Paying a Fair Share Act of 2012 - Amends the Internal Revenue Code to require an individual taxpayer whose adjusted gross income exceeds $1 million to pay a minimum 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. Provides for a phase-in of such tax. Requires an inflation adjustment to the $1 million income threshold for taxable years beginning after 2013.
Expresses the sense of the House of Representatives that Congress should enact tax reform that repeals unfair and unnecessary tax loopholes and expenditures, simplifies the tax system, and makes sure that the wealthiest taxpayers pay a fair share of taxes.
[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3903 Introduced in House (IH)]
112th CONGRESS
2d Session
H. R. 3903
To reduce the deficit by imposing a minimum effective tax rate for
high-income taxpayers.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 6, 2012
Ms. Baldwin introduced the following bill; which was referred to the
Committee on Ways and Means
_______________________________________________________________________
A BILL
To reduce the deficit by imposing a minimum effective tax rate for
high-income taxpayers.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Paying a Fair Share Act of 2012''.
SEC. 2. FAIR SHARE TAX ON HIGH-INCOME TAXPAYERS.
(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:
``PART VII--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 the
dollar amount in effect under subsection
(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 in section 26(b)) for the
taxable year,
``(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 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
``(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) Conforming Amendment.--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:
``(C) section 59B (relating to fair share tax),''.
(c) 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 VII--Fair Share Tax on High-Income Taxpayers''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2012.
SEC. 3. SENSE OF THE HOUSE OF REPRESENTATIVES REGARDING TAX REFORM.
It is the sense of the House of Representatives that--
(1) Congress should enact tax reform that repeals unfair
and unnecessary tax loopholes and expenditures, simplifies the
system for millions of taxpayers and businesses (including by
eliminating the alternative minimum tax for middle-class
Americans), 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.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
Sponsor introductory remarks on measure. (CR H522)
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