Tax Equity Act of 2017

Summary: Tax Equity Act of 2017 This bill amends the Internal Revenue Code to provide for regional cost-of-living adjustments in individual income tax rates. The bill also directs the Department of Labor to determine and publish a regional cost-of-living index for each statistical area for 2017 and each calendar year thereafter. A &quot;statistical area&quot; is: (1) any metropolitan statistical area as defined by the Department of Commerce, and (2) the portion of any state not within a metropolitan statistical area.  

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Tax Equity Act of 2017''.

SEC. 2. REGIONAL COST-OF-LIVING ADJUSTMENTS IN INDIVIDUAL INCOME TAX 
              RATES.

    (a) General Rule.--Subsection (f) of section 1 of the Internal 
Revenue Code of 1986 is amended by adding at the end thereof the 
following new paragraphs:
            ``(9) Regional cost-of-living adjustments.--
                    ``(A) In general.--In the case of an individual, 
                for taxable years beginning after 2017 the rate table 
                otherwise in effect under this section for any taxable 
                year (determined after the application of paragraph 
                (1)) shall be further adjusted as provided in 
                subparagraph (B).
                    ``(B) Method of making regional adjustment.--The 
                rate table otherwise in effect under this section with 
                respect to any individual for any taxable year shall be 
                adjusted as follows:
                            ``(i) The minimum and maximum dollar 
                        amounts otherwise in effect for each rate 
                        bracket shall be multiplied by the applicable 
                        multiplier (for the calendar year in which the 
                        taxable year begins) which applies to the 
                        statistical area in which the individual's 
                        primary place of abode during the taxable year 
                        is located.
                            ``(ii) The rate applicable to any rate 
                        bracket (as adjusted by clause (i)) shall not 
                        be changed.
                            ``(iii) The amount setting forth the tax 
                        shall be adjusted to the extent necessary to 
                        reflect the adjustments in the rate brackets.
                If any amount determined under clause (i) is not a 
                multiple of $50, such amount shall be rounded to the 
                nearest multiple of $50.
            ``(10) Determination of multipliers.--
                    ``(A) In general.--Not later than December 15 of 
                each calendar year, the Secretary shall prescribe an 
                applicable multiplier for each statistical area of the 
                United States which shall apply to taxable years 
                beginning during the succeeding calendar year.
                    ``(B) Determination of multipliers.--
                            ``(i) For each statistical area where the 
                        cost-of-living differential for any calendar 
                        year is greater than 125 percent, the 
                        applicable multiplier for such calendar year is 
                        90 percent of such differential.
                            ``(ii) For each statistical area where the 
                        cost-of-living differential for any calendar 
                        year exceeds 97 percent but does not exceed 125 
                        percent, the applicable multiplier for such 
                        calendar year is 1.05.
                            ``(iii) For each statistical area not 
                        described in clause (i) or (ii), the applicable 
                        multiplier is the cost-of-living differential 
                        for the calendar year.
                    ``(C) Cost-of-living differential.--The cost-of-
                living differential for any statistical area for any 
                calendar year is the percentage determined by 
                dividing--
                            ``(i) the cost-of-living for such area for 
                        the preceding calendar year; by
                            ``(ii) the average cost-of-living for the 
                        United States for the preceding calendar year.
                    ``(D) Cost-of-living for area.--
                            ``(i) In general.--For calendar year 2017 
                        and each calendar year thereafter, the 
                        Secretary of Labor shall determine and publish 
                        a cost-of-living index for each statistical 
                        area.
                            ``(ii) Methodology.--The cost-of-living 
                        index determined under clause (i) for any 
                        statistical area for any calendar year shall be 
                        based on average market prices for the area for 
                        the 12-month period ending on August 31 of such 
                        calendar year. The market prices taken into 
                        account under the preceding sentence shall be 
                        selected and used under the same methodology as 
                        is used by the Secretary of Labor in developing 
                        the Consumer Price Index for All Urban 
                        Consumers.
                    ``(E) Statistical area.--For purposes of this 
                subsection the term `statistical area' means--
                            ``(i) any metropolitan statistical area as 
                        defined by the Secretary of Commerce, and
                            ``(ii) the portion of any State not within 
                        a metropolitan statistical area as so defined.
            ``(11) Areas outside the united states.--The area 
        applicable multiplier for any area outside the United States 
        shall be 1.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2017.