Wall Street Trading and Speculators Tax Act

Summary: Wall Street Trading and Speculators Tax Act - Amends the Internal Revenue Code to impose a .03% excise tax on the purchase of a security if: (1) such purchase occurs or is cleared on a trading facility located in the United States, or (2) the purchaser or seller is a U.S. person.  Defines "security" to include: (1) stocks, partnership interests, notes, bonds, debentures, or other evidences of indebtedness; (2) interests in a derivative financial instrument (i.e., any option, forward contract, futures contract, or any similar financial instrument) and (3) any notional principal contract.  Exempts from such tax: (1) initial issues of securities; (2) any note, bond, debenture, or other evidence of indebtedness which is traded on a trading facility located in the United States and has a fixed maturity of not more than 100 days; and (3) securities traded pursuant to certain lending arrangements. Makes such tax applicable to transactions by controlled foreign corporations and payable by its U.S. shareholders.  Allows an offset against such tax for contributions to certain tax-favored accounts, including tax-exempt retirement plans, Archer medical savings accounts, health savings accounts, and qualified tuition plans and Coverdell education savings accounts.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Wall Street Trading and Speculators 
Tax Act''.

SEC. 2. TRANSACTION TAX.

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

              ``Subchapter C--Tax on Trading Transactions

``Sec. 4475. Tax on trading transactions.

``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.
    ``(c) Specified Base Amount.--For purposes of this section, the 
term `specified base amount' means--
            ``(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.
    ``(d) Covered Transaction.--For purposes of this section, the term 
`covered transaction' means--
            ``(1) except as provided in paragraph (2), any purchase 
        if--
                    ``(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
            ``(2) any transaction with respect to a security described 
        in subparagraph (D), (E), or (F) of subsection (e)(1), if--
                    ``(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.
    ``(e) Security and Other Definitions.--For purposes of this 
section--
            ``(1) In general.--The term `security' means--
                    ``(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.
            ``(4) Specified index.--The term `specified index' means 
        any 1 or more of any combination of--
                    ``(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.
            ``(5) Treatment of exchanges.--
                    ``(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.
    ``(f) Exceptions.--
            ``(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).
            ``(2) Exception for certain traded short-term 
        indebtedness.--A note, bond, debenture, or other evidence of 
        indebtedness which--
                    ``(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.
    ``(g) By Whom Paid.--
            ``(1) In general.--The tax imposed by this section shall be 
        paid by--
                    ``(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.
            ``(2) Special rules for direct, etc., transactions.--In the 
        case of any transaction to which paragraph (1) does not apply, 
        the tax imposed by this section shall be paid by--
                    ``(A) in the case of a transaction described in 
                subsection (d)(1)--
                            ``(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
                    ``(B) in the case of a transaction described in 
                subsection (d)(2)--
                            ``(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).
    ``(i) Application to Transactions by Controlled Foreign 
Corporations.--
            ``(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).
                    ``(B) Pro rata shares.--Each such United States 
                shareholder shall pay the same proportion of such tax 
                as--
                            ``(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.
    ``(k) Guidance; Regulations.--The Secretary shall--
            ``(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.''.
    (b) Credit With Respect to Certain Tax-Favored Accounts To Offset 
Transaction Tax.--
            (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:

``SEC. 36C. OFFSET FOR TRANSACTION TAX WITH RESPECT TO CERTAIN TAX-
              FAVORED ACCOUNTS.

    ``(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.
    ``(b) Qualified Tax-Favored Account Contributions.--For purposes of 
this section, the term `qualified tax-favored account contributions' 
means, with respect to any taxable year, the sum of--
            ``(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.''.
            (2) Conforming amendments.--
                    (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.