United States.’.
(b) Limitation on Subpart F Income of Controlled Foreign Corporations Determined Without Regard to Specified Outsourcing Expenses- Subsection (c) of section 952 is amended by adding at the end the following new paragraph:
‘(4) EARNINGS AND PROFITS DETERMINED WITHOUT REGARD TO SPECIFIED OUTSOURCING EXPENSES- For purposes of this subsection, earnings and profits of any controlled foreign corporation shall be determined without regard to any specified outsourcing expense (as defined in section 280I(b)).’.
(c) Clerical Amendment- The table of sections for part IX of subchapter B of chapter 1 is amended by adding at the end the following new item:
‘Sec. 280I. Outsourcing expenses.’.
(d) Effective Date- The amendments made by this section shall apply to amounts paid or incurred after the date of the enactment of this Act.
SEC. 4. MODIFICATIONS TO THE TAX ON PETROLEUM. (a) Definition of Crude Oil- Paragraph (1) of section 4612(a) is amended to read as follows:
‘(1) CRUDE OIL- The term ‘crude oil’ includes crude oil condensates, natural gasoline, any bitumen or bituminous mixture, and any oil derived from a bitumen or bituminous mixture.’.
(b) Removing Restrictions Relating to Oil Wells and Extraction Methods- Paragraph (2) of section 4612(a) is amended by striking ‘from a well located’.
(c) Clerical Amendment- Subclause (I) of section 4612(e)(2)(B)(ii) is amended by striking ‘tranferred’ and inserting ‘transferred’.
(d) Effective Date- The amendments made by subsections (a) and (b) shall apply to oil and petroleum products received or entered during calendar quarters beginning more than 60 days after the date of the enactment of this Act.
SEC 5. REVOCATION OF THE ALTERNATIVE MINIMUM INCOME TAX (AMT)
(a) For purposes of this legislation, "taxpayer" is defined as any individual, corporation, trust, or estate required to report income to the Internal Revenue Service for the purpose of calculating and paying tax.
(b) 26 USC 55, commonly known as the Alternative Minimum Income Tax, is hereby revoked.
SEC. 6. PLAIN ENGLISH SUMMARY. Amends the Internal Revenue Code to require an individual taxpayer whose adjusted gross income exceeds $1 million to pay a minimum income tax rate of 30% of the excess of the taxpayer's adjusted gross income over the taxpayer's modified charitable contribution deduction for the taxable year (tentative fair share tax).
Establishes the amount of such tax as the excess (if any) of the tentative fair share tax over the excess of: (1) the sum of the taxpayer's regular tax liability, the alternative minimum tax (AMT) amount, and the payroll tax for the taxable year; over (2) certain tax credits.
Requires an inflation adjustment to the $1 million income threshold for taxable years beginning after 2013.
Denies a tax deduction for specified outsourcing expenses.
Defines "specified outsourcing expense" to mean business-related expenses and fees incurred in connection with the elimination of any business unit of the taxpayer located within the United States and the establishment of such business unit outside the United States.
Expands the definition of "crude oil" for purposes of the excise tax on crude oil and petroleum products to include crude oil condensates, natural gasoline, any bitumen or bituminous mixture, and any oil derived from a bitumen or bituminous mixture.
Modifies the definition of "domestic crude oil" to mean any crude oil produced in the United States (currently, any crude oil produced from a well located in the United States).
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Nick
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12 Jun 2013, 01:08 AM
Post #2
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Madame Speaker,
I request Unanimous Consent.
I yield.
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Heather Holson
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12 Jun 2013, 01:10 AM
Post #3
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The motion to suspend the rules and pass the bill by unanimous consent is recognized. 24 hours for objections.
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Matt Urbana
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12 Jun 2013, 01:12 AM
Post #4
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Madam Speaker,
I vehemently object to unanimous consent. How can we, in good faith, ask those who already suffer the largest tax burden in our country to allow the government to reach even farther into their pocketbooks?
I will soon be offering an amendment (OOC: tomorrow morning) to correct the flaws in this bill.
I yield.
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Heather Holson
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12 Jun 2013, 01:13 AM
Post #5
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Objection noted. Debate continues.
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Terrus
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12 Jun 2013, 01:57 AM
Post #6
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Madame Speaker,
Those that reap the greatest benefits for the society maintained by our government owe a responsibility to pay the most to support that government. I am sorry that a millionaire might need to put off buying more luxury goods for a fiscal year because of a tax hike, but I am sure that somehow, such an individual can make do.
I yield.
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Melissa Sanchez
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12 Jun 2013, 08:18 AM
Post #7
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Madam Speaker,
President John F. Kennedy attempted to ensure that the most wealthy would not be able, through deductions and credits, to not pay any income tax. The results of that program was the Alternative Minimum Tax, which has come back to haunt this body again and again.
This, on the other hand, appears to actually deal with the matter in a substantially cleaner manner, although not as completely as one would hope.
In the understanding that a taxpayer would include a corporation, trust, or estate, I would propose to insert the following as Section 5, with Section 5 renumbered as Section 6:
SEC 5. REVOCATION OF THE ALTERNATIVE MINIMUM INCOME TAX (AMT)
(a) For purposes of this legislation, "taxpayer" is defined as any individual, corporation, trust, or estate required to report income to the Internal Revenue Service for the purpose of calculating and paying tax.
(b) 26 USC 55, commonly known as the Alternative Minimum Income Tax, is hereby revoked.
I yield the floor at this time, but reserve the balance of my time.
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peter
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12 Jun 2013, 08:22 AM
Post #8
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Lucas for President: Take Back America!
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Madam Speaker
I second the amendment offered by the gentlelady from Florida.
I yield.
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The Doctor
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12 Jun 2013, 08:23 AM
Post #9
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#Luke2016 (The Hope of Democrats everywhere)
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Madame Speaker
It really is wonderful to see a few certain members of this body show themselves to be nothing more than socialists in the barest sense of the word. What a pathetic bill.
I yield the floor in disgust
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Melissa Sanchez
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12 Jun 2013, 08:37 AM
Post #10
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Madam Speaker,
I request permission to revise and extend my remarks.
In response to the Gentleman from Utah, there is an argument to be made that all citizens should pay to support their government, as they are able.
The Fair Share Tax is a successor to the Alternative Minimum Tax, which was an attempt to do so that was....shall we say, not so successful.
Arguably, even the poor should pay a token amount, but between the complexities of the Earned Income Tax Credit, the Social Security Tax, and the Medicare Tax, I am not at all sure how one would present it in a way that is acceptable.
In dealing with the rich, however, and I believe anyone would have to agree that anyone with an income of over $1 million qualifies as rich, we have historically asked for much more. In the period of 1946-1964, the top bracket was taxed at a rate of 91%.
I think we can all agree that 91% is too much. I find it hard to envision that the Gentleman thinks 30% is.
I yield the floor, but reserve the balance of my time.
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The Doctor
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12 Jun 2013, 08:51 AM
Post #11
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#Luke2016 (The Hope of Democrats everywhere)
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Madame Speaker
Just because one does not need a large portion of their income to survive, does not mean that the government should be taking what they don't need. That's socialism, pure and simple. 20% is too much, and 30% is way too much. Ideally, we should be looking at across-the-board tax rates in the vicinity of about 10%, but I have the good sense too know that's that's not going to happen. We most certainly should not, however, be going backwards like we would be we both passage of this pathetic bill. I sure as heck don't have a million dollars, but if I did, I certainly wouldn't want the government to take take more and more of my hard-earned money, simply for the crime of being rich.
I yield
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Matt Urbana
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12 Jun 2013, 09:19 AM
Post #12
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- Terrus
- 12 Jun 2013, 01:57 AM
Madame Speaker,
Those that reap the greatest benefits for the society maintained by our government owe a responsibility to pay the most to support that government. I am sorry that a millionaire might need to put off buying more luxury goods for a fiscal year because of a tax hike, but I am sure that somehow, such an individual can make do.
I yield. Madam Speaker,
I am surprised and appalled to hear that the Gentleman from Michigan believes that jobs are a luxury good. The people he is asking to pay more to the government already are the ones contributing the most, and they are similarly the ones contributing most to society. These people are job creators, plain and simple, and to view them as an unlimited fountain of money will only serve to destroy jobs.
I, too, believe that those that reap the greatest benefits for society must pay to support it. This is why I will soon be introducing an amendment to this bill that would call upon all Americans to pay a flat tax rate, eliminating the current unfairness in the system.
I yield.
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Matt Urbana
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12 Jun 2013, 09:48 AM
Post #13
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Madam President,
I move to amend as follows:
- Quote:
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SEC. 2. FAIR SHARE TAX ON HIGH-INCOME TAXPAYERS. (a) In General- Subchapter A of chapter 1 is amended by adding at the end the following new part:
‘PART VIII--FAIR SHARE TAX ON HIGH-INCOME TAXPAYERS ‘Sec. 59B. Fair share tax.
‘SEC. 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 under paragraph (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 under subsection (c)(1), and
‘(ii) the denominator of which is $4,000,000 ($2,000,000 in the case of a married individual who files a separate return).
‘(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 in section 26(b)) for the taxable year, determined without regard to any tax liability determined under this section,
‘(II) the tax imposed by section 55 for the taxable year, plus
‘(III) the payroll tax for the taxable year, over
‘(ii) the credits allowable under part IV of subchapter A (other than sections 27(a), 31, and 34).
‘(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 of paragraph (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 under section 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 in section 55) for such taxable year, determined after the application of section 68, bears to
‘(ii) such amount, determined before the application of section 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 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).
‘(2) INFLATION ADJUSTMENT-
‘(A) IN GENERAL- 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--
‘(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 subparagraph (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 under sections 1401, 1411, 3101, 3201, and 3211(a) (to the extent such tax is attributable to the rate of tax in effect under section 3101) with respect to such taxable year or wages or compensation received during such taxable year, over
‘(2) the deduction allowable under section 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 in section 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 under section 27(a)) or for purposes of section 55.’.
(b) Clerical Amendment- The table of parts for subchapter A of chapter 1 is 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.
SEC. 3. DENIAL OF DEDUCTION FOR OUTSOURCING EXPENSES. (a) In General- Part IX of subchapter B of chapter 1 is amended by adding at the end the following new section:
‘SEC. 280I. OUTSOURCING EXPENSES. ‘(a) In General- No deduction otherwise allowable under this chapter shall be allowed for any specified outsourcing expense.
‘(b) Specified Outsourcing Expense- For purposes of this section--
‘(1) IN GENERAL- The term ‘specified outsourcing expense’ means--
‘(A) any eligible expense paid or incurred by the taxpayer in connection with the elimination of any business unit of the taxpayer (or of any member of any expanded affiliated group in which the taxpayer is also a member) located within the United States, and
‘(B) any eligible expense paid or incurred by the taxpayer in connection with the establishment of any business unit of the taxpayer (or of any member of any expanded affiliated group in which the taxpayer is also a member) located outside the United States,
if such establishment constitutes the relocation of the business unit so eliminated. For purposes of the preceding sentence, a relocation shall not be treated as failing to occur merely because such elimination occurs in a different taxable year than such establishment.
‘(2) ELIGIBLE EXPENSES- The term ‘eligible expenses’ means--
‘(A) any amount for which a deduction is allowed to the taxpayer under section 162, and
‘(B) permit and license fees, lease brokerage fees, equipment installation costs, and, to the extent provided by the Secretary, other similar expenses.
Such term does not include any compensation which is paid or incurred in connection with severance from employment and, to the extent provided by the Secretary, any similar amount.
‘(3) BUSINESS UNIT- The term ‘business unit’ means--
‘(A) any trade or business, and
‘(B) any line of business, or functional unit, which is part of any trade or business.
‘(4) EXPANDED AFFILIATED GROUP- The term ‘expanded affiliated group’ means an affiliated group as defined in section 1504(a), determined without regard to section 1504(b)(3) and by substituting ‘more than 50 percent’ for ‘at least 80 percent’ each place it appears in section 1504(a). A partnership or any other entity (other than a corporation) shall be treated as a member of an expanded affiliated group if such entity is controlled (within the meaning of section 954(d)(3)) by members of such group (including any entity treated as a member of such group by reason of this paragraph).
‘(5) OPERATING EXPENSES NOT TAKEN INTO ACCOUNT- Any amount paid or incurred in connection with the on-going operation of a business unit shall not be treated as an amount paid or incurred in connection with the establishment or elimination of such business unit.
‘(c) Special Rules-
‘(1) APPLICATION TO DEDUCTIONS FOR DEPRECIATION AND AMORTIZATION- In the case of any portion of a specified outsourcing expense which is not deductible in the taxable year in which paid or incurred, such portion shall neither be chargeable to capital account nor amortizable.
‘(2) POSSESSIONS TREATED AS PART OF THE UNITED STATES- For purposes of this section, the term ‘United States’ shall be treated as including each possession of the United States (including the Commonwealth of Puerto Rico and the Commonwealth of the Northern Mariana Islands).
‘(d) Regulations- The Secretary shall prescribe such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this section, including regulations which provide (or create a rebuttable presumption) that certain establishments of business units outside the United States will be treated as relocations (based on timing or such other factors as the Secretary may provide) of business units eliminated within the United States.’.
(b) Limitation on Subpart F Income of Controlled Foreign Corporations Determined Without Regard to Specified Outsourcing Expenses- Subsection (c) of section 952 is amended by adding at the end the following new paragraph:
‘(4) EARNINGS AND PROFITS DETERMINED WITHOUT REGARD TO SPECIFIED OUTSOURCING EXPENSES- For purposes of this subsection, earnings and profits of any controlled foreign corporation shall be determined without regard to any specified outsourcing expense (as defined in section 280I(b)).’.
(c) Clerical Amendment- The table of sections for part IX of subchapter B of chapter 1 is amended by adding at the end the following new item:
‘Sec. 280I. Outsourcing expenses.’.
(d) Effective Date- The amendments made by this section shall apply to amounts paid or incurred after the date of the enactment of this Act.
SEC. 4. MODIFICATIONS TO THE TAX ON PETROLEUM. (a) Definition of Crude Oil- Paragraph (1) of section 4612(a) is amended to read as follows:
‘(1) CRUDE OIL- The term ‘crude oil’ includes crude oil condensates, natural gasoline, any bitumen or bituminous mixture, and any oil derived from a bitumen or bituminous mixture.’.
(b) Removing Restrictions Relating to Oil Wells and Extraction Methods- Paragraph (2) of section 4612(a) is amended by striking ‘from a well located’.
(c) Clerical Amendment- Subclause (I) of section 4612(e)(2)(B)(ii) is amended by striking ‘tranferred’ and inserting ‘transferred’.
(d) Effective Date- The amendments made by subsections (a) and (b) shall apply to oil and petroleum products received or entered during calendar quarters beginning more than 60 days after the date of the enactment of this Act.
SEC. 2. TAX ON INDIVIDUALS
`(a) In General- There is hereby imposed on the taxable income of every individual equal to-- `(1) 17 percent of the taxable income of such individual `(b) Taxable Income- For purposes of this part, the term `taxable income' means the excess of-- `(1) the sum of-- `(A) wages (as defined in section 3121(a) without regard to paragraph (1) thereof) which are paid in cash and which are received during the taxable year for services performed in the United States, `(B) retirement distributions which are includible in gross income for such taxable year, plus `(C) amounts received under any law of the United States or of any State which is in the nature of unemployment compensation, over `(2) the standard deduction. `(c) Standard Deduction- For purposes of this part-- `(1) IN GENERAL- The term `standard deduction' means the sum of-- `(A) the basic standard deduction, plus `(B) the additional standard deduction. `(2) BASIC STANDARD DEDUCTION- For purposes of paragraph (1), the basic standard deduction is-- `(A) $32,496 in the case of-- `(i) a joint return, or `(ii) a surviving spouse (as defined in section 2(a)), `(B) $20,739 in the case of a head of household (as defined in section 2(b)), and `(C) $16,248 in the case of an individual-- `(i) who is not married and who is not a surviving spouse or head of household, or `(ii) who is a married individual filing a separate return. `(3) ADDITIONAL STANDARD DEDUCTION- For purposes of paragraph (1), the additional standard deduction is $6,998 for each dependent (as defined in section 152) who is a qualifying child (as defined in section 152(c)(1)) for the taxable year and who is not required to file a return for such taxable year. `(d) Retirement Distributions- For purposes of this section, the term `retirement distribution' means any distribution from-- `(1) a plan described in section 401(a) which includes a trust exempt from tax under section 501(a), `(2) an annuity plan described in section 403(a), `(3) an annuity contract described in section 403(b), `(4) an individual retirement account described in section 408(a), `(5) an individual retirement annuity described in section 408(b), `(6) an eligible deferred compensation plan (as defined in section 457), `(7) a governmental plan (as defined in section 414(d)), or `(8) a trust described in section 501(c)(18). Such term includes any plan, contract, account, annuity, or trust which, at any time, has been determined by the Secretary to be such a plan, contract, account, annuity, or trust. `(e) Income of Certain Children- For purposes of this part-- `(1) an individual's taxable income shall include the taxable income of each dependent child of such individual who has not attained age 14 as of the close of such taxable year, and `(2) such dependent child shall have no liability for tax imposed by this section with respect to such income and shall not be required to file a return for such taxable year. `(f) Inflation Adjustment- `(1) IN GENERAL- In the case of any taxable year beginning in a calendar year after 2014, each dollar amount contained in subsection (c) shall be increased by an amount determined by the Secretary to be equal to-- `(A) such dollar amount, multiplied by `(B) the cost-of-living adjustment for such calendar year. `(2) COST-OF-LIVING ADJUSTMENT- For purposes of paragraph (1), the cost-of-living adjustment for any calendar year is the percentage (if any) by which-- `(A) the CPI for the preceding calendar year, exceeds `(B) the CPI for the calendar year 2013. `(3) CPI FOR ANY CALENDAR YEAR- For purposes of paragraph (2), the CPI for any calendar year is the average of the Consumer Price Index as of the close of the 12-month period ending on August 31 of such calendar year. `(4) CONSUMER PRICE INDEX- For purposes of paragraph (3), the term `Consumer Price Index' means the last Consumer Price Index for all-urban consumers published by the Department of Labor. For purposes of the preceding sentence, the revision of the Consumer Price Index which is most consistent with the Consumer Price Index for calendar year 1986 shall be used. `(5) ROUNDING- If any increase determined under paragraph (1) is not a multiple of $10, such increase shall be rounded to the next highest multiple of $10. `(g) Marital Status- For purposes of this section, marital status shall be determined under section 7703.
SEC. 3. TAX ON BUSINESS ACTIVITIES. `(a) Tax Imposed- There is hereby imposed on every person engaged in a business activity a tax equal to-- `(1) 17 percent of the business taxable income of such person for such taxable year in the case of all taxable years subsequent to the taxable years described in paragraph (1). `(b) Liability for Tax- The tax imposed by this section shall be paid by the person engaged in the business activity, whether such person is an individual, partnership, corporation, or otherwise. `(c) Business Taxable Income- For purposes of this section-- `(1) IN GENERAL- The term `business taxable income' means gross active income reduced by the deductions specified in subsection (d). `(2) GROSS ACTIVE INCOME- `(A) IN GENERAL- For purposes of paragraph (1), the term `gross active income' means gross receipts from-- `(i) the sale or exchange of property or services in the United States by any person in connection with a business activity, and `(ii) the export of property or services from the United States in connection with a business activity. `(B) EXCHANGES- For purposes of this section, the amount treated as gross receipts from the exchange of property or services is the fair market value of the property or services received, plus any money received. `(C) COORDINATION WITH SPECIAL RULES FOR FINANCIAL SERVICES, ETC- Except as provided in subsection (e)-- `(i) the term `property' does not include money or any financial instrument, and `(ii) the term `services' does not include financial services. `(3) EXEMPTION FROM TAX FOR ACTIVITIES OF GOVERNMENTAL ENTITIES AND TAX-EXEMPT ORGANIZATIONS- For purposes of this section, the term `business activity' does not include any activity of a governmental entity or of any other organization which is exempt from tax under this chapter. `(d) Deductions- `(1) IN GENERAL- The deductions specified in this subsection are-- `(A) the cost of business inputs for the business activity, `(B) wages (as defined in section 3121(a) without regard to paragraph (1) thereof) which are paid in cash for services performed in the United States as an employee, and `(C) retirement contributions to or under any plan or arrangement which makes retirement distributions (as defined in section 60A(d)) for the benefit of such employees to the extent such contributions are allowed as a deduction under section 404. `(2) BUSINESS INPUTS- `(A) IN GENERAL- For purposes of paragraph (1), the term `cost of business inputs' means-- `(i) the amount paid for property sold or used in connection with a business activity, `(ii) the amount paid for services (other than for the services of employees, including fringe benefits paid by reason of such services) in connection with a business activity, and `(iii) any excise tax, sales tax, customs duty, or other separately stated levy imposed by a Federal, State, or local government on the purchase of property or services which are for use in connection with a business activity. Such term shall not include any tax imposed by chapter 2 or 21. `(B) EXCEPTIONS- Such term shall not include-- `(i) items described in subparagraphs (B) and (C) of paragraph (1), and `(ii) items for personal use not in connection with any business activity. `(C) EXCHANGES- For purposes of this section, the amount treated as paid in connection with the exchange of property or services is the fair market value of the property or services exchanged, plus any money paid. `(e) Special Rules for Financial Intermediation Service Activities- In the case of the business activity of providing financial intermediation services, the taxable income from such activity shall be equal to the value of the intermediation services provided in such activity. `(f) Exception for Services Performed as Employee- For purposes of this section, the term `business activity' does not include the performance of services by an employee for the employee's employer. `(g) Carryover of Credit-Equivalent of Excess Deductions- `(1) IN GENERAL- If the aggregate deductions for any taxable year exceed the gross active income for such taxable year, the credit-equivalent of such excess shall be allowed as a credit against the tax imposed by this section for the following taxable year. `(2) CREDIT-EQUIVALENT OF EXCESS DEDUCTIONS- For purposes of paragraph (1), the credit-equivalent of the excess described in paragraph (1) for any taxable year is an amount equal to-- `(A) the sum of-- `(i) such excess, plus `(ii) the product of such excess and the 3-month Treasury rate for the last month of such taxable year, multiplied by `(B) the rate of the tax imposed by subsection (a) for such taxable year. `(3) CARRYOVER OF UNUSED CREDIT- If the credit allowable for any taxable year by reason of this subsection exceeds the tax imposed by this section for such year, then (in lieu of treating such excess as an overpayment) the sum of-- `(A) such excess, plus `(B) the product of such excess and the 3-month Treasury rate for the last month of such taxable year, shall be allowed as a credit against the tax imposed by this section for the following taxable year. `(4) 3-month TREASURY RATE- For purposes of this subsection, the 3-month Treasury rate is the rate determined by the Secretary based on the average market yield (during any 1-month period selected by the Secretary and ending in the calendar month in which the determination is made) on outstanding marketable obligations of the United States with remaining periods to maturity of 3 months or less.
SEC. 4. REPEAL OF ESTATE AND GIFT TAXES. (a) In General- Subtitle B of the Internal Revenue Code of 1986 is hereby repealed. (b) Effective Date- The repeal made by subsection (a) shall apply to the estates of decedents dying, and gifts and generation-skipping transfers made, after December 31, 2013. (c) Cross Reference- See section 102 of the Internal Revenue Code of 1986 for exclusion of gifts and inheritances from gross income.
SEC. 5. PLAIN ENGLISH SUMMARY.
Amends the Internal Revenue Code to require an individual taxpayer whose adjusted gross income exceeds $1 million to pay a minimum income tax rate of 30% of the excess of the taxpayer's adjusted gross income over the taxpayer's modified charitable contribution deduction for the taxable year (tentative fair share tax).
Establishes the amount of such tax as the excess (if any) of the tentative fair share tax over the excess of: (1) the sum of the taxpayer's regular tax liability, the alternative minimum tax (AMT) amount, and the payroll tax for the taxable year; over (2) certain tax credits.
Requires an inflation adjustment to the $1 million income threshold for taxable years beginning after 2013.
Denies a tax deduction for specified outsourcing expenses.
Defines "specified outsourcing expense" to mean business-related expenses and fees incurred in connection with the elimination of any business unit of the taxpayer located within the United States and the establishment of such business unit outside the United States.
Expands the definition of "crude oil" for purposes of the excise tax on crude oil and petroleum products to include crude oil condensates, natural gasoline, any bitumen or bituminous mixture, and any oil derived from a bitumen or bituminous mixture.
Modifies the definition of "domestic crude oil" to mean any crude oil produced in the United States (currently, any crude oil produced from a well located in the United States).
Imposes a flat tax of 17% on all individual and business income, and repeals the estate and gift taxes.
SEC. 6. ENACTMENT. This bill shall come into enactment at the beginning of the taxable year following its passage into law.
Citation: H.R. 1040 - Flat Tax Act (Mr. BURGESS)
I yield, in hopes that my amendment to truly create a fair tax code will be accepted by this body.
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Melissa Sanchez
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12 Jun 2013, 11:16 AM
Post #14
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Madam Speaker,
I request permission to revise and extend my remarks.
I am APPALLED that the Gentleman from Ohio would offer such an amendment.
While we should always look at the Tax Code for methods of improvement, it appears obvious that the proposed amendment would put us further in the debt hole.
I am not adverse to modifying the Tax Code, nor even proposals such as the Fair Tax to replace it. I do expect that such proposals will not dig us deeper into "borrow and spend".
If you intend to take a chain saw to government revenue, sir, expenditure cuts must come first.
I yield the floor, but reserve the balance of my time.
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Heather Holson
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12 Jun 2013, 12:40 PM
Post #15
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Motion to amend is recognized and properly seconded. 24 hours to vote on the Sanchez Amendment.
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peter
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12 Jun 2013, 12:53 PM
Post #16
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Lucas for President: Take Back America!
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Aye on Sanchez
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Terrus
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12 Jun 2013, 12:59 PM
Post #17
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Nay on Sanchez.
Madame Speaker,
The Republican Party returns to the same old, tired arguments to oppose this legislation. They call those that favor higher taxes socialists -- displaying an absolute ignorance to the meaning of the term "socialist." They say that the wealthy are job creators, attempting to re-establish the "trickle down," economic policies that failed so miserably under Reagan. And they say that we should establish a flat tax, a nice term for what amounts to a massive tax hike for the middle-class, and a massive tax cut for the rich.
I'm happy to engage in a debate regarding this issue -- but only if it's going to actually be a debate, not just a session of name-calling.
I yield.
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Matt Urbana
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12 Jun 2013, 01:08 PM
Post #18
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Aye on Sanchez
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JMJ
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12 Jun 2013, 01:17 PM
Post #19
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Aye on Sanchez
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Patrick Callaghan
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12 Jun 2013, 01:19 PM
Post #20
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New England Republican >:D
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Aye on Sanchez
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