I 

111TH CONGRESS 

1ST SESSION H. R. 2380 

To amend the Internal Revenue Code of 1986 to reduce social security 

payroll taxes and to reduce the reliance of the United States economy 

on carbon-based energy sources. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 13, 2009 

Mr. INGLIS (for himself, Mr. LIPINSKI, and Mr. FLAKE) introduced the following bill; which was referred to the Committee on Ways and Means, 

and in addition to the Committee on Rules, for a period to be subsequently determined by the Speaker, in each case for consideration of such 

provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend the Internal Revenue Code of 1986 to reduce 

social security payroll taxes and to reduce the reliance 

of the United States economy on carbon-based energy 

sources. 

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 ‘‘Raise Wages, Cut Car5 bon Act of 2009’’. 


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1 SEC. 2. REDUCTION OF SOCIAL SECURITY TAXES; TAX ON 

2 COMBUSTIBLE FOSSIL FUELS. 

3 (a) IN GENERAL.—Chapter 38 of the Internal Rev4 enue Code of 1986 (relating to environmental taxes) is 

5 amended by adding at the end thereof the following new 

6 subchapter: 

7 ‘‘Subchapter E—Reduction of Social Security 

8 Taxes; Tax on Combustible Fossil Fuels 

‘‘PART I. CARBON TAX REVENUES TO OFFSET SOCIAL SECURITY TAXES. 

‘‘PART II. TAX ON COMBUSTIBLE FOSSIL FUELS. 

‘‘PART III. TAX ON CERTAIN ADDITIONAL IMPORTED SUBSTANCES. 

‘‘PART IV. SUPERMAJORITY REQUIRED TO CHANGE REVENUE NEUTRALITY

9 ‘‘PART I—CARBON TAX REVENUES TO OFFSET 

10 SOCIAL SECURITY TAXES 

‘‘Sec. 4691. Disposition of revenues. 

11 ‘‘SEC. 4691. DISPOSITION OF REVENUES. 

12 ‘‘(a) AMOUNTS APPROPRIATED TO SOCIAL SECURITY

13 TRUST FUNDS.— 

14 ‘‘(1) IN GENERAL.—There are hereby appro15 priated to the social security trust funds an amount 

16 equal to the net revenues received in the Treasury 

17 from the taxes imposed by parts II and III. 

18 ‘‘(2) ALLOCATION AMONG FUNDS.—Amounts 

19 shall be appropriated to such funds under paragraph 

20 (1) in the same proportions as amounts would (but 

21 for this subchapter) be appropriated to such funds 


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1 under the Social Security Act and the Railroad Re2 tirement Act of 1974. 

3 ‘‘(b) REDUCTION IN SOCIAL SECURITY TAXES.— 

4 ‘‘(1) IN GENERAL.—The rate of each social se5 curity tax for each calendar year (determined with6 out regard to this section) shall be reduced by the 

7 number of percentage points equal to— 

8 ‘‘(A) such rate, multiplied by 

9 ‘‘(B) the reduction percentage determined 

10 by the Secretary for such year. 

11 ‘‘(2) REDUCTION PERCENTAGE.—The reduction 

12 percentage determined by the Secretary under para13 graph (1) for any calendar year shall be the highest 

14 percentage which the Secretary estimates will result 

15 in deposits into each trust fund equal to the amount 

16 which would (without regard to this section) be ap17 propriated to each trust fund for such year on ac18 count of social security taxes. 

19 ‘‘(c) INCREASE IN PAYMENTS TO SOCIAL SECURITY

20 RECIPIENTS FOR 2010 TO OFFSET COST OF CARBON TAX

21 BEFORE TAX REFLECTED IN COST-OF-LIVING ADJUST22 MENTS.—The Secretary shall notify the Managing Trust23 ee of the Federal Old-Age and Survivors Insurance Trust 

24 Fund established under section 201 of the Social Security 

25 Act to increase the payments to which an individual is enVerDate Nov 24 2008 21:16 May 18, 2009 Jkt 079200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2380.IH H2380

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1 titled under section 205(i) of such Act for 2010 by the 

2 average cost of the taxes imposed by parts II and III 

3 which is borne by individuals who are so entitled by reason 

4 of price increases in the costs of products and services. 

5 ‘‘(d) DEFINITIONS.—For purposes of this sub6 chapter— 

7 ‘‘(1) SOCIAL SECURITY TAX.—The term ‘social 

8 security tax’ means— 

9 ‘‘(A) the tax imposed by section 3101(a) 

10 (and so much of the tax imposed by section 

11 3201(a) as is determined by reference to the 

12 tax imposed by section 3101(a)), 

13 ‘‘(B) the tax imposed by section 3111(a) 

14 (and so much of the tax imposed by section 

15 3221(a) as is determined by reference to the 

16 tax imposed by section 3111(a)), and 

17 ‘‘(C) the tax imposed by section 1401(a) 

18 (and so much of the tax imposed by section 

19 3211(a) as is determined by reference to the 

20 taxes imposed by sections 3101(a) and 

21 3111(a)). 

22 ‘‘(2) SOCIAL SECURITY TRUST FUND.—The 

23 term ‘social security trust fund’ means— 


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1 ‘‘(A) the Federal Old-Age and Survivors 

2 Insurance Trust Fund established by section 

3 202 of the Social Security Act, and 

4 ‘‘(B) the Social Security Equivalent Ben5 efit Account established under section 15A of 

6 the Railroad Retirement Act of 1974. 

7 ‘‘(e) DETERMINATION BASED ON ESTIMATES.—De8 termination under subsections (a) and (b) shall be made 

9 on the basis of estimates by the Secretary. Proper adjust10 ments shall be made to the extent prior estimates were 

11 in excess of or less than more accurate amounts. 

12 ‘‘(f) PUBLICATION OF RATE REDUCTIONS.—Any ad13 justment under this section of social security tax rates for 

14 any calendar year shall be published in the Federal Reg15 ister on or before November 1 of the preceding calendar 

16 year. 

17 ‘‘PART II—TAX ON COMBUSTIBLE FOSSIL FUELS 

‘‘Sec. 4692. Imposition of tax. 

‘‘Sec. 4693. Refunds or credits. 

‘‘Sec. 4694. Other definitions and special rules. 

18 ‘‘SEC. 4692. IMPOSITION OF TAX. 

19 ‘‘(a) IN GENERAL.—There is hereby imposed a tax 

20 on any taxable carbon substance sold by the manufacturer, 

21 producer, or importer thereof. 

22 ‘‘(b) AMOUNT OF TAX.— 

23 ‘‘(1) IN GENERAL.—The amount of tax imposed 

24 by subsection (a) on any taxable carbon substance 


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1 shall be the applicable amount per ton of the carbon 

2 dioxide emissions potential of such substance, as de3 termined by the Secretary in consultation with the 

4 Secretary of Energy. 

5 ‘‘(2) FRACTIONAL PART OF TON.—In the case 

6 of a fraction of a ton, the tax imposed by subsection 

7 (a) shall be the same fraction of the amount of such 

8 tax imposed on a whole ton. 

9 ‘‘(3) APPLICABLE AMOUNT.—For purposes of 

10 paragraph (1)— 

11 ‘‘(A) IN GENERAL.—The applicable 

12 amount for any calendar year is the amount de13 termined under the following table for such 

14 year, as adjusted under subparagraph (B): 

‘‘In the case of calendar year— The applicable 

amount is—

2010 .......................................................................... $ 15.00

2011 .......................................................................... 15.98

2012 .......................................................................... 17.02

2013 .......................................................................... 18.13

2014 .......................................................................... 19.32

2015 .......................................................................... 20.58

2016 .......................................................................... 21.92

2017 .......................................................................... 23.35

2018 .......................................................................... 24.88

2019 .......................................................................... 26.50

2020 .......................................................................... 28.23

2021 .......................................................................... 30.07

2022 .......................................................................... 32.04

2023 .......................................................................... 34.13

2024 .......................................................................... 36.36

2025 .......................................................................... 38.73

2026 .......................................................................... 41.26

2027 .......................................................................... 43.95

2028 .......................................................................... 46.82

2029 .......................................................................... 49.88

2030 .......................................................................... 53.13

2031 .......................................................................... 56.60

2032 .......................................................................... 60.30


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2033 .......................................................................... 64.23

2034 .......................................................................... 68.43

2035 .......................................................................... 72.89

2036 .......................................................................... 77.65

2037 .......................................................................... 82.72

2038 .......................................................................... 88.12

2039 .......................................................................... 93.87

2040 or thereafter .................................................... 100.00. 

1 ‘‘(B) INFLATION ADJUSTMENT.— 

2 ‘‘(i) IN GENERAL.—The applicable 

3 amount contained in the table under sub4 paragraph (A) for any calendar year after 

5 2010 shall be increased by an amount 

6 equal to— 

7 ‘‘(I) such applicable amount, 

8 multiplied by 

9 ‘‘(II) the cost-of-living adjust10 ment determined under section 1(f)(3) 

11 for such calendar year, determined by 

12 substituting ‘calendar year 2009’ for 

13 ‘calendar year 1992’ in subparagraph 

14 (B) thereof. 

15 ‘‘(ii) ROUNDING.—Any increase deter16 mined under clause (i) shall be rounded to 

17 the nearest cent. 

18 ‘‘(c) TAXABLE CARBON SUBSTANCE.—For purposes 

19 of this subchapter, the term ‘taxable carbon substance’ 

20 means— 

21 ‘‘(1) coal (including lignite and peat), 


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1 ‘‘(2) petroleum and any petroleum product (as 

2 defined in section 4612(a)(3)), and 

3 ‘‘(3) natural gas, 

4 which is extracted, manufactured, or produced in the 

5 United States or entered into the United States for con6 sumption, use, or warehousing. 

7 ‘‘(d) SUBSTANCE TAXED ONLY ONCE.—No tax shall 

8 be imposed by subsection (a) with respect to a taxable car9 bon substance if the person who would be liable for such 

10 tax establishes that a prior tax imposed by such section 

11 has been imposed with respect to such substance. 

12 ‘‘SEC. 4693. REFUNDS OR CREDITS. 

13 ‘‘(a) SEQUESTERED CARBON.—Under regulations 

14 prescribed by the Secretary, if a person uses a taxable car15 bon substance so that the carbon associated with such sub16 stance will not be emitted, then an amount equal to the 

17 amount of tax in effect under section 4692(b) with respect 

18 to such substance for the calendar year in which such use 

19 begins shall be allowed as a credit or refund (without in20 terest) to such person in the same manner as if it were 

21 an overpayment of tax imposed by section 4692. 

22 ‘‘(b) PREVIOUSLY TAXED CARBON SUBSTANCES

23 USED TO MAKE ANOTHER TAXABLE CARBON SUB24 STANCE.—Under regulations prescribed by the Secretary, 

25 if— 


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1 ‘‘(1) a tax under section 4692 was paid with re2 spect to any taxable carbon substance, and 

3 ‘‘(2) such substance was used by any person in 

4 the manufacture or production of any other sub5 stance which is a taxable carbon substance, 

6 then an amount equal to the tax so paid shall be allowed 

7 as a credit or refund (without interest) to such person in 

8 the same manner as if it were an overpayment of tax im9 posed by section 4692. In any case to which this sub10 section applies, the amount of any such credit or refund 

11 shall not exceed the amount of tax imposed by section 

12 4692 on the other taxable fuel manufactured or produced 

13 (or which would have been imposed by such subsection on 

14 such other fuel but for section 4692(d)). 

15 ‘‘(c) EXEMPTION FOR EXPORTS.— 

16 ‘‘(1) TAX-FREE SALES.— 

17 ‘‘(A) IN GENERAL.—No tax shall be im18 posed under subsection (a) on the sale by the 

19 manufacturer or producer of any taxable carbon 

20 substance for export or for resale by the pur21 chaser to a second purchaser for export. 

22 ‘‘(B) PROOF OF EXPORT REQUIRED.— 

23 Rules similar to the rules of section 4221(b) 

24 shall apply for purposes of subparagraph (A). 

25 ‘‘(2) CREDIT OR REFUND.—If— 


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1 ‘‘(A) any person exports— 

2 ‘‘(i) a taxable carbon substance, or 

3 ‘‘(ii) any other product any portion of 

4 the cost of which is attributable to the use 

5 of any taxable carbon substance as an en6 ergy source for the manufacture or produc7 tion of such product, and 

8 ‘‘(B) such person establishes to the satis9 faction of the Secretary the portion of such cost 

10 which is attributable to the tax under section 

11 4692, 

12 credit or refund (without interest) of such tax shall 

13 be allowed or made to such person. 

14 ‘‘(3) REGULATIONS.—The Secretary shall pre15 scribe such regulations as may be necessary to carry 

16 out the purposes of this subsection. 

17 ‘‘SEC. 4694. OTHER DEFINITIONS AND SPECIAL RULES. 

18 ‘‘(a) DEFINITIONS.—For purposes of this sub19 chapter— 

20 ‘‘(1) UNITED STATES.—The term ‘United 

21 States’ has the meaning given such term by section 

22 4612(a)(4). 

23 ‘‘(2) IMPORTER.—The term ‘importer’ means 

24 the person entering the article for consumption, use, 

25 or warehousing. 


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1 ‘‘(3) TON.—The term ‘ton’ means 2,000 

2 pounds. In the case of any taxable carbon substance 

3 which is a gas, the term ‘ton’ means the amount of 

4 such gas in cubic feet which is the equivalent of 

5 2,000 pounds on a molecular weight basis. 

6 ‘‘(b) USE TREATED AS SALE.—If any person manu7 factures, produces, or imports any taxable carbon sub8 stance and uses such substance, then such person shall 

9 be liable for tax under section 4692 in the same manner 

10 as if such substance were sold by such person. 

11 ‘‘(c) SPECIAL RULES FOR INVENTORY EX12 CHANGES.— 

13 ‘‘(1) IN GENERAL.—Except as provided in para14 graph (2), in any case in which a manufacturer, pro15 ducer, or importer of a taxable carbon substance ex16 changes such substance as part of an inventory ex17 change with another person— 

18 ‘‘(A) such exchange shall not be treated as 

19 a sale, and 

20 ‘‘(B) such other person shall, for purposes 

21 of section 4692, be treated as the manufac22 turer, producer, or importer of such substance. 

23 ‘‘(2) REGISTRATION REQUIREMENT.—Para24 graph (1) shall not apply to any inventory exchange 

25 unless— 


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1 ‘‘(A) both parties are registered with the 

2 Secretary as manufacturers, producers, or im3 porters of taxable carbon substances, and 

4 ‘‘(B) the person receiving the taxable car5 bon substance has, at such time as the Sec6 retary may prescribe, notified the manufac7 turer, producer, or importer of such person’s 

8 registration number and the internal revenue 

9 district in which such person is registered. 

10 ‘‘(3) INVENTORY EXCHANGE.—For purposes of 

11 this subsection, the term ‘inventory exchange’ means 

12 any exchange in which 2 persons exchange property 

13 which is, in the hands of each person, property de14 scribed in section 1221(a)(1). 

15 ‘‘PART III—TAX ON CERTAIN ADDITIONAL 

16 IMPORTED PRODUCTS 

‘‘Sec. 4695. Imposition of tax. 

‘‘Sec. 4696. Imported taxable product. 

17 ‘‘SEC. 4695. IMPOSITION OF TAX. 

18 ‘‘(a) IN GENERAL.—There is hereby imposed a tax 

19 on any imported taxable product sold or used by the im20 porter thereof. 

21 ‘‘(b) AMOUNT OF TAX.—The amount of the tax im22 posed by subsection (a) with respect to any imported tax23 able product shall be the applicable amount under section 

24 4692 per ton on the lesser of— 


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1 ‘‘(1) the taxable carbon substances used in the 

2 manufacture or production of such product, or 

3 ‘‘(2) the carbon dioxide emissions attributable 

4 to the manufacture or production of such product. 

5 ‘‘(c) PROCEDURE TO CHALLENGE INFORMATION

6 PROVIDED BY IMPORTER.—The Secretary shall establish 

7 a procedure under which interested persons may examine 

8 the information provided by an importer for purposes of 

9 this section, and bring to the attention of the Secretary 

10 any suspected errors in such information. 

11 ‘‘SEC. 4696. IMPORTED TAXABLE PRODUCT. 

12 ‘‘(a) IN GENERAL.—For purposes of this part, the 

13 term ‘imported taxable product’ means any article which, 

14 at the time of such article’s sale or use by the importer, 

15 is described in the same heading of the Harmonized Tariff 

16 Schedule of the United States as a like article produced 

17 in a listed industry. 

18 ‘‘(b) LISTED INDUSTRY.—For purposes of this sec19 tion— 

20 ‘‘(1) IN GENERAL.—Except as provided in para21 graph (2), the term ‘listed industry’ means any in22 dustry listed by the Administrator as being among 

23 the industries which, in the aggregate, account for 

24 95 percent of the taxable carbon substances used in 

25 the United States. An industry may not be omitted 


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1 from the list under the preceding sentence if it uses 

2 more taxable carbon substances per unit of output 

3 than any industry which is so listed. 

4 ‘‘(2) SPECIAL RULE FOR 2010 THROUGH 2012.— 

5 ‘‘(A) 2010.—During 2010, the term ‘listed 

6 industry’ shall include only the 6 industries on 

7 the list under paragraph (1) having the highest 

8 average use of taxable carbon substances per 

9 unit of output. 

10 ‘‘(B) 2011 AND 2012.—During 2011 and 

11 2012, the term ‘listed industry’ shall include 

12 only— 

13 ‘‘(i) the industries described in sub14 paragraph (A), and 

‘‘(ii)(I) in the case of 2011, the 1 15 ⁄3 of 

16 the remaining industries on such list hav17 ing the highest average use of taxable car18 bon substances per unit of output, or 

‘‘(II) in the case of 2012, the 2 19 ⁄3 of 

20 the remaining industries on such list hav21 ing the highest average use of taxable car22 bon substances per unit of output. 

23 ‘‘(c) OTHER DEFINITIONS.—For purposes of this 

24 part, the terms ‘importer’, ‘taxable carbon substance’, and 


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1 ‘United States’ have the respective meanings given such 

2 terms by part II. 

3 ‘‘PART IV—SUPERMAJORITY REQUIRED TO 

4 CHANGE REVENUE NEUTRALITY 

5 ‘‘SEC. 4697. SUPERMAJORITY REQUIRED. 

6 ‘‘A bill, joint resolution, amendment to a bill or joint 

7 resolution, or conference report that increases aggregate 

8 revenues under parts II and III greater than the aggre9 gate reduction in revenues under part I may not be consid10 ered as passed or agreed to by the House of Representa11 tives or the Senate unless so determined by a vote of not 

12 less than two-thirds of the Members of the House of Rep13 resentatives or the Senate (as the case may be) voting, 

14 a quorum being present.’’. 

15 (b) CLERICAL AMENDMENT.—The table of sub16 chapters for chapter 38 of such Code is amended by add17 ing at the end the following new item: 

‘‘SUBCHAPTER F. REDUCTION OF SOCIAL SECURITY TAXES; TAX ON

COMBUSTIBLE FOSSIL FUELS’’. 

18 (c) EFFECTIVE DATE.—The amendments made by 

19 this section shall take effect on January 1, 2010. 

Æ 


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