No official summary available for this bill.
[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4119 Introduced in House (IH)]
<DOC>
118th CONGRESS
1st Session
H. R. 4119
To impose a tax on certain trading transactions to invest in our
families and communities, improve our infrastructure and our
environment, strengthen our financial security, expand opportunity and
reduce market volatility.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 14, 2023
Ms. Lee of California (for herself, Ms. Ocasio-Cortez, Mrs. Watson
Coleman, Ms. Norton, Mr. Pocan, Ms. Omar, Ms. Lee of Pennsylvania, Mr.
McGovern, Ms. Chu, Mr. Takano, Ms. Schakowsky, Mr. Huffman, Ms.
Jayapal, and Ms. Pingree) introduced the following bill; which was
referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To impose a tax on certain trading transactions to invest in our
families and communities, improve our infrastructure and our
environment, strengthen our financial security, expand opportunity and
reduce market volatility.
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 ``Tax on Wall Street Speculation
Act''.
SEC. 2. TRANSACTION TAX.
(a) In General.--Chapter 36 of the Internal Revenue Code of 1986 is
amended by inserting after subchapter B the following new subchapter:
``Subchapter C--Tax on Trading Transactions
``Sec. 4475. Tax on trading transactions.
``SEC. 4475. TAX ON TRADING TRANSACTIONS.
``(a) Imposition of Tax.--There is hereby imposed a tax on the
transfer of ownership in each covered transaction with respect to any
security.
``(b) Rate of Tax.--The tax imposed under subsection (a) with
respect to any covered transaction shall be the applicable percentage
of the specified base amount with respect to such covered transaction.
The applicable percentage shall be--
``(1) 0.5 percent in the case of a security described in
subparagraph (A), (B), or (E) of subsection (e)(1),
``(2) 0.10 percent in the case of a security described in
subparagraph (C) of such subsection, and
``(3) 0.005 percent in the case of a security described in
subparagraph (D) of such subsection.
``(c) Specified Base Amount.--For purposes of this section, the
term `specified base amount' means--
``(1) except as provided in paragraph (2)--
``(A) in the case of any security described in
subparagraph (A), (B), (C), or (E) of subsection
(e)(1), the fair market value of the security
(determined as of the time of the covered transaction),
and
``(B) in the case of any security described in
subparagraph (D) of such subsection, the fair market
value of the underlying investment with respect to such
security (determined as of the time of the covered
transaction), and
``(2) in the case of any payment described in subsection
(h), the amount of such payment.
``(d) Covered Transaction.--For purposes of this section, the term
`covered transaction' means--
``(1) except as provided in paragraph (2), any purchase
if--
``(A) such purchase occurs or is cleared on a
facility located in the United States, or
``(B) the purchaser or seller is a United States
person, and
``(2) any transaction with respect to a security described
in subparagraph (D) of subsection (e)(1), if--
``(A) such security is traded or cleared on a
facility located in the United States, or
``(B) any party with rights under such security is
a United States person.
``(e) Security and Other Definitions.--For purposes of this
section--
``(1) Security.--The term `security' means--
``(A) any share of stock in a corporation,
``(B) any partnership or beneficial ownership
interest in a partnership or trust,
``(C) any note, bond, debenture, or other evidence
of indebtedness, other than a State or local bond the
interest of which is excluded from gross income under
section 103(a),
``(D) any derivative, or
``(E) any digital asset (as defined in section
6045(g)(3)(D)).
``(2) Derivative.--The term `derivative' means any contract
(including any option, forward contract, futures contract,
short position, swap, or similar contract) the value of which,
or any payment or other transfer with respect to which, is
(directly or indirectly) determined by reference to one or more
of the following:
``(A) Any share of stock in a corporation.
``(B) Any partnership or beneficial ownership
interest in a partnership or trust.
``(C) Any evidence of indebtedness.
``(D) Any real property.
``(E) Any commodity which is actively traded
(within the meaning of section 1092(c)(4)).
``(F) Any currency.
``(G) Any rate, price, amount, index, formula, or
algorithm.
``(H) Any other item as the Secretary may
prescribe.
Except as provided in regulations prescribed by the Secretary
to prevent the avoidance of the purposes of this section, such
term shall not include any item described in subparagraphs (A)
through (H).
``(3) Underlying investment.--The term `underlying
investment' means, with respect to any derivative, any item--
``(A) which is described in any of the
subparagraphs (A) through (H) of paragraph (2) (or any
item substantially the same as any such item), and
``(B) by reference to which the value of the
derivative, or any payment or other transfer with
respect to the derivative, is determined either
directly or indirectly.
``(4) Treatment of exchanges.--
``(A) In general.--An exchange shall be treated as
the sale of the property transferred and a purchase of
the property received by each party to the exchange.
``(B) Certain deemed exchanges.--In the case of a
distribution treated as an exchange for stock under
section 302 or 331, the corporation making such
distribution shall be treated as having purchased such
stock for purposes of this section.
``(f) Exceptions.--
``(1) Exception for initial issues.--No tax shall be
imposed under subsection (a) on any covered transaction with
respect to the initial issuance of any security described in
subparagraph (A), (B), (C), or (E) of subsection (e)(1).
``(2) Exception for certain traded short-term
indebtedness.--A note, bond, debenture, or other evidence of
indebtedness which--
``(A) is traded on a trading facility located in
the United States, and
``(B) has a fixed maturity of not more than 60
days,
shall not be treated as described in subsection (e)(1)(C).
``(3) Exception for securities lending arrangements.--No
tax shall be imposed under subsection (a) on any covered
transaction with respect to which gain or loss is not
recognized by reason of section 1058.
``(g) By Whom Paid.--
``(1) In general.--The tax imposed by this section shall be
paid by--
``(A) in the case of a transaction which occurs or
is cleared on a facility located in the United States,
such facility, and
``(B) in the case of a purchase not described in
subparagraph (A) which is executed by a broker (as
defined in section 6045(c)(1)), the broker.
``(2) Special rules for direct, etc., transactions.--In the
case of any transaction to which paragraph (1) does not apply,
the tax imposed by this section shall be paid by--
``(A) in the case of a transaction described in
subsection (d)(1)--
``(i) the purchaser if the purchaser is a
United States person, and
``(ii) the seller if the purchaser is not a
United States person, and
``(B) in the case of a transaction described in
subsection (d)(2)--
``(i) the payor if the payor is a United
States person, and
``(ii) the payee if the payor is not a
United States person.
``(h) Certain Payments Treated as Separate Transactions.--Except as
otherwise provided by the Secretary, any payment with respect to a
security described in subparagraph (D) of subsection (e)(1) shall be
treated as a separate transaction for purposes of this section,
including--
``(1) any net initial payment, net final or terminating
payment, or net periodical payment with respect to a notional
principal contract (or similar financial instrument),
``(2) any payment with respect to any forward contract (or
similar financial instrument), and
``(3) any premium paid with respect to any option (or
similar financial instrument).
``(i) Administration.--The Secretary shall carry out this section
in consultation with the Securities and Exchange Commission and the
Commodity Futures Trading Commission.
``(j) Guidance; Regulations.--The Secretary shall--
``(1) provide guidance regarding such information reporting
concerning covered transactions as the Secretary deems
appropriate, including reporting by the payor of the tax in
cases where the payor is not the purchaser, and
``(2) prescribe such regulations as are necessary or
appropriate to prevent avoidance of the purposes of this
section, including the use of non-United States persons in such
transactions.
``(k) Whistleblowers.--See section 7623 for provisions relating to
whistleblowers.''.
(b) Penalty for Failure To Include Covered Transaction Information
With Return.--Part I of subchapter B of chapter 68 of the Internal
Revenue Code of 1986 is amended by inserting after section 6707A the
following new section:
``SEC. 6707B. PENALTY FOR FAILURE TO INCLUDE COVERED TRANSACTION
INFORMATION WITH RETURN.
``(a) Imposition of Penalty.--Any person who fails to include on
any return or statement any information with respect to a covered
transaction which is required pursuant to section 4475(j)(1) to be
included with such return or statement shall pay a penalty in the
amount determined under subsection (b).
``(b) Amount of Penalty.--Except as otherwise provided in this
subsection, the amount of the penalty under subsection (a) with respect
to any covered transaction shall be determined by the Secretary.
``(c) Covered Transaction.--For purposes of this section, the term
`covered transaction' has the meaning given such term by section
4475(d).
``(d) Authority To Rescind Penalty.--
``(1) In general.--The Commissioner of Internal Revenue may
rescind all or any portion of any penalty imposed by this
section with respect to any violation if rescinding the penalty
would promote compliance with the requirements of this title
and effective tax administration.
``(2) No judicial appeal.--Notwithstanding any other
provision of law, any determination under this subsection may
not be reviewed in any judicial proceeding.
``(3) Records.--If a penalty is rescinded under paragraph
(1), the Commissioner shall place in the file in the Office of
the Commissioner the opinion of the Commissioner with respect
to the determination, including--
``(A) a statement of the facts and circumstances
relating to the violation,
``(B) the reasons for the rescission, and
``(C) the amount of the penalty rescinded.
``(e) Coordination With Other Penalties.--The penalty imposed by
this section shall be in addition to any other penalty imposed by this
title.''.
(c) Clerical Amendments.--
(1) The table of sections for part I of subchapter B of
chapter 68 of such Code is amended by inserting after item
relating to section 6707A the following new item:
``Sec. 6707B. Penalty for failure to include covered transaction
information with return.''.
(2) The table of subchapters for chapter 36 of the Internal
Revenue Code of 1986 is amended by inserting after the item
relating to subchapter B the following new item:
``subchapter c. tax on trading transactions''.
(d) Effective Date.--The amendments made by this section shall
apply to transactions after December 31, 2023.
SEC. 3. OFFSETTING CREDIT FOR FINANCIAL TRANSACTION TAX.
(a) In General.--Subpart A of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 is amended by inserting after
section 25E the following new section:
``SEC. 25F. FINANCIAL TRANSACTION TAX PAYMENTS.
``(a) Allowance of Credit.--In the case of an eligible individual,
there shall be allowed as a credit against the tax imposed by this
chapter for the taxable year an amount equal to the tax paid during the
taxable year under section 4475 with respect to any covered transaction
in which the taxpayer is a beneficial owner of the security transferred
in such covered transaction.
``(b) Special Rule.--If the tax imposed under section 4475(a) with
respect to any covered transaction is paid by any person other than 1
or more beneficial owners of the security transferred in such covered
transaction, the determination for how such tax is allocated to such
beneficial owners shall be made in a reasonable manner not inconsistent
with regulations or other guidance prescribed by the Secretary.
``(c) Limitation Based on Modified Adjusted Gross Income.--
``(1) In general.--Subsection (a) shall not apply to a
taxpayer for the taxable year if the modified adjusted gross
income of the taxpayer for the taxable year exceeds $50,000
($75,000 in the case of a joint return and one-half of such
amount in the case of a married individual filing a separate
return).
``(2) Modified adjusted gross income.--For purposes of
paragraph (1), the term `modified adjusted gross income' means
adjusted gross income--
``(A) determined without regard to sections 86,
893, 911, 931, and 933, and
``(B) increased by the amount of interest received
or accrued by the taxpayer during the taxable year
which is exempt from tax.
``(3) Inflation adjustment.--
``(A) In general.--In the case of any taxable year
beginning after 2024, each dollar amount referred to in
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) of the
Internal Revenue Code of 1986 for the calendar
year in which the taxable year begins, by
substituting `2023' for `2016' in subparagraph
(A)(ii) thereof.
``(B) Rounding.--If any amount as adjusted under
subparagraph (A) is not a multiple of $50, such amount
shall be rounded to the nearest multiple of $50.
``(d) Eligible Individual.--
``(1) In general.--The term `eligible individual' means,
with respect to any taxable year, an individual who--
``(A) has attained the age of 18 as of the last day
of such taxable year, and
``(B) is a citizen or lawful permanent resident
(within the meaning of section 7701(b)(6)) as of the
last day of such taxable year.
``(2) Certain individuals not eligible.--For purposes of
paragraph (1), an individual described in any of the following
provisions of this title for the preceding taxable year shall
not be treated as an eligible individual for the taxable year:
``(A) An individual who is a student (as defined in
section 152(f)(2)) for the taxable year or the
immediately preceding taxable year.
``(B) An individual who is a taxpayer described in
subsection (c), (d), or (e) of section 6402 for the
immediately preceding taxable year.''.
(b) Clerical Amendment.--The table of sections for subpart A of
part IV of subchapter A of chapter 1 of such Code is amended by
inserting after the item relating to section 25E the following new
item:
``Sec. 25F. Financial transaction tax payments.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2023.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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