I 

108TH CONGRESS 

1ST SESSION H. R. 150

To amend the Internal Revenue Code of 1986 to provide for regional cost 

of living adjustments. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 7, 2003

Mr. NADLER introduced the following bill; which was referred to the 

Committee on Ways and Means 

A BILL

To amend the Internal Revenue Code of 1986 to provide 

for regional cost of living adjustments.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Tax Equity Act’’. 

5 SEC. 2. REGIONAL COST-OF-LIVING ADJUSTMENTS IN INDI6 VIDUAL INCOME TAX RATES. 

7 (a) GENERAL RULE.—Subsection (f) of section 1 of 

8 the Internal Revenue Code of 1986 (relating to adjust9 ments in tax tables so that inflation will not result in tax 
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1 increases) is amended by adding at the end the following 

2 new paragraphs: 

3 ‘‘(9) REGIONAL COST-OF-LIVING ADJUST4 MENTS.—

5 ‘‘(A) IN GENERAL.—In the case of an indi6 vidual, the rate table otherwise in effect under 

7 this section for any taxable year (determined 

8 after the application of paragraph (1)) shall be 

9 further adjusted as provided in subparagraph 

10 (B). 

11 ‘‘(B) METHOD OF MAKING REGIONAL AD12 JUSTMENT.—The rate table otherwise in effect 

13 under this section with respect to any individual 

14 for any taxable year shall be adjusted as fol15 lows: 

16 ‘‘(i) The minimum and maximum dol17 lar amounts otherwise in effect for each 

18 rate bracket shall be multiplied by the ap19 plicable multiplier (for the calendar year in 

20 which the taxable year begins) which ap21 plies to the statistical area in which the in22 dividual’s primary place of abode during 

23 the taxable year is located. 
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1 ‘‘(ii) The rate applicable to any rate 

2 bracket (as adjusted by clause (i)) shall 

3 not be changed. 

4 ‘‘(iii) The amount setting forth the 

5 tax shall be adjusted to the extent nec6 essary to reflect the adjustments in the 

7 rate brackets. 

8 If any amount determined under clause (i) is 

9 not a multiple of $50, such amount shall be 

10 rounded to the nearest multiple of $50. 

11 ‘‘(10) DETERMINATION OF MULTIPLIERS.—

12 ‘‘(A) IN GENERAL.—Not later than De13 cember 15 of each calendar year, the Secretary 

14 shall prescribe an applicable multiplier for each 

15 statistical area of the United States, which shall 

16 apply to taxable years beginning during the suc17 ceeding calendar year. 

18 ‘‘(B) DETERMINATION OF MULTIPLIERS.—

19 ‘‘(i) For each statistical area where 

20 the cost-of-living differential for any cal21 endar year is greater than 100 percent, the 

22 applicable multiplier for such calendar year 

23 shall be 100 percent of such differential. 

24 ‘‘(ii) For each statistical area where 

25 the cost-of-living differential for any cal-
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1 endar year does not exceed 100 percent, 

2 the applicable multiplier for such calendar 

3 year shall be 1. 

4 ‘‘(C) COST-OF-LIVING DIFFERENTIAL.—

5 The cost-of-living differential for any statistical 

6 area for any calendar year is the percentage de7 termined by dividing—

8 ‘‘(i) the cost-of-living for such area for 

9 the preceding calendar year, by 

10 ‘‘(ii) the average cost-of-living for the 

11 United States for the preceding calendar 

12 year. 

13 ‘‘(D) COST-OF-LIVING FOR AREA.—

14 ‘‘(i) IN GENERAL.—For each calendar 

15 year beginning after 2002, the Secretary of 

16 Labor shall determine and publish a cost17 of-living index for each statistical area. 

18 ‘‘(ii) METHODOLOGY.—The cost-of-liv19 ing index determined under clause (i) for 

20 any statistical area for any calendar year 

21 shall be based on average market prices for 

22 the area for the 12-month period ending 

23 on August 31 of such calendar year. The 

24 market prices taken into account under the 

25 preceding sentence shall be selected and 
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1 used under the same methodology as is 

2 used by the Secretary of Labor in devel3 oping the Consumer Price Index for All 

4 Urban Consumers. 

5 ‘‘(E) STATISTICAL AREA.—For purposes of 

6 this subsection, the term ‘statistical area’ 

7 means—

8 ‘‘(i) any metropolitan statistical area 

9 as defined by the Secretary of Commerce, 

10 and 

11 ‘‘(ii) the portion of any State not 

12 within a metropolitan statistical area as so 

13 defined. 

14 ‘‘(F) AREAS OUTSIDE THE UNITED

15 STATES.—The applicable multiplier for any 

16 area outside the United States shall be 1.’’

17 (b) EFFECTIVE DATE.—The amendment made by 

18 this section shall apply to taxable years beginning after 

19 the date of the enactment of this Act.

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