Middle Class Tax Cut Act of 2011 - Reduces employment tax rates in calendar year 2012 (payroll tax holiday period) for both employers and employees to 3.1%. Limits the reduction for employers to the first $5 million of wages paid by the employer in 2012.
Reduces the tax rate on the first $5 million of net earning of a self-employed taxpayer.
Allows nongovernmental employers a tax credit for payroll increases in the last quarter of 2011 and in 2012.
Appropriates funds to the social security trust funds to compensate for any revenue loss to such funds from the reduction in rates and the tax credit allowed by this Act.
Amends the Internal Revenue Code to impose on individual taxpayers in taxable years beginning after 2012 an additional tax equal to 3.25% of so much of their modified adjusted gross income as exceeds $1 million. Defines "modified adjusted gross income" as adjusted gross income reduced by any deduction allowed for investment interest. Provides for an inflation adjustment to the $1 million threshold amount for taxable years beginning after 2013.
[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 1917 Placed on Calendar Senate (PCS)]
Calendar No. 238
112th CONGRESS
1st Session
S. 1917
To create jobs by providing payroll tax relief for middle class
families and businesses, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
November 28, 2011
Mr. Casey (for himself, Mr. Menendez, Mr. Brown of Ohio, Ms. Stabenow,
Mr. Reid, Mr. Schumer, Mr. Blumenthal, Mr. Durbin, Mr. Lautenberg, Mr.
Leahy, and Mr. Whitehouse) introduced the following bill; which was
read the first time
November 29, 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.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Middle Class Tax Cut Act of 2011''.
TITLE I--PAYROLL TAX RELIEF
SEC. 101. TEMPORARY PAYROLL TAX CUT FOR EMPLOYERS, EMPLOYEES AND THE
SELF-EMPLOYED.
(a) Wages.--Notwithstanding any other provision of law--
(1) with respect to remuneration received during the
payroll tax holiday period, the rate of tax under 3101(a) of
the Internal Revenue Code of 1986 shall be 3.1 percent
(including for purposes of determining the applicable
percentage under sections 3201(a) and 3211(a) of such Code),
and
(2) with respect to remuneration paid during the payroll
tax holiday period, the rate of tax under 3111(a) of such Code
shall be 3.1 percent (including for purposes of determining the
applicable percentage under sections 3221(a) and 3211(a) of
such Code).
(3) Subsection (a)(2) shall only apply to--
(A) employees performing services in a trade or
business of a qualified employer, or
(B) in the case of a qualified employer exempt from
tax under section 501(a), in furtherance of the
activities related to the purpose or function
constituting the basis of the employer's exemption
under section 501.
(4) Subsection (a)(2) shall apply only to the first $5
million of remuneration or compensation paid by a qualified
employer subject to section 3111(a) or a corresponding amount
of compensation subject to 3221(a).
(b) Self-Employment Taxes.--
(1) In general.--Notwithstanding any other provision of
law, with respect to any taxable year which begins in the
payroll tax holiday period, the rate of tax under section
1401(a) of the Internal Revenue Code of 1986 shall be--
(A) 6.2 percent on the portion of net earnings from
self-employment subject to 1401(a) during the payroll
tax period that does not exceed the amount of the
excess of $5 million over total remuneration, if any,
subject to section 3111(a) paid during the payroll tax
holiday period to employees of the self-employed
person, and
(B) 9.3 percent for any portion of net earnings
from self-employment not subject to subsection
(b)(1)(A).
(2) Coordination with deductions for employment taxes.--For
purposes of the Internal Revenue Code of 1986, in the case of
any taxable year which begins in the payroll tax holiday
period--
(A) Deduction in computing net earnings from self-
employment.--The deduction allowed under section
1402(a)(12) of such Code shall be the sum of (i) 4.55
percent times the amount of the taxpayer's net earnings
from self-employment for the taxable year subject to
paragraph (b)(1)(A) of this section, plus (ii) 7.65
percent of the taxpayer's net earnings from self-
employment in excess of that amount.
(B) Individual deduction.--The deduction under
section 164(f) of such Code shall be equal to the sum
of (i) one-half of the taxes imposed by section 1401
(after the application of this section) with respect to
the taxpayer's net earnings from self-employment for
the taxable year subject to paragraph (b)(1)(A) of this
section plus (ii) 62.7 percent of the taxes imposed by
section 1401 (after the application of this section)
with respect to the excess.
(c) Regulatory Authority.--The Secretary may prescribe any such
regulations or other guidance necessary or appropriate to carry out
this section, including the allocation of the excess of $5 million over
total remuneration subject to section 3111(a) paid during the payroll
tax holiday period among related taxpayers treated as a single
qualified employer.
(d) Definitions.--
(1) Payroll tax holiday period.--The term ``payroll tax
holiday period'' means calendar year 2012.
(2) Qualified employer.--For purposes of this paragraph,
(A) In general.--The term ``qualified employer''
means any employer other than the United States, any
State or possession of the United States, or any
political subdivision thereof, or any instrumentality
of the foregoing.
(B) Treatment of employees of post-secondary
educational institutions.--Notwithstanding paragraph
(A), the term ``qualified employer'' includes any
employer which is a public institution of higher
education (as defined in section 101 of the Higher
Education Act of 1965).
(3) Aggregation rules.--For purposes of this subsection
rules similar to sections 414(b), 414(c), 414(m) and 414(o)
shall apply to determine when multiple entities shall be
treated as a single employer, and rules with respect to
predecessor and successor employers may be applied, in such
manner as may be prescribed by the Secretary.
(e) Transfers of Funds.--
(1) Transfers to federal old-age and survivors insurance
trust fund.--There are hereby appropriated to the Federal Old-
Age and Survivors Trust Fund and the Federal Disability
Insurance Trust Fund established under section 201 of the
Social Security Act (42 U.S.C. 401) amounts equal to the
reduction in revenues to the Treasury by reason of the
application of subsections (a) and (b) to employers other than
those described in (e)(2). Amounts appropriated by the
preceding sentence shall be transferred from the general fund
at such times and in such manner as to replicate to the extent
possible the transfers which would have occurred to such Trust
Fund had such amendments not been enacted.
(2) Transfers to social security equivalent benefit
account.--There are hereby appropriated to the Social Security
Equivalent Benefit Account established under section 15A(a) of
the Railroad Retirement Act of 1974 (45 U.S.C. 231n-1(a))
amounts equal to the reduction in revenues to the Treasury by
reason of the application of subsection (a) to employers
subject to the Railroad Retirement Tax. Amounts appropriated by
the preceding sentence shall be transferred from the general
fund at such times and in such manner as to replicate to the
extent possible the transfers which would have occurred to such
Account had such amendments not been enacted.
(f) Coordination With Other Federal Laws.--For purposes of applying
any provision of Federal law other than the provisions of the Internal
Revenue Code of 1986, the rate of tax in effect under section 3101(a)
of such Code shall be determined without regard to the reduction in
such rate under this section.
SEC. 102. TEMPORARY TAX CREDIT FOR INCREASED PAYROLL.
(a) In General.--Notwithstanding any other provision of law, each
qualified employer shall be allowed, with respect to wages for services
performed for such qualified employer, a payroll increase credit
determined as follows:
(1) With respect to the period from October 1, 2011 through
December 31, 2011, 6.2 percent of the excess, if any, (but not
more than $12.5 million of the excess) of the wages subject to
tax under section 3111(a) of the Internal Revenue Code of 1986
for such period over such wages for the corresponding period of
2010.
(2) With respect to the period from January 1, 2012 through
December 31, 2012,
(A) 6.2 percent of the excess, if any, (but not
more than $50 million of the excess) of the wages
subject to tax under section 3111(a) of the Internal
Revenue Code of 1986 for such period over such wages
for calendar year 2011, minus
(B) 3.1 percent of the excess (if any) of--
(i) the lesser of $5,000,000 or such wages
for calendar year 2012, over
(ii) such wages for calendar year 2011.
(3) In the case of a qualified employer for which the wages
subject to tax under section 3111(a) of the Internal Revenue
Code of 1986 (a) were zero for the corresponding period of 2010
referred to in subsection (a)(1), the amount of such wages
shall be deemed to be 80 percent of the amount of wages taken
into account for the period from October 1, 2011 through
December 31, 2011 and (b) were zero for the calendar year 2011
referred to in subsection (a)(2), then the amount of such wages
shall be deemed to be 80 percent of the amount of wages taken
into account for 2012.
(4) This subsection (a) shall only apply with respect to
the wages of employees performing services in a trade or
business of a qualified employer or, in the case of a qualified
employer exempt from tax under section 501(a) of the Internal
Revenue Code of 1986, in furtherance of the activities related
to the purpose or function constituting the basis of the
employer's exemption under section 501.
(b) Qualified Employers.--For purposes of this section--
(1) In general.--The term ``qualified employer'' means any
employer other than the United States, any State or possession
of the United States, or any political subdivision thereof, or
any instrumentality of the foregoing.
(2) Treatment of employees of post-secondary educational
institutions.--Notwithstanding subparagraph (1), the term
``qualified employer'' includes any employer which is a public
institution of higher education (as defined in section 101 of
the Higher Education Act of 1965).
(c) Aggregation Rules.--For purposes of this subsection rules
similar to sections 414(b), 414(c), 414(m) and 414(o) of the Internal
Revenue Code of 1986 shall apply to determine when multiple entities
shall be treated as a single employer, and rules with respect to
predecessor and successor employers may be applied, in such manner as
may be prescribed by the Secretary.
(d) Application of Credits.--The payroll increase credit shall be
treated as a credit allowable under Subtitle C of the Internal Revenue
Code of 1986 under rules prescribed by the Secretary of the Treasury,
provided that the amount so treated for the period described in
subsection (a)(1) or subsection (a)(2) shall not exceed the amount of
tax imposed on the qualified employer under section 3111(a) of such
Code for the relevant period. Any income tax deduction by a qualified
employer for amounts paid under section 3111(a) of such Code or similar
Railroad Retirement Tax provisions shall be reduced by the amounts so
credited.
(e) Transfers to Federal Old-Age and Survivors Insurance Trust
Fund.--There are hereby appropriated to the Federal Old-Age and
Survivors Trust Fund and the Federal Disability Insurance Trust Fund
established under section 201 of the Social Security Act (42 U.S.C.
401) amounts equal to the reduction in revenues to the Treasury by
reason of the amendments made by subsection (d). Amounts appropriated
by the preceding sentence shall be transferred from the general fund at
such times and in such manner as to replicate to the extent possible
the transfers which would have occurred to such Trust Fund had such
amendments not been enacted.
(f) Application to Railroad Retirement Taxes.--For purposes of
qualified employers that are employers under section 3231(a) of the
Internal Revenue Code of 1986, subsections (a)(1) and (a)(2) of this
section shall apply by substituting section 3221 for section 3111, and
substituting the term ``compensation'' for ``wages'' as appropriate.
TITLE II--SURTAX ON MILLIONAIRES
SEC. 201. SURTAX ON MILLIONAIRES.
(a) 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:
``PART VIII--SURTAX ON MILLIONAIRES
``Sec. 59B. Surtax on millionaires.
``SEC. 59B. SURTAX ON MILLIONAIRES.
``(a) General Rule.--In the case of a taxpayer other than a
corporation for any taxable year beginning after 2012, there is hereby
imposed (in addition to any other tax imposed by this subtitle) a tax
equal to 3.25 percent of so much of the modified adjusted gross income
of the taxpayer for such taxable year as exceeds $1,000,000 ($500,000,
in the case of a married individual filing a separate return).
``(b) Inflation Adjustment.--
``(1) In general.--In the case of any taxable year
beginning after 2013, each dollar amount under subsection (a)
shall be increased by an amount equal to--
``(A) such dollar amount, multiplied by
``(B) 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.
``(2) 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.
``(c) 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).
``(d) Special Rules.--
``(1) 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.
``(2) Citizens and residents living abroad.--The dollar
amount in effect under subsection (a) shall be decreased by the
excess of--
``(A) the amounts excluded from the taxpayer's
gross income under section 911, over
``(B) the amounts of any deductions or exclusions
disallowed under section 911(d)(6) with respect to the
amounts described in subparagraph (A).
``(3) 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).
``(4) 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.''.
(b) 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.''.
(c) 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.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2012.
Calendar No. 238
112th CONGRESS
1st Session
S. 1917
_______________________________________________________________________
A BILL
To create jobs by providing payroll tax relief for middle class
families and businesses, and for other purposes.
_______________________________________________________________________
November 29, 2011
Read the second time and placed on the calendar
Introduced in Senate
Introduced in the Senate. Read the first time. Placed on Senate Legislative Calendar under Read the First Time.
Read the second time. Placed on Senate Legislative Calendar under General Orders. Calendar No. 238.
Motion to proceed to consideration of measure made in Senate. (consideration: CR S8011-8012)
Cloture motion on the motion to proceed to the measure presented in Senate. (consideration: CR S8011; text: CR S8011)
Motion to proceed to consideration of measure withdrawn in Senate. (consideration: CR S8011)
Cloture motion on the motion to proceed to the measure withdrawn by unanimous consent in Senate.
Motion to proceed to measure considered in Senate. (consideration: CR S8138-8139)
Motion to proceed to consideration of measure, under the order of 12/1/2011, not having achieved the required 60 votes in the affirmative, was rejected in Senate by Yea-Nay. 51 - 49. Record Vote Number: 219.
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