I 

111TH CONGRESS 

1ST SESSION H. R. 1943 

To amend the Internal Revenue Code of 1986 to provide for adjustments 

in the individual income tax rates to reflect regional differences in the 

cost-of-living. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 2, 2009 

Mr. NADLER of New York (for himself, Mrs. LOWEY, and Mr. ISRAEL) 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 adjustments in the individual income tax rates to 

reflect regional differences in the cost-of-living. 

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 of 

5 2009’’. 

6 SEC. 2. REGIONAL COST-OF-LIVING ADJUSTMENTS IN INDI7 VIDUAL INCOME TAX RATES. 

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

9 the Internal Revenue Code of 1986 (relating to adjustVerDate Nov 24 2008 22:23 Apr 06, 2009 Jkt 079200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H1943.IH H1943

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1 ments in tax tables so that inflation will not result in tax 

2 increases) is amended by adding at the end thereof the 

3 following new paragraphs: 

4 ‘‘(9) REGIONAL COST-OF-LIVING ADJUST5 MENTS.— 

6 ‘‘(A) IN GENERAL.—In the case of an indi7 vidual, the rate table otherwise in effect under 

8 this section for any taxable year (determined 

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

10 further adjusted as provided in subparagraph 

11 (B). 

12 ‘‘(B) METHOD OF MAKING REGIONAL AD13 JUSTMENT.—The rate table otherwise in effect 

14 under this section with respect to any individual 

15 for any taxable year shall be adjusted as fol16 lows: 

17 ‘‘(i) The minimum and maximum dol18 lar amounts otherwise in effect for each 

19 rate bracket shall be multiplied by the ap20 plicable multiplier (for the calendar year in 

21 which the taxable year begins) which ap22 plies to the statistical area in which the in23 dividual’s primary place of abode during 

24 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 125 percent, the 

22 applicable multiplier for such calendar year 

23 is 90 percent of such differential. 

24 ‘‘(ii) For each statistical area where 

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1 endar year exceeds 97 percent but does not 

2 exceed 125 percent, the applicable multi3 plier for such calendar year is 1.05. 

4 ‘‘(iii) For each statistical area not de5 scribed in clause (i) or (ii), the applicable 

6 multiplier is the cost-of-living differential 

7 for the calendar year. 

8 ‘‘(C) COST-OF-LIVING DIFFERENTIAL.— 

9 The cost-of-living differential for any statistical 

10 area for any calendar year is the percentage de11 termined by dividing— 

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

13 the preceding calendar year; by 

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

15 United States for the preceding calendar 

16 year. 

17 ‘‘(D) COST-OF-LIVING FOR AREA.— 

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

19 year beginning after 2009, the Secretary of 

20 Labor shall determine and publish a cost21 of-living index for each statistical area. 

22 ‘‘(ii) METHODOLOGY.—The cost-of-liv23 ing index determined under clause (i) for 

24 any statistical area for any calendar year 

25 shall be based on average market prices for 


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1 the area for the 12-month period ending 

2 on August 31 of such calendar year. The 

3 market prices taken into account under the 

4 preceding sentence shall be selected and 

5 used under the same methodology as is 

6 used by the Secretary of Labor in devel7 oping the Consumer Price Index for All 

8 Urban Consumers. 

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

10 this subsection the term ‘statistical area’ 

11 means— 

12 ‘‘(i) any metropolitan statistical area 

13 as defined by the Secretary of Commerce, 

14 and 

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

16 within a metropolitan statistical area as so 

17 defined. 

18 ‘‘(11) AREAS OUTSIDE THE UNITED STATES.— 

19 The area applicable multiplier for any area outside 

20 the United States shall be 1.’’ 

21 (b) EFFECTIVE DATE.— 

22 (1) IN GENERAL.—The amendment made by 

23 this section shall apply to taxable years beginning 

24 after December 31, 2009. 


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1 (2) TRANSITION RULE.—Notwithstanding sec2 tion 1(f)(9)(A) of the Internal Revenue Code (as 

3 added by this section), the date for prescribing ap4 plicable multipliers for taxable years beginning in 

5 calendar year 2010 shall be the date 1 year after the 

6 date of the enactment of this Act. 

Æ 


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