S.410 - Wall Street Trading and Speculators Tax Act113th Congress (2013-2014)
|Sponsor:||Sen. Harkin, Tom [D-IA] (Introduced 02/28/2013)|
|Committees:||Senate - Finance|
|Latest Action:||02/28/2013 Read twice and referred to the Committee on Finance. (All Actions)|
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Text: S.410 — 113th Congress (2013-2014)All Information (Except Text)
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Introduced in Senate (02/28/2013)
To amend the Internal Revenue Code of 1986 to impose a tax on certain trading transactions.
Mr. Harkin (for himself, Mr. Whitehouse, and Mr. Sanders) introduced the following bill; which was read twice and referred to the Committee on Finance
To amend the Internal Revenue Code of 1986 to impose a tax on certain trading transactions.
This Act may be cited as the “Wall Street Trading and Speculators Tax Act”.
(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. Tax on trading transactions.
“(a) Imposition of tax.—There is hereby imposed a tax on 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 0.03 percent of the specified base amount with respect to such covered transaction.
“(1) except as provided in paragraph (2), the fair market value of the 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.
“(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
“(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.
“(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,
“(D) any evidence of an interest in, or a derivative financial instrument with respect to, any security or securities described in subparagraph (A), (B), or (C),
“(E) any derivative financial instrument with respect to any currency or commodity, and
“(F) any notional principal contract.
“(2) DERIVATIVE FINANCIAL INSTRUMENT.—The term ‘derivative financial instrument’ includes any option, forward contract, futures contract, or any similar financial instrument.
“(3) NOTIONAL PRINCIPAL CONTRACT.—Except as otherwise provided by the Secretary, the term ‘notional principal contract’ means any financial instrument which requires two or more payments at specified intervals calculated by reference to a specified index upon one or more notional principal amounts. An amount shall not fail to be treated as a payment described in the preceding sentence merely because such amount is fixed on one date and paid or otherwise taken into account on a different date.
“(A) a fixed rate, price, or amount, or
“(B) a variable rate, price, or amount,
“(C) any index based on any objectively determinable information (including the occurrence or nonoccurrence of any event) which is not within the control of any of the parties to the instrument and is not unique to any of the parties’ circumstances, and
“(D) any other index as the Secretary may prescribe.
“(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.
“(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), or (C) of subsection (e)(1).
“(A) is traded on a trading facility located in the United States, and
“(B) has a fixed maturity of not more than 100 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.
“(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)) which is a United States person, such broker.
“(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
“(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), (E), or (F) 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).
“(1) IN GENERAL.—For purposes of this section, a controlled foreign corporation shall be treated as a United States person.
“(2) SPECIAL RULES FOR PAYMENT OF TAX ON DIRECT, ETC., TRANSACTIONS.—In the case of any transaction which is a covered transaction solely by reason of paragraph (1) and which is not described in subsection (g)(1)—
“(A) PAYMENT BY UNITED STATES SHAREHOLDERS.—Any tax which would (but for this paragraph) be payable under subsection (g)(2) by the controlled foreign corporation shall, in lieu thereof, be paid by the United States shareholders of such controlled foreign corporation as provided in subparagraph (B).
“(i) the stock which such United States shareholder owns (within the meaning of section 958(a)) in such controlled foreign corporation, bears to
“(ii) the stock so owned by all United States shareholders in such controlled foreign corporation.
“(C) DEFINITIONS.—For purposes of this subsection, the terms ‘United States shareholder’ and ‘controlled foreign corporation’ have the meanings given such terms in sections 951(b) and 957(a), respectively.
“(j) Administration.—The Secretary shall carry out this section in consultation with the Securities and Exchange Commission and the Commodity Futures Trading Commission.
“(1) provide guidance regarding such information reporting concerning covered transactions as the Secretary deems appropriate, 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.”.
(1) IN GENERAL.—Subpart C of part IV of subchapter A of chapter 1 of such Code is amended by inserting after section 36B the following new section:
“(a) In general.—There shall be allowed as a credit against the tax imposed by this subtitle for the taxable year an amount equal to 0.03 percent of the qualified tax-favored account contributions of the taxpayer for the taxable year.
“(1) with respect to qualified retirement plans (as defined in section 4974(c)) of the taxpayer, the amount contributed to such plans for such taxable year to the extent that such contributions are allowable as a deduction or are excludable from gross income (or, in the case of a Roth IRA (as defined in section 408A(b)), the amount contributed),
“(2) with respect to Archer MSAs of the taxpayer, the amount allowed as a deduction under section 220 for such taxable year,
“(3) with respect to health savings accounts of the taxpayer, the amount allowed as a deduction under section 223 for such taxable year, plus
“(4) with respect to qualified tuition programs (as defined in section 529) and Coverdell education savings accounts (as defined in section 530) with respect to which the taxpayer is the designated beneficiary (or, in the case of a designated beneficiary with respect to whom another taxpayer is allowed a deduction under section 151, such other taxpayer in lieu of such designated beneficiary), the amount contributed for such taxable year.”.
(A) Section 1324(b)(2) of title 31, United States Code, is amended by inserting “, 36C” after “36B”.
(B) The table of sections for subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting before the item relating to section 37 the following new item:
“Sec. 36C. Offset for transaction tax on contributions to certain tax-favored accounts.”.
(c) Information reporting with respect to controlled foreign corporations.—Subparagraph (B) of section 6038(a)(1) is amended by inserting “and transactions which are covered transactions for purposes of section 4475 by reason of the application of section 4475(i)(1) to such corporation” before the semicolon at the end.
(d) Clerical amendment.—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.”.
(e) Effective date.—The amendments made by this section shall apply to transactions after December 31, 2013.