H.R. 3018

Corporate Assets Should be used to Hire Act

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I

112th CONGRESS

1st Session

H. R. 3018

IN THE HOUSE OF REPRESENTATIVES

September 22, 2011

Mr. Capuano introduced the following bill; which was referred to the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to provide a temporary surtax on increases in retained earnings of domestic corporations.

1.

Short title

This Act may be cited as the Corporate Assets Should be used to Hire Act.

2.

Temporary surtax on increases in retained earnings of domestic corporations

(a)

In general

Part II of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by redesignating section 12 as section 13 and by inserting after section 11 the following new section:

12.

Temporary surtax on increases in retained earnings of domestic corporations

(a)

In general

In the case of a domestic corporation for any taxable year beginning during 2011 or 2012, there is hereby imposed (in addition to any other tax imposed by this part) a tax equal to 40 percent of the excess (if any) of—

(1)

the retained earnings of such corporation for such taxable year, over

(2)

the average retained earnings of such corporation for the 3 taxable years immediately preceding such taxable year.

(b)

Exceptions

(1)

Retained earnings required by law

Subsection (a) shall not apply to so much of the excess described in such subsection as is attributable to any increase in retained earnings which is required by Federal law or regulation.

(2)

Small business exception

Subsection (a) shall not apply to any corporation for any taxable year with respect to which the retained earnings of such corporation for such taxable year is less than $5,000,000. For purposes of this paragraph, all persons treated as a single employer under subsection (a) or (b) of section 52, or subsection (m) or (o) of section 414, shall be treated as one person.

(3)

Corporations not in existence for entire base period

Subsection (a) shall not apply to any corporation if such corporation was not in existence for the entire 3 taxable year period referred to in subsection (a)(2).

(c)

Retained earnings

For purposes of this section, the term retained earnings means, with respect to any taxable year, the excess (if any) of—

(1)

the retained earnings of such corporation as of the end of such taxable year, over

(2)

the retained earnings of such corporation as of the beginning of such taxable year.

Appropriated and unappropriated retained earnings shall be taken into account under paragraphs (1) and (2).
(d)

Treatment of predecessors

Any reference in this section to a corporation shall include a reference to any predecessor of such corporation.

.

(b)

Clerical amendment

The table of sections for part II of subchapter A of chapter 1 of such Code is amended by redesignating the item relating to section 12 as an item relating to section 13 and by inserting after the item relating to section 11 the following new item:

Sec. 12. Temporary surtax on increases in retained earnings of domestic corporations.

.

(c)

Deficit reduction

The increase in Federal revenue resulting from the amendments made by this section shall be deposited in the Treasury and used for Federal budget deficit reduction or, if there is no Federal budget deficit, for reducing the Federal debt in such manner as the Secretary of the Treasury considers appropriate.

(d)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2010.