II
Calendar No. 251
112th CONGRESS
1st Session
S. 1944
IN THE SENATE OF THE UNITED STATES
December 5, 2011
Mr. Casey (for himself, Mr. Reid, Mr. Schumer, and Mr. Durbin) introduced the following bill; which was read the first time
December 6, 2011
Read the second time and placed on the calendar
A BILL
To create jobs by providing payroll tax relief for middle class families and businesses, and for other purposes.
Short title
This Act may be cited as
the Middle Class Tax Cut Act of
2011
.
Temporary extension and expansion of employee payroll tax relief
Extension
Section 601(c) of the Tax Relief,
Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (26 U.S.C.
1401 note) is amended by striking year 2011
and inserting
years 2011 and 2012
.
Increased relief
In general
Subsection (a) of section 601 of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (26 U.S.C. 1401 note) is amended—
by inserting
(9.3 percent for calendar year 2012)
after 10.40
percent
in paragraph (1), and
in paragraph (2)—
by
striking (including
and inserting (3.1 percent in the
case of calendar year 2012), including
after 4.2
percent
, and
by
striking Code)
and inserting Code
.
Coordination with individual deduction for employment taxes
Subparagraph (A)
of section 601(b)(2) of such Act is amended by inserting (66.67 percent
for taxable years which begin in 2012)
after 59.6
percent
.
Technical amendments
Paragraph (2) of section 601(b) of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (26 U.S.C. 1401 note) is amended—
by inserting
of such Code
after 164(f)
,
by inserting
of such Code
after 1401(a)
in subparagraph (A),
and
by inserting
of such Code
after 1401(b)
in subparagraph
(B).
Surtax on millionaires
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:
Surtax on millionaires
Sec. 59B. Surtax on millionaires.
Surtax on millionaires
General rule
In the case of a taxpayer other than a corporation for any taxable year beginning after 2012 and before 2022, there is hereby imposed (in addition to any other tax imposed by this subtitle) a tax equal to 1.9 percent of so much of the modified adjusted gross income of the taxpayer for such taxable year as exceeds the threshold amount.
Threshold amount
For purposes of this section—
In general
The threshold amount is $1,000,000.
Inflation adjustment
In general
In the case of any taxable year beginning after 2013, the $1,000,000 amount under paragraph (1) shall be increased by an amount equal to—
such dollar amount, multiplied by
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 2011
for calendar year 1992
in
subparagraph (B) thereof.
Rounding
If any amount as adjusted under paragraph (1) is not a multiple of $10,000, such amount shall be rounded to the next highest multiple of $10,000.
Married filing separately
In the case of a married individual filing separately for any taxable year, the threshold amount shall be one-half of the amount otherwise in effect under this subsection for the taxable year.
Modified adjusted gross income
For purposes of this section, the term modified adjusted gross income means adjusted gross income reduced by any deduction (not taken into account in determining adjusted gross income) allowed for investment interest (as defined in section 163(d)). In the case of an estate or trust, adjusted gross income shall be determined as provided in section 67(e).
Special rules
Nonresident alien
In the case of a nonresident alien individual, only amounts taken into account in connection with the tax imposed under section 871(b) shall be taken into account under this section.
Citizens and residents living abroad
The dollar amount in effect under subsection (a) shall be decreased by the excess of—
the amounts excluded from the taxpayer’s gross income under section 911, over
the amounts of any deductions or exclusions disallowed under section 911(d)(6) with respect to the amounts described in subparagraph (A).
Charitable trusts
Subsection (a) shall not apply to a trust all the unexpired interests in which are devoted to one or more of the purposes described in section 170(c)(2)(B).
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 or for purposes of section 55.
.
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 VIII. Surtax on millionaires.
.
Section 15 not to apply
The amendment made by subsection (a) shall not be treated as a change in a rate of tax for purposes of section 15 of the Internal Revenue Code of 1986.
Effective date
The amendments made by this section shall apply to taxable years beginning after December 31, 2012.
Unwarranted unemployment compensation
In general
Subtitle E of the Internal Revenue Code of 1986 is amended by adding at the end the following new chapter:
Unwarranted unemployment compensation
Sec. 5895. Unwarranted unemployment compensation.
Unwarranted unemployment compensation
Imposition of tax
There is hereby imposed on any taxpayer with adjusted gross income (as defined in section 62) for any taxable year of at least $1,000,000 ($500,000, in the case of a married individual filing a separate return), a tax equal to 50 percent (55 percent in the case of a taxable year beginning in 2011 or 2012) of any unemployment compensation (as defined in section 85(b)) received by such taxpayer in such taxable year.
Administrative provisions
For purposes of the deficiency procedures of subtitle F, any tax imposed by this section shall be treated as a tax imposed by subtitle A.
.
Clerical amendment
The table of chapters for subtitle E of the Internal Revenue Code of 1986 is amended by adding at the end the following new item:
.
Tax not deductible
Section 275(a) of the Internal Revenue Code of 1986 is amended by inserting after paragraph (6) the following new paragraph:
Tax imposed by section 5895.
.
Effective date
The amendments made by this section shall apply to taxable years beginning after December 31, 2010.
Ending supplemental nutrition assistance program benefits for millionaires
In general
Section 6 of the Food and Nutrition Act of 2008 (7 U.S.C. 2015) is amended by adding at the end the following:
Disqualification for receipt of assets of at least $1,000,000
Any household in which a member receives income or assets with a fair market value of at least $1,000,000 shall, immediately on the receipt of the assets, become ineligible for further participation in the program until the date on which the household meets the income eligibility and allowable financial resources standards under section 5.
.
Conforming amendments
Section 5(a) of the Food and Nutrition Act of 2008 (7
U.S.C. 2014(a)) is amended in the second sentence by striking sections
6(b), 6(d)(2), and 6(g)
and inserting subsections (b), (d)(2),
(g), and (r) of section 6
.
Guarantee Fees
Subpart A of part 2 of subtitle A of title XIII of the Housing and Community Development Act of 1992 is amended by adding after section 1326 (12 U.S.C. 4546) the following new section:
Enterprise guarantee fees
Definitions
For purposes of this section, the following definitions shall apply:
Guarantee fee
The term guarantee fee—
means a fee described in subsection (b); and
includes—
the guaranty fee charged by the Federal National Mortgage Association with respect to mortgage-backed securities; and
the management and guarantee fee charged by the Federal Home Loan Mortgage Corporation with respect to participation certificates.
Average fees
The term average fees means the average contractual fee rate of single-family guaranty arrangements by an enterprise entered into during 2011, plus the recognition of any up-front cash payments over an estimated average life, expressed in terms of basis points. Such definition shall be interpreted in a manner consistent with the annual report on guarantee fees by the Federal Housing Finance Agency.
Increase
In general
Phased increase required
Subject to subsection (c), the Director shall require each enterprise to charge a guarantee fee in connection with any guarantee of the timely payment of principal and interest on securities, notes, and other obligations based on or backed by mortgages on residential real properties designed principally for occupancy of from 1 to 4 families, consummated after the date of enactment of this section.
Amount
The amount of the increase required under this section shall be determined by the Director to appropriately reflect the risk of loss, as well the cost of capital allocated to similar assets held by other fully private regulated financial institutions, but such amount shall be not less than an average increase of 12.5 basis points for each origination year or book year above the average fees imposed in 2011 for such guarantees. The Director shall prohibit an enterprise from offsetting the cost of the fee to mortgage originators, borrowers, and investors by decreasing other charges, fees, or premiums, or in any other manner.
Authority to limit offer of guarantee
The Director shall prohibit an enterprise from consummating any offer for a guarantee to a lender for mortgage-backed securities, if—
the guarantee is inconsistent with the requirements of this section; or
the risk of loss is allowed to increase, through lowering of the underwriting standards or other means, for the primary purpose of meeting the requirements of this section.
Deposit in Treasury
Amounts received from fee increases imposed under this section shall be deposited directly into the United States Treasury, and shall be available only to the extent provided in subsequent appropriations Acts. The fees charged pursuant to this section shall not be considered a reimbursement to the Federal Government for the costs or subsidy provided to an enterprise.
Phase-in
In general
The Director may provide for compliance with subsection (b) by allowing each enterprise to increase the guarantee fee charged by the enterprise gradually over the 2-year period beginning on the date of enactment of this section, in a manner sufficient to comply with this section. In determining a schedule for such increases, the Director shall—
provide for uniform pricing among lenders;
provide for adjustments in pricing based on risk levels; and
take into consideration conditions in financial markets.
Rule of construction
Nothing in this subsection shall be interpreted to undermine the minimum increase required by subsection (b).
Information collection and annual analysis
The Director shall require each enterprise to provide to the Director, as part of its annual report submitted to Congress—
a description of—
changes made to up-front fees and annual fees as part of the guarantee fees negotiated with lenders;
changes to the riskiness of the new borrowers compared to previous origination years or book years; and
any adjustments required to improve for future origination years or book years, in order to be in complete compliance with subsection (b); and
an assessment of how the changes in the guarantee fees described in paragraph (1) met the requirements of subsection (b).
Enforcement
Required adjustments
Based on the information from subsection (d) and any other information the Director deems necessary, the Director shall require an enterprise to make adjustments in its guarantee fee in order to be in compliance with subsection (b).
Noncompliance penalty
An enterprise that has been found to be out of compliance with subsection (b) for any 2 consecutive years shall be precluded from providing any guarantee for a period, determined by rule of the Director, but in no case less than 1 year.
Rule of construction
Nothing in this subsection shall be interpreted as preventing the Director from initiating and implementing an enforcement action against an enterprise, at a time the Director deems necessary, under other existing enforcement authority.
Expiration
The provisions of this section shall expire on October 1, 2021.
.
December 6, 2011
Read the second time and placed on the calendar