Text: H.R.5783 — 111th Congress (2009-2010)All Bill Information (Except Text)

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Introduced in House (07/20/2010)


111th CONGRESS
2d Session
H. R. 5783

To amend the Internal Revenue Code of 1986 to impose an excise tax on currency transactions.


IN THE HOUSE OF REPRESENTATIVES
July 20, 2010

Mr. Stark introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Foreign Affairs, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned


A BILL

To amend the Internal Revenue Code of 1986 to impose an excise tax on currency transactions.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. Short title; findings.

(a) Short title.—This Act may be cited as the “Investing in Our Future Act of 2010” .

(b) Findings.—Congress finds the following:

(1) While Wall Street continues to reap massive profits, the 2008 global economic crisis they helped cause has destabilized economies and impacted the budgets of the United States and impoverished nations, compromising the ability of governments to address pressing needs.

(2) Currency speculation has destabilizing impacts on the real economy and can contribute to financial crises.

(3) Millions of people around the world have been pushed into poverty because of the global financial crisis, through no fault of their own.

(4) The impacts of climate change, disease, and ill health undermine the economies of developing nations and their ability to contribute to a secure, stable world.

(5) Predictable, adequate, sustainable, long-term funding to address global health and climate change in developing countries at the scale needed does not currently exist.

(6) The United States has been a world leader in fighting against HIV/AIDS, Tuberculosis and Malaria and new science has shown that success against these major killers is possible within a generation, yet a greater commitment of resources is needed to save more lives.

(7) Additional investments are needed to increase the global health workforce and improve maternal and child health, reproductive health, and combat neglected tropical diseases in impoverished nations.

(8) Developing countries bear little responsibility for causing climate change, but they will be the most negatively impacted and lack the resources to adapt to and mitigate climate change.

(9) According to the Department of Defense’s Quadrennial Defense Review, global climate change could accelerate instability and conflict around the world and become a security threat for the United States.

(10) Global climate change has already begun to displace people and exacerbate competition and conflict over natural resources, increasing hunger, poverty and social inequities in developing countries.

(11) The Secretariat of the United Nations Framework Convention on Climate Change (UNFCCC) has estimated that by 2030 developing countries will require $176 billion annually in additional investment for climate change mitigation and the World Bank estimates that $75 to $100 billion is needed per year by 2050 for adaptation in developing countries.

(12) At the December 2009 UNFCCC climate negotiations in Copenhagen, the United States made a commitment to work with other nations to mobilize $100 billion a year by 2020 to help developing countries adapt to the impacts of climate change and mitigate emissions from climate change.

(13) There are approximately 15.3 million children in the United States under the age of 6 who require childcare while their parents work.

(14) Only one in seven children who are eligible for Federal, direct childcare assistance receives it.

(15) In the majority of States, the cost of childcare for a year is more than tuition at a four-year public university.

(16) Affordable and quality childcare is essential for working parents and is necessary for continued economic growth in the United States.

(17) Wall Street is enjoying a resurgence in profits and executive bonuses following the $700 billion Troubled Asset Relief Program bailout.

(18) In 2008, $4 trillion in daily currency transactions were undertaken, nearly 80 percent of which by a few major banks, without taxation.

(19) A small levy on currency would curb some speculative transactions, bringing greater stability into the currency market.

(20) To address the global impacts of the economic crisis, revenue from a small currency transaction tax should be invested to provide predictable, sustainable funding to address global health, climate change, and the lack of affordable childcare in the United States.

(21) Collection of a small tax would not disrupt legitimate trading in the currency trading markets and would have no significant impact on individual travelers or United States corporations doing business.

(22) The Secretary of State, Secretary of the Treasury, and the nations in the Organization for Economic Cooperation and Development should work together to implement a broader currency transaction tax to fund global health, poverty, and climate change initiatives.

SEC. 2. Excise tax on currency transactions.

(a) In general.—Chapter 36 of the Internal Revenue Code of 1986 is amended by inserting after subchapter B the following new subchapter:


“Sec. 4475. Currency transactions.

“SEC. 4475. Currency transactions.

“(a) In general.—There is hereby imposed a tax on each currency transaction made by, or on behalf of, a United States person.

“(b) Exception for low-Value transactions.—

“(1) IN GENERAL.—Subsection (a) shall not apply to any currency transaction made by, or on behalf of, a United States person, if the aggregate value of the currencies acquired by such person in all such transactions made during the calendar year does not exceed $10,000.

“(2) COORDINATION WITH WITHHOLDING RULES.—Subsection (e)(2) shall not apply to any currency transaction unless the value of the currency acquired by the United States person in such transaction exceeds $10,000. The preceding sentence shall not apply if the person who facilitates such currency transaction knows, or has reason to know, that the exception provided by paragraph (1) does not apply to such transaction.

“(c) Amount of tax.—

“(1) IN GENERAL.—The amount of the tax imposed under subsection (a) with respect to any currency transaction shall be equal to 0.005 percent of the value of the currency acquired in the transaction.

“(2) SPECIAL RULE FOR CURRENCY DERIVATIVES.—In the case of any currency derivative, the value of the currency acquired in the transaction shall be treated for purposes of this section as being equal to—

“(A) in the case of a forward contract, the value of the currency purchased or sold forward,

“(B) in the case of a notional principal contract, the value of the notional principal amount of the contract,

“(C) in the case of an option, the value of the currency that would be acquired in the event the option were exercised, and

“(D) in the case of any other currency derivative, the value as determined by the Secretary.

“(3) VALUATION OF CURRENCY.—For purposes of this section, the valuation of any currency shall be determined in the taxpayer’s functional currency (within the meaning of section 985) at the spot rate on the date of the transaction.

“(d) Currency transaction.—For purposes of this section—

“(1) IN GENERAL.—The term ‘currency transaction’ means—

“(A) the exchange of any currency for another currency, and

“(B) entering into any currency derivative.

“(2) CURRENCY DERIVATIVE.—The term ‘currency derivative’ means—

“(A) any currency notional principal contract, and

“(B) any option, forward contract, short position, hedge, or similar financial instrument with respect to any currency or currency notional principal contract.

“(e) Liability for tax; withholding.—

“(1) LIABILITY FOR TAX.—The tax imposed under subsection (a) with respect to any currency transaction shall be paid by the United States person referred to in subsection (a). Such person shall be allowed a credit against such tax in the amount withheld as tax under paragraph (2) with respect to such transaction.

“(2) WITHHOLDING BY CURRENCY TRANSACTION FACILITATORS.—

“(A) IN GENERAL.—Except as provided in subparagraph (B), each United States person which facilitates a currency transaction by, or on behalf of, a United States person shall deduct and withhold from the amount involved in such transaction a tax equal to the amount of the tax imposed under section 4475 with respect to such transaction.

“(B) AMOUNTS WITHHELD ONLY ONCE.—The Secretary shall prescribe regulations or other guidance to ensure that only one United States person deducts and withholds the amount described in subparagraph (A) with respect to each currency transaction. Such regulations or other guidance shall (subject to such exceptions as the Secretary may prescribe) require—

“(i) in the case of a currency transaction which is confirmed and matched by a United States person, that such person so deduct and withhold such amount, and

“(ii) in the case of a currency transaction not described in clause (i) which is settled by a United States person, that such person so deduct and withhold such amount.

“(3) COORDINATION WITH OTHER SECTIONS.—For purposes of so much of subtitle F (other than section 7205) as relates to chapter 24, amounts which are subject to withholding under paragraph (2) shall be treated as if they were wages paid by an employer to an employee (and amounts deducted and withheld under paragraph (2) shall be treated as if deducted and withheld under section 3402).

“(f) Application to expanded affiliated groups.—

“(1) IN GENERAL.—For purposes of this section, all members of the same expanded affiliated group shall be treated as one person for purposes of this section.

“(2) EXPANDED AFFILIATED GROUP.—For purposes of this subsection, the term ‘expanded affiliated group’ means an affiliated group as defined in section 1504(a), determined—

“(A) by substituting ‘more than 50 percent’ for ‘at least 80 percent’ each place it appears, and

“(B) without regard to paragraphs (2) and (3) of section 1504(b).

A partnership or any other entity (other than a corporation) shall be treated as a member of an expanded affiliated group if such entity is controlled (within the meaning of section 954(d)(3)) by members of such group (including any entity treated as a member of such group by reason of this sentence).”.

(b) Clerical amendment.—The table of subchapters for chapter 36 of such Code is amended by inserting after the item relating to subchapter B the following new item:

“SUBCHAPTER C. CURRENCY TRANSACTIONS”.

SEC. 3. Funding for child care.

(a) Child Care Assistance Trust Fund.—

(1) IN GENERAL.—There is established in the Treasury of the United States a trust fund to be known as the “Child Care Assistance Trust Fund”, consisting of such amounts as may be appropriated or credited to the Child Care Assistance Trust Fund as provided in this section.

(2) TRANSFER TO TRUST FUND OF AMOUNTS EQUIVALENT TO CERTAIN TAXES.—There are hereby appropriated to the Child Care Assistance Trust Fund, out of any money in the Treasury not otherwise appropriated, amounts equivalent to 20 percent of the taxes received in the Treasury under section 4475 of the Internal Revenue Code of 1986.

(3) EXPENDITURES FROM TRUST FUND.—Amounts in the Child Care Assistance Trust Fund shall be available, as provided by appropriation Acts, for making expenditures to carry out subsection (b).

(4) MANAGEMENT OF TRUST FUND.—For purposes of subchapter B of chapter 98 of the Internal Revenue Code of 1986, the provisions of this subsection shall be treated as provisions of subchapter A of such chapter.

(b) Child care assistance grants.—

(1) IN GENERAL.—Any appropriation under subsection (a)(3) from the Child Care Assistance Trust Fund shall be allocated among the States as an increase in the amount determined under section 418(a)(1) of the Social Security Act in the same proportion as the amount determined under such section with respect to such State (determined without regard to this subsection) bears to the aggregate amounts so determined with respect to all of the States.

(2) FUNDING TO BE ADDITIONAL.—It is the sense of the Congress that amounts made available under this subsection shall be in addition to (and shall not be a replacement for) other funding for child care assistance.

SEC. 4. Multilateral global health programs.

(a) Multilateral global health trust fund.—

(1) IN GENERAL.—There is established in the Treasury of the United States a trust fund to be known as the “Multilateral Global Health Trust Fund”, consisting of such amounts as may be appropriated or credited to the Multilateral Global Health Trust Fund as provided in this section.

(2) TRANSFER TO TRUST FUND OF AMOUNTS EQUIVALENT TO CERTAIN TAXES.—There are hereby appropriated to the Multilateral Global Health Trust Fund, out of any money in the Treasury not otherwise appropriated, amounts equivalent to 40 percent of the taxes received in the Treasury under section 4475 of the Internal Revenue Code of 1986.

(3) EXPENDITURES FROM TRUST FUND.—Amounts in the Multilateral Global Health Trust Fund shall be available, as provided by appropriation Acts, for making expenditures to carry out subsection (b).

(4) MANAGEMENT OF TRUST FUND.—For purposes of subchapter B of chapter 98 of the Internal Revenue Code of 1986, the provisions of this subsection shall be treated as provisions of subchapter A of such chapter.

(b) Multilateral global health grant program.—

(1) IN GENERAL.—The Secretary of State shall make grants to assist developing countries in addressing HIV/AIDS, tuberculosis, malaria, maternal mortality, family planning, neglected diseases, and other health issues affecting developing countries.

(2) ELIGIBILITY FOR GRANTS.—Grants under paragraph (1) may be made to—

(A) the Global Fund to Fight AIDS, Tuberculosis and Malaria to provide grants described in paragraph (1), and

(B) other multilateral health funding mechanisms which the Secretary certifies—

(i) provide a significant majority of their total funding to programs in the form of grants,

(ii) include independent and external technical review of programs in the awarding of funding,

(iii) include governance structures that involve donor governments, implementing governments, civil society, and affected communities as equal decision-makers,

(iv) provide funding based on plans developed by implementing countries through country-level processes that include equal and meaningful involvement of civil society and impacted communities,

(v) require measures of performance of all projects and formal mechanisms that condition continued financing on successful performance and outcomes, and

(vi) include mechanisms for strict financial accountability and provides transparency of all decisions, evaluations, and finances through publically accessible documents.

(3) FUNDING TO BE ADDITIONAL.—It is the sense of the Congress that grants made under this subsection shall be in addition to (and shall not be a replacement for) other funding for global health initiatives in developing countries.

SEC. 5. Global climate change adaptation and mitigation.

(a) Global climate change adaptation and mitigation trust fund.—

(1) IN GENERAL.—There is established in the Treasury of the United States a trust fund to be known as the “Global Climate Change Adaptation and Mitigation Trust Fund”, consisting of such amounts as may be appropriated or credited to the Global Climate Change Adaptation and Mitigation Trust Fund as provided in this section.

(2) TRANSFER TO TRUST FUND OF AMOUNTS EQUIVALENT TO CERTAIN TAXES.—There are hereby appropriated to the Global Climate Change Adaptation and Mitigation Trust Fund, out of any money in the Treasury not otherwise appropriated, amounts equivalent to 40 percent of the taxes received in the Treasury under section 4475 of the Internal Revenue Code of 1986.

(3) EXPENDITURES FROM TRUST FUND.—Amounts in the Global Climate Change Adaptation and Mitigation Trust Fund shall be available, as provided by appropriation Acts, for making expenditures to carry out subsection (b).

(4) MANAGEMENT OF TRUST FUND.—For purposes of subchapter B of chapter 98 of the Internal Revenue Code of 1986, the provisions of this subsection shall be treated as provisions of subchapter A of such chapter.

(b) Global climate change adaptation and mitigation grant program.—

(1) IN GENERAL.—Except as provided in paragraph (2), any appropriation under subsection (a)(3) from the Global Climate Change Adaptation and Mitigation Trust Fund shall be used for contributions to a United Nations Framework Convention on Climate Change (UNFCCC) global climate fund for adaptation and mitigation which—

(A) is fully accountable to the Conference of Parties of the UNFCCC, in which the Conference of Parties selects members of the executive board to manage distinct funding windows, including for adaptation and mitigation; approves rules, guidelines, priorities, and policies proposed by the executive board; and receives and determines the allocation and disbursement of funding,

(B) is independent in management and governance from existing financial institutions,

(C) is fully consistent with Article 11 of the UNFCCC,

(D) provides funds only in the form of grants for adaptation,

(E) has an Executive Board made up of equitable and balanced representation within the five United Nations regions and additional representation from countries most vulnerable to climate change and from civil society in developed and developing countries,

(F) ensures that in areas where any activities or programs are planned, local communities, particularly the most vulnerable populations therein, are engaged through adequate disclosure of information, public participation and consultation, and have decision-making power in, and consent to, how funding is used, monitored and evaluated,

(G) provides transparent and accountable processes for the handling of financing, and

(H) provides recipient governments the choice to nominate a national implementing entity which meets agreed fiduciary standards to directly apply for and access funding.

(2) TRANSITIONAL RULES.—If an appropriation under subsection (a)(3) from the Global Climate Change Adaptation and Mitigation Trust Fund is made before the UNFCCC global climate fund for adaptation and mitigation described in paragraph (1) has been established, such appropriation shall be used for contributions to the Adaptation Fund established by Parties to the Kyoto Protocol of the UNFCCC, the Least Developed Countries Fund of the UNFCCC, or one or more multilateral funds that is agreed to by Parties to the UNFCCC or the Kyoto Protocol, subject to a certification by the Secretary of the Treasury that the program to which such contributions are made—

(A) provides funds only in the form of grants for adaptation,

(B) ensures that in areas where any activities or programs are planned, local communities, particularly the most vulnerable populations therein, are engaged through adequate disclosure of information, public participation and consultation, and have decisionmaking power in, and consent to, how funding is used, monitored and evaluated,

(C) has a governance structure with equitable and balanced representation of all parties within a transparent system of governance,

(D) provides transparent and accountable processes for the handling of financing,

(E) provides recipient governments the choice to nominate a national implementing entity which meets agreed fiduciary standards to directly apply for and access funding, and

(F) is fully consistent with article 11.1 of the UNFCCC which states that the fund must function under the guidance of and be accountable to the Conference of the Parties.

(3) FUNDING TO BE ADDITIONAL.—It is the sense of the Congress that grants made under this subsection shall be in addition to (and shall not be a replacement for) other funding for global climate change adaptation and mitigation initiatives in developing countries.