II 

Calendar No. 251 

112TH CONGRESS 

1ST SESSION S. 1944 

To create jobs by providing payroll tax relief for middle class families and 

businesses, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

DECEMBER 5, 2011 

Mr. CASEY (for himself, Mr. REID, Mr. SCHUMER, and Mr. DURBIN) 

introduced the following bill; which was read the first time 

DECEMBER 6, 2011 

Read the second time and placed on the calendar 

A BILL 

To create jobs by providing payroll tax relief for middle 

class families and businesses, and for other purposes. 

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 ‘‘Middle Class Tax Cut 

5 Act of 2011’’. 


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1 SEC. 2. TEMPORARY EXTENSION AND EXPANSION OF EM2 PLOYEE PAYROLL TAX RELIEF. 

3 (a) EXTENSION.—Section 601(c) of the Tax Relief, 

4 Unemployment Insurance Reauthorization, and Job Cre5 ation Act of 2010 (26 U.S.C. 1401 note) is amended by 

6 striking ‘‘year 2011’’ and inserting ‘‘years 2011 and 

7 2012’’. 

8 (b) INCREASED RELIEF.— 

9 (1) IN GENERAL.—Subsection (a) of section 

10 601 of the Tax Relief, Unemployment Insurance Re11 authorization, and Job Creation Act of 2010 (26 

12 U.S.C. 1401 note) is amended— 

13 (A) by inserting ‘‘(9.3 percent for calendar 

14 year 2012)’’ after ‘‘10.40 percent’’ in para15 graph (1), and 

16 (B) in paragraph (2)— 

17 (i) by striking ‘‘(including’’ and in18 serting ‘‘(3.1 percent in the case of cal19 endar year 2012), including’’ after ‘‘4.2 

20 percent’’, and 

21 (ii) by striking ‘‘Code)’’ and inserting 

22 ‘‘Code’’. 

23 (2) COORDINATION WITH INDIVIDUAL DEDUC24 TION FOR EMPLOYMENT TAXES.—Subparagraph (A) 

25 of section 601(b)(2) of such Act is amended by inVerDate Mar 15 2010 22:50 Dec 06, 2011 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1944.PCS S1944

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1 serting ‘‘(66.67 percent for taxable years which 

2 begin in 2012)’’ after ‘‘59.6 percent’’. 

3 (c) TECHNICAL AMENDMENTS.—Paragraph (2) of 

4 section 601(b) of the Tax Relief, Unemployment Insur5 ance Reauthorization, and Job Creation Act of 2010 (26 

6 U.S.C. 1401 note) is amended— 

7 (1) by inserting ‘‘of such Code’’ after ‘‘164(f)’’, 

8 (2) by inserting ‘‘of such Code’’ after 

9 ‘‘1401(a)’’ in subparagraph (A), and 

10 (3) by inserting ‘‘of such Code’’ after 

11 ‘‘1401(b)’’ in subparagraph (B). 

12 SEC. 3. SURTAX ON MILLIONAIRES. 

13 (a) IN GENERAL.—Subchapter A of chapter 1 of the 

14 Internal Revenue Code of 1986 is amended by adding at 

15 the end the following new part: 

16 ‘‘PART VIII—SURTAX ON MILLIONAIRES 

‘‘Sec. 59B. Surtax on millionaires. 

17 ‘‘SEC. 59B. SURTAX ON MILLIONAIRES. 

18 ‘‘(a) GENERAL RULE.—In the case of a taxpayer 

19 other than a corporation for any taxable year beginning 

20 after 2012 and before 2022, there is hereby imposed (in 

21 addition to any other tax imposed by this subtitle) a tax 

22 equal to 1.9 percent of so much of the modified adjusted 

23 gross income of the taxpayer for such taxable year as ex24 ceeds the threshold amount. 


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1 ‘‘(b) THRESHOLD AMOUNT.—For purposes of this 

2 section— 

3 ‘‘(1) IN GENERAL.—The threshold amount is 

4 $1,000,000. 

5 ‘‘(2) INFLATION ADJUSTMENT.— 

6 ‘‘(A) IN GENERAL.—In the case of any 

7 taxable year beginning after 2013, the 

8 $1,000,000 amount under paragraph (1) shall 

9 be increased by an amount equal to— 

10 ‘‘(i) such dollar amount, multiplied by 

11 ‘‘(ii) the cost-of-living adjustment de12 termined under section 1(f)(3) for the cal13 endar year in which the taxable year be14 gins, determined by substituting ‘calendar 

15 year 2011’ for ‘calendar year 1992’ in sub16 paragraph (B) thereof. 

17 ‘‘(B) ROUNDING.—If any amount as ad18 justed under paragraph (1) is not a multiple of 

19 $10,000, such amount shall be rounded to the 

20 next highest multiple of $10,000. 

21 ‘‘(3) MARRIED FILING SEPARATELY.—In the 

22 case of a married individual filing separately for any 

23 taxable year, the threshold amount shall be one-half 

24 of the amount otherwise in effect under this sub25 section for the taxable year. 


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1 ‘‘(c) MODIFIED ADJUSTED GROSS INCOME.—For 

2 purposes of this section, the term ‘modified adjusted gross 

3 income’ means adjusted gross income reduced by any de4 duction (not taken into account in determining adjusted 

5 gross income) allowed for investment interest (as defined 

6 in section 163(d)). In the case of an estate or trust, ad7 justed gross income shall be determined as provided in sec8 tion 67(e). 

9 ‘‘(d) SPECIAL RULES.— 

10 ‘‘(1) NONRESIDENT ALIEN.—In the case of a 

11 nonresident alien individual, only amounts taken 

12 into account in connection with the tax imposed 

13 under section 871(b) shall be taken into account 

14 under this section. 

15 ‘‘(2) CITIZENS AND RESIDENTS LIVING

16 ABROAD.—The dollar amount in effect under sub17 section (a) shall be decreased by the excess of— 

18 ‘‘(A) the amounts excluded from the tax19 payer’s gross income under section 911, over 

20 ‘‘(B) the amounts of any deductions or ex21 clusions disallowed under section 911(d)(6) 

22 with respect to the amounts described in sub23 paragraph (A). 

24 ‘‘(3) CHARITABLE TRUSTS.—Subsection (a) 

25 shall not apply to a trust all the unexpired interests 


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1 in which are devoted to one or more of the purposes 

2 described in section 170(c)(2)(B). 

3 ‘‘(4) NOT TREATED AS TAX IMPOSED BY THIS

4 CHAPTER FOR CERTAIN PURPOSES.—The tax im5 posed under this section shall not be treated as tax 

6 imposed by this chapter for purposes of determining 

7 the amount of any credit under this chapter or for 

8 purposes of section 55.’’. 

9 (b) CLERICAL AMENDMENT.—The table of parts for 

10 subchapter A of chapter 1 of the Internal Revenue Code 

11 of 1986 is amended by adding at the end the following 

12 new item: 

‘‘PART VIII. SURTAX ON MILLIONAIRES.’’. 

13 (c) SECTION 15 NOT TO APPLY.—The amendment 

14 made by subsection (a) shall not be treated as a change 

15 in a rate of tax for purposes of section 15 of the Internal 

16 Revenue Code of 1986. 

17 (d) EFFECTIVE DATE.—The amendments made by 

18 this section shall apply to taxable years beginning after 

19 December 31, 2012. 

20 SEC. 4. UNWARRANTED UNEMPLOYMENT COMPENSATION. 

21 (a) IN GENERAL.—Subtitle E of the Internal Rev22 enue Code of 1986 is amended by adding at the end the 

23 following new chapter: 


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1 ‘‘CHAPTER 56—UNWARRANTED 

2 UNEMPLOYMENT COMPENSATION 

‘‘Sec. 5895. Unwarranted unemployment compensation. 

3 ‘‘SEC. 5895. UNWARRANTED UNEMPLOYMENT COMPENSA4 TION. 

5 ‘‘(a) IMPOSITION OF TAX.—There is hereby imposed 

6 on any taxpayer with adjusted gross income (as defined 

7 in section 62) for any taxable year of at least $1,000,000 

8 ($500,000, in the case of a married individual filing a sep9 arate return), a tax equal to 50 percent (55 percent in 

10 the case of a taxable year beginning in 2011 or 2012) of 

11 any unemployment compensation (as defined in section 

12 85(b)) received by such taxpayer in such taxable year. 

13 ‘‘(b) ADMINISTRATIVE PROVISIONS.—For purposes 

14 of the deficiency procedures of subtitle F, any tax imposed 

15 by this section shall be treated as a tax imposed by subtitle 

16 A.’’. 

17 (b) CLERICAL AMENDMENT.—The table of chapters 

18 for subtitle E of the Internal Revenue Code of 1986 is 

19 amended by adding at the end the following new item: 

‘‘CHAPTER 56—UNWARRANTED UNEMPLOYMENT COMPENSATION’’. 

20 (c) TAX NOT DEDUCTIBLE.—Section 275(a) of the 

21 Internal Revenue Code of 1986 is amended by inserting 

22 after paragraph (6) the following new paragraph: 

23 ‘‘(7) Tax imposed by section 5895.’’. 


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1 (d) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to taxable years beginning after 

3 December 31, 2010. 

4 SEC. 5. ENDING SUPPLEMENTAL NUTRITION ASSISTANCE 

5 PROGRAM BENEFITS FOR MILLIONAIRES. 

6 (a) IN GENERAL.—Section 6 of the Food and Nutri7 tion Act of 2008 (7 U.S.C. 2015) is amended by adding 

8 at the end the following: 

9 ‘‘(r) DISQUALIFICATION FOR RECEIPT OF ASSETS OF

10 AT LEAST $1,000,000.—Any household in which a mem11 ber receives income or assets with a fair market value of 

12 at least $1,000,000 shall, immediately on the receipt of 

13 the assets, become ineligible for further participation in 

14 the program until the date on which the household meets 

15 the income eligibility and allowable financial resources 

16 standards under section 5.’’. 

17 (b) CONFORMING AMENDMENTS.—Section 5(a) of 

18 the Food and Nutrition Act of 2008 (7 U.S.C. 2014(a)) 

19 is amended in the second sentence by striking ‘‘sections 

20 6(b), 6(d)(2), and 6(g)’’ and inserting ‘‘subsections (b), 

21 (d)(2), (g), and (r) of section 6’’. 

22 SEC. 6. GUARANTEE FEES. 

23 Subpart A of part 2 of subtitle A of title XIII of the 

24 Housing and Community Development Act of 1992 is 


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1 amended by adding after section 1326 (12 U.S.C. 4546) 

2 the following new section: 

3 ‘‘SEC. 1327. ENTERPRISE GUARANTEE FEES. 

4 ‘‘(a) DEFINITIONS.—For purposes of this section, the 

5 following definitions shall apply: 

6 ‘‘(1) GUARANTEE FEE.—The term ‘guarantee 

7 fee’— 

8 ‘‘(A) means a fee described in subsection 

9 (b); and 

10 ‘‘(B) includes— 

11 ‘‘(i) the guaranty fee charged by the 

12 Federal National Mortgage Association 

13 with respect to mortgage-backed securities; 

14 and 

15 ‘‘(ii) the management and guarantee 

16 fee charged by the Federal Home Loan 

17 Mortgage Corporation with respect to par18 ticipation certificates. 

19 ‘‘(2) AVERAGE FEES.—The term ‘average fees’ 

20 means the average contractual fee rate of single21 family guaranty arrangements by an enterprise en22 tered into during 2011, plus the recognition of any 

23 up-front cash payments over an estimated average 

24 life, expressed in terms of basis points. Such defini25 tion shall be interpreted in a manner consistent with 


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1 the annual report on guarantee fees by the Federal 

2 Housing Finance Agency. 

3 ‘‘(b) INCREASE.— 

4 ‘‘(1) IN GENERAL.— 

5 ‘‘(A) PHASED INCREASE REQUIRED.—Sub6 ject to subsection (c), the Director shall require 

7 each enterprise to charge a guarantee fee in 

8 connection with any guarantee of the timely 

9 payment of principal and interest on securities, 

10 notes, and other obligations based on or backed 

11 by mortgages on residential real properties de12 signed principally for occupancy of from 1 to 4 

13 families, consummated after the date of enact14 ment of this section. 

15 ‘‘(B) AMOUNT.—The amount of the in16 crease required under this section shall be de17 termined by the Director to appropriately re18 flect the risk of loss, as well the cost of capital 

19 allocated to similar assets held by other fully 

20 private regulated financial institutions, but such 

21 amount shall be not less than an average in22 crease of 12.5 basis points for each origination 

23 year or book year above the average fees im24 posed in 2011 for such guarantees. The Direc25 tor shall prohibit an enterprise from offsetting 


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1 the cost of the fee to mortgage originators, bor2 rowers, and investors by decreasing other 

3 charges, fees, or premiums, or in any other 

4 manner. 

5 ‘‘(2) AUTHORITY TO LIMIT OFFER OF GUAR6 ANTEE.—The Director shall prohibit an enterprise 

7 from consummating any offer for a guarantee to a 

8 lender for mortgage-backed securities, if— 

9 ‘‘(A) the guarantee is inconsistent with the 

10 requirements of this section; or 

11 ‘‘(B) the risk of loss is allowed to increase, 

12 through lowering of the underwriting standards 

13 or other means, for the primary purpose of 

14 meeting the requirements of this section. 

15 ‘‘(3) DEPOSIT IN TREASURY.—Amounts re16 ceived from fee increases imposed under this section 

17 shall be deposited directly into the United States 

18 Treasury, and shall be available only to the extent 

19 provided in subsequent appropriations Acts. The fees 

20 charged pursuant to this section shall not be consid21 ered a reimbursement to the Federal Government 

22 for the costs or subsidy provided to an enterprise. 

23 ‘‘(c) PHASE-IN.— 

24 ‘‘(1) IN GENERAL.—The Director may provide 

25 for compliance with subsection (b) by allowing each 


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1 enterprise to increase the guarantee fee charged by 

2 the enterprise gradually over the 2-year period be3 ginning on the date of enactment of this section, in 

4 a manner sufficient to comply with this section. In 

5 determining a schedule for such increases, the Direc6 tor shall— 

7 ‘‘(A) provide for uniform pricing among 

8 lenders; 

9 ‘‘(B) provide for adjustments in pricing 

10 based on risk levels; and 

11 ‘‘(C) take into consideration conditions in 

12 financial markets. 

13 ‘‘(2) RULE OF CONSTRUCTION.—Nothing in 

14 this subsection shall be interpreted to undermine the 

15 minimum increase required by subsection (b). 

16 ‘‘(d) INFORMATION COLLECTION AND ANNUAL

17 ANALYSIS.—The Director shall require each enterprise to 

18 provide to the Director, as part of its annual report sub19 mitted to Congress— 

20 ‘‘(1) a description of— 

21 ‘‘(A) changes made to up-front fees and 

22 annual fees as part of the guarantee fees nego23 tiated with lenders; 


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1 ‘‘(B) changes to the riskiness of the new 

2 borrowers compared to previous origination 

3 years or book years; and 

4 ‘‘(C) any adjustments required to improve 

5 for future origination years or book years, in 

6 order to be in complete compliance with sub7 section (b); and 

8 ‘‘(2) an assessment of how the changes in the 

9 guarantee fees described in paragraph (1) met the 

10 requirements of subsection (b). 

11 ‘‘(e) ENFORCEMENT.— 

12 ‘‘(1) REQUIRED ADJUSTMENTS.—Based on the 

13 information from subsection (d) and any other infor14 mation the Director deems necessary, the Director 

15 shall require an enterprise to make adjustments in 

16 its guarantee fee in order to be in compliance with 

17 subsection (b). 

18 ‘‘(2) NONCOMPLIANCE PENALTY.—An enter19 prise that has been found to be out of compliance 

20 with subsection (b) for any 2 consecutive years shall 

21 be precluded from providing any guarantee for a pe22 riod, determined by rule of the Director, but in no 

23 case less than 1 year. 

24 ‘‘(3) RULE OF CONSTRUCTION.—Nothing in 

25 this subsection shall be interpreted as preventing the 


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1 Director from initiating and implementing an en2 forcement action against an enterprise, at a time the 

3 Director deems necessary, under other existing en4 forcement authority. 

5 ‘‘(f) EXPIRATION.—The provisions of this section 

6 shall expire on October 1, 2021.’’. 


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Calendar No. 251 

112TH CONGRESS 

1ST SESSION S. 1944 

A BILL 

To create jobs by providing payroll tax relief for 

other purposes. middle class families and businesses, and for 

DECEMBER 6, 2011 

Read the second time and placed on the calendar 


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