S.Amdt. 2921

SA 2921. Ms. STABENOW (for herself and Mrs. McCaskill) submitted an
amendment intended to be proposed to amendment SA 2786 proposed by Mr.

[[Page S12432]]

Reid (for himself, Mr. Baucus, Mr. Dodd, and Mr. Harkin) to the bill
H.R. 3590, to amend the Internal Revenue Code of 1986 to modify the
first-time homebuyers credit in the case of members of the Armed Forces
and certain other Federal employees, and for other purposes; which was
ordered to lie on the table; as follows:

On page 2074, after line 25, insert the following:

Subtitle C--Provisions Related to Improving Tax Incentives for
Individuals and Employers Under Title I

PART I--GENERAL PROVISIONS

SEC. 9031. PREMIUM ASSISTANCE CREDIT.

(a) In General.--Section 36B(b)(3)(A)(i) of the Internal
Revenue Code of 1986, as added by section 1401, is amended by
striking ``7'' each place it appears and inserting ``6''.
(b) Effective Date.--The amendment made by this section
shall take effect as if included in section 1401.

SEC. 9032. SMALL EMPLOYER HEALTH INSURANCE CREDIT.

(a) In General.--Notwithstanding section 1421(f) of this
Act--
(1) the amendments made by subsections (a), (b), (d), and
(e) of section 1421 shall apply to taxable years beginning
after December 31, 2009, and
(2) the amendments made by subsection (c) of section 1421
shall apply to credits determined under section 45R of the
Internal Revenue Code of 1986 in taxable years beginning
after December 31, 2009.
(b) Conforming Amendments.--
(1) Clause (i) of section 45R(d)(3)(B) of the Internal
Revenue Code of 1986, as added by section 1421, is amended by
inserting ``2010,'' before ``2011'' each place it appears in
the text and in the heading.
(2) Subsection (g) of section 45R of such Code, as added by
section 1421, is amended by inserting ``2010,'' before
``2011'' each place it appears in the text and in the
heading.
(3) Section 280C(h) of such Code, as added by section 1421,
is amended by inserting ``2010,'' before ``2011''.
(c) Effective Date.--The amendments made by subsection (b)
shall apply to taxable years beginning after December 31,
2009.

PART II--REVENUE PROVISIONS

SEC. 9035. SURTAX ON INVESTMENT INCOME.

(a) In General.--
(1) Surtax.--
(A) Imposition of tax.--Subtitle A of the Internal Revenue
Code of 1986 is amended by redesignating chapter 3 as chapter
4 and by inserting after chapter 2 the following new chapter:

``CHAPTER 3--TAX ON INVESTMENT INCOME

``Sec. 1411. Rate of tax.
``Sec. 1412. Investment income.

``SEC. 1411. RATE OF TAX.

``(a) In General.--In addition to other taxes, there shall
be imposed for each taxable year on the investment income of
every taxpayer (other than a corporation, estate, or trust) a
tax equal to 1.45 percent of such investment income for such
taxable year.
``(b) Phase-in of Rate.--The rate under subsection (a)
(determined without regard to this subsection) shall be
reduced (but not below zero) by the amount which bears the
same ratio to such rate as--
``(1) the excess of--
``(A) $240,000 ($290,000 in the case of a joint return),
over
``(B) the taxpayer's adjusted gross income for the taxable
year, bears to
``(2) $40,000.

``SEC. 1412. INVESTMENT INCOME.

``(a) In General.--For purposes of this chapter, the term
`investment income' means the sum of--
``(1) capital gain net income, and
``(2) net investment income.
``(b) Net Investment Income.--For purposes of this chapter,
the term `net investment income' means the net income (other
than income which is included in self-employment income for
purposes of chapter 2) from--
``(1) dividends,
``(2) interest (other than interest which is excludable
from income under chapter 1), and
``(3) investment property income.
``(c) Investment Property.--For purposes of this chapter,
the term `investment property income' means income
(determined after taking into account any deduction allowed
under chapter 1 with respect to such income) derived from--
``(1) any property held for the production of rents or
royalties,
``(2) any partnership or S corporation,
``(3) any estate or trust in which the taxpayer is a
beneficiary, and
``(4) any real estate mortgage investment conduit in which
the taxpayer is a residual holder.
``(d) Taxable Years Ending as the Result of a Death.--Rules
similar to the rules of section 1402(f) shall apply with
respect to investment income in a taxable year which ends as
a result of the death of the taxpayer.''.
(2) Estimated taxes.--Section 6654 of the Internal Revenue
Code of 1986 is amended --
(A) in subsection (a), by striking ``and the tax under
chapter 2'' and inserting ``the tax under chapter 2, and the
tax under chapter 3'', and
(B) in subsection (f)--
(i) by striking ``minus'' at the end of paragraph (2) and
inserting ``plus'', and
(ii) by redesignating paragraph (3) as paragraph (4) and by
inserting after paragraph (2) the following new paragraph:
``(3) the taxed imposed by chapter 3, minus''.
(3) Returns.--
(A) In general.--Subpart B of part II of subchapter A of
chapter 61 of the Internal Revenue Code of 1986 is amended by
adding at the end the following new section:

``SEC. 6017A. INVESTMENT INCOME TAX RETURNS.

``Every taxpayer (other than a corporation, estate, or
trust) having investment income for the taxable year shall
make a return with respect to the investment income tax
imposed by chapter 3.''.
(B) Conforming amendment.--The table of sections for
subpart B of part II of subchapter A of chapter 61 of such
Code is amended by adding at the end the following new item:

``Sec. 6017A. Investment income tax returns.''.

(4) Conforming amendments.--
(A) The following sections of the Internal Revenue Code of
1986 are amended by striking ``chapter 3'' and inserting
``chapter 4'' each place it appears:
(i) Section 33.
(ii) Section 864(b).
(iii) Section 871(k)(1)(B)(ii).
(iv) Section 877A(d)(5).
(v) Section 896(a).
(vi) Section 3402(t)(2)(A).
(vii) Section 3405(e)(1)(B)(iii).
(viii) Paragraphs (2)(C)(iv), (5)(A), and (5)(B) of section
6049(b).
(ix) Section 6414.
(x) Paragraphs (1) and (2) of section 6501(b).
(xi) Subsections (b)(3) and (c) of section 6513.
(xii) Paragraphs (1) and (2) of section 6724(d).
(B) Clerical amendment.--The table of chapters for subtitle
A of chapter 1 of the Internal Revenue Code of 1986 is
amended by redesignating the item relating to chapter 3 as
relating to chapter 4 and by inserting after the item
relating to chapter 2 the following new item:

``Chapter 3--Tax on Investment Income''.

(5) Effective date.--The amendments made by this subsection
shall apply to taxable years beginning after December 31,
2012.
(b) Transfer of Amounts to Federal Hospital Insurance Trust
Fund.--Section 1817(a) of the Social Security Act (42 U.S.C.
1395i(a)) is amended by striking ``and'' at the end of
paragraph (1), by striking the period at the end of paragraph
(2) and inserting ``; and'', and by inserting after paragraph
(2) the following new paragraph:
``(3) the taxes imposed by section 1411 of the Internal
Revenue Code of 1986 with respect to investment income
reported to the Secretary of the Treasury or his delegate on
tax returns under subtitle F of such Code, as determined by
the Secretary of the Treasury by applying the applicable rate
of tax under such section to such investment income, which
investment income shall be certified by the Commissioner of
Social Security on the basis of records of investment income
established and maintained by the Commissioner of Social
Security.''.
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