II 

Calendar No. 238 

112TH CONGRESS 

1ST SESSION S. 1917 

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 

NOVEMBER 28, 2011 

Mr. CASEY (for himself, Mr. MENENDEZ, Mr. BROWN of Ohio, Ms. STABENOW, Mr. REID, Mr. SCHUMER, Mr. BLUMENTHAL, Mr. DURBIN, Mr. 

LAUTENBERG, Mr. LEAHY, and Mr. WHITEHOUSE) introduced the following bill; which was read the first time 

NOVEMBER 29, 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 TITLE I—PAYROLL TAX RELIEF 

2 SEC. 101. TEMPORARY PAYROLL TAX CUT FOR EMPLOYERS, 

3 EMPLOYEES AND THE SELF-EMPLOYED. 

4 (a) WAGES.—Notwithstanding any other provision of 

5 law— 

6 (1) with respect to remuneration received dur7 ing the payroll tax holiday period, the rate of tax 

8 under 3101(a) of the Internal Revenue Code of 1986 

9 shall be 3.1 percent (including for purposes of deter10 mining the applicable percentage under sections 

11 3201(a) and 3211(a) of such Code), and 

12 (2) with respect to remuneration paid during 

13 the payroll tax holiday period, the rate of tax under 

14 3111(a) of such Code shall be 3.1 percent (including 

15 for purposes of determining the applicable percent16 age under sections 3221(a) and 3211(a) of such 

17 Code). 

18 (3) Subsection (a)(2) shall only apply to— 

19 (A) employees performing services in a 

20 trade or business of a qualified employer, or 

21 (B) in the case of a qualified employer ex22 empt from tax under section 501(a), in further23 ance of the activities related to the purpose or 

24 function constituting the basis of the employer’s 

25 exemption under section 501. 


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1 (4) Subsection (a)(2) shall apply only to the 

2 first $5 million of remuneration or compensation 

3 paid by a qualified employer subject to section 

4 3111(a) or a corresponding amount of compensation 

5 subject to 3221(a). 

6 (b) SELF-EMPLOYMENT TAXES.— 

7 (1) IN GENERAL.—Notwithstanding any other 

8 provision of law, with respect to any taxable year 

9 which begins in the payroll tax holiday period, the 

10 rate of tax under section 1401(a) of the Internal 

11 Revenue Code of 1986 shall be— 

12 (A) 6.2 percent on the portion of net earn13 ings from self-employment subject to 1401(a) 

14 during the payroll tax period that does not ex15 ceed the amount of the excess of $5 million over 

16 total remuneration, if any, subject to section 

17 3111(a) paid during the payroll tax holiday pe18 riod to employees of the self-employed person, 

19 and 

20 (B) 9.3 percent for any portion of net 

21 earnings from self-employment not subject to 

22 subsection (b)(1)(A). 

23 (2) COORDINATION WITH DEDUCTIONS FOR EM24 PLOYMENT TAXES.—For purposes of the Internal 


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1 Revenue Code of 1986, in the case of any taxable 

2 year which begins in the payroll tax holiday period— 

3 (A) DEDUCTION IN COMPUTING NET EARN4 INGS FROM SELF-EMPLOYMENT.—The deduc5 tion allowed under section 1402(a)(12) of such 

6 Code shall be the sum of (i) 4.55 percent times 

7 the amount of the taxpayer’s net earnings from 

8 self-employment for the taxable year subject to 

9 paragraph (b)(1)(A) of this section, plus (ii) 

10 7.65 percent of the taxpayer’s net earnings 

11 from self-employment in excess of that amount. 

12 (B) INDIVIDUAL DEDUCTION.—The deduc13 tion under section 164(f) of such Code shall be 

14 equal to the sum of (i) one-half of the taxes im15 posed by section 1401 (after the application of 

16 this section) with respect to the taxpayer’s net 

17 earnings from self-employment for the taxable 

18 year subject to paragraph (b)(1)(A) of this sec19 tion plus (ii) 62.7 percent of the taxes imposed 

20 by section 1401 (after the application of this 

21 section) with respect to the excess. 

22 (c) REGULATORY AUTHORITY.—The Secretary may 

23 prescribe any such regulations or other guidance necessary 

24 or appropriate to carry out this section, including the allo25 cation of the excess of $5 million over total remuneration 


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1 subject to section 3111(a) paid during the payroll tax holi2 day period among related taxpayers treated as a single 

3 qualified employer. 

4 (d) DEFINITIONS.— 

5 (1) PAYROLL TAX HOLIDAY PERIOD.—The term 

6 ‘‘payroll tax holiday period’’ means calendar year 

7 2012. 

8 (2) QUALIFIED EMPLOYER.—For purposes of 

9 this paragraph, 

10 (A) IN GENERAL.—The term ‘‘qualified 

11 employer’’ means any employer other than the 

12 United States, any State or possession of the 

13 United States, or any political subdivision 

14 thereof, or any instrumentality of the foregoing. 

15 (B) TREATMENT OF EMPLOYEES OF POST16 SECONDARY EDUCATIONAL INSTITUTIONS.— 

17 Notwithstanding paragraph (A), the term 

18 ‘‘qualified employer’’ includes any employer 

19 which is a public institution of higher education 

20 (as defined in section 101 of the Higher Edu21 cation Act of 1965). 

22 (3) AGGREGATION RULES.—For purposes of 

23 this subsection rules similar to sections 414(b), 

24 414(c), 414(m) and 414(o) shall apply to determine 

25 when multiple entities shall be treated as a single 


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1 employer, and rules with respect to predecessor and 

2 successor employers may be applied, in such manner 

3 as may be prescribed by the Secretary. 

4 (e) TRANSFERS OF FUNDS.— 

5 (1) TRANSFERS TO FEDERAL OLD-AGE AND

6 SURVIVORS INSURANCE TRUST FUND.—There are 

7 hereby appropriated to the Federal Old-Age and 

8 Survivors Trust Fund and the Federal Disability In9 surance Trust Fund established under section 201 

10 of the Social Security Act (42 U.S.C. 401) amounts 

11 equal to the reduction in revenues to the Treasury 

12 by reason of the application of subsections (a) and 

13 (b) to employers other than those described in 

14 (e)(2). Amounts appropriated by the preceding sen15 tence shall be transferred from the general fund at 

16 such times and in such manner as to replicate to the 

17 extent possible the transfers which would have oc18 curred to such Trust Fund had such amendments 

19 not been enacted. 

20 (2) TRANSFERS TO SOCIAL SECURITY EQUIVA21 LENT BENEFIT ACCOUNT.—There are hereby appro22 priated to the Social Security Equivalent Benefit Ac23 count established under section 15A(a) of the Rail24 road Retirement Act of 1974 (45 U.S.C. 231n–1(a)) 

25 amounts equal to the reduction in revenues to the 


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1 Treasury by reason of the application of subsection 

2 (a) to employers subject to the Railroad Retirement 

3 Tax. Amounts appropriated by the preceding sen4 tence shall be transferred from the general fund at 

5 such times and in such manner as to replicate to the 

6 extent possible the transfers which would have oc7 curred to such Account had such amendments not 

8 been enacted. 

9 (f) COORDINATION WITH OTHER FEDERAL LAWS.— 

10 For purposes of applying any provision of Federal law 

11 other than the provisions of the Internal Revenue Code 

12 of 1986, the rate of tax in effect under section 3101(a) 

13 of such Code shall be determined without regard to the 

14 reduction in such rate under this section. 

15 SEC. 102. TEMPORARY TAX CREDIT FOR INCREASED PAY16 ROLL. 

17 (a) IN GENERAL.—Notwithstanding any other provi18 sion of law, each qualified employer shall be allowed, with 

19 respect to wages for services performed for such qualified 

20 employer, a payroll increase credit determined as follows: 

21 (1) With respect to the period from October 1, 

22 2011 through December 31, 2011, 6.2 percent of 

23 the excess, if any, (but not more than $12.5 million 

24 of the excess) of the wages subject to tax under sec25 tion 3111(a) of the Internal Revenue Code of 1986 


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1 for such period over such wages for the cor2 responding period of 2010. 

3 (2) With respect to the period from January 1, 

4 2012 through December 31, 2012, 

5 (A) 6.2 percent of the excess, if any, (but 

6 not more than $50 million of the excess) of the 

7 wages subject to tax under section 3111(a) of 

8 the Internal Revenue Code of 1986 for such pe9 riod over such wages for calendar year 2011, 

10 minus 

11 (B) 3.1 percent of the excess (if any) of— 

12 (i) the lesser of $5,000,000 or such 

13 wages for calendar year 2012, over 

14 (ii) such wages for calendar year 

15 2011. 

16 (3) In the case of a qualified employer for 

17 which the wages subject to tax under section 

18 3111(a) of the Internal Revenue Code of 1986 (a) 

19 were zero for the corresponding period of 2010 re20 ferred to in subsection (a)(1), the amount of such 

21 wages shall be deemed to be 80 percent of the 

22 amount of wages taken into account for the period 

23 from October 1, 2011 through December 31, 2011 

24 and (b) were zero for the calendar year 2011 re25 ferred to in subsection (a)(2), then the amount of 


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1 such wages shall be deemed to be 80 percent of the 

2 amount of wages taken into account for 2012. 

3 (4) This subsection (a) shall only apply with re4 spect to the wages of employees performing services 

5 in a trade or business of a qualified employer or, in 

6 the case of a qualified employer exempt from tax 

7 under section 501(a) of the Internal Revenue Code 

8 of 1986, in furtherance of the activities related to 

9 the purpose or function constituting the basis of the 

10 employer’s exemption under section 501. 

11 (b) QUALIFIED EMPLOYERS.—For purposes of this 

12 section— 

13 (1) IN GENERAL.—The term ‘‘qualified em14 ployer’’ means any employer other than the United 

15 States, any State or possession of the United States, 

16 or any political subdivision thereof, or any instru17 mentality of the foregoing. 

18 (2) TREATMENT OF EMPLOYEES OF POST-SEC19 ONDARY EDUCATIONAL INSTITUTIONS.—Notwith20 standing subparagraph (1), the term ‘‘qualified em21 ployer’’ includes any employer which is a public in22 stitution of higher education (as defined in section 

23 101 of the Higher Education Act of 1965). 

24 (c) AGGREGATION RULES.—For purposes of this sub25 section rules similar to sections 414(b), 414(c), 414(m) 


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1 and 414(o) of the Internal Revenue Code of 1986 shall 

2 apply to determine when multiple entities shall be treated 

3 as a single employer, and rules with respect to predecessor 

4 and successor employers may be applied, in such manner 

5 as may be prescribed by the Secretary. 

6 (d) APPLICATION OF CREDITS.—The payroll increase 

7 credit shall be treated as a credit allowable under Subtitle 

8 C of the Internal Revenue Code of 1986 under rules pre9 scribed by the Secretary of the Treasury, provided that 

10 the amount so treated for the period described in sub11 section (a)(1) or subsection (a)(2) shall not exceed the 

12 amount of tax imposed on the qualified employer under 

13 section 3111(a) of such Code for the relevant period. Any 

14 income tax deduction by a qualified employer for amounts 

15 paid under section 3111(a) of such Code or similar Rail16 road Retirement Tax provisions shall be reduced by the 

17 amounts so credited. 

18 (e) TRANSFERS TO FEDERAL OLD-AGE AND SUR19 VIVORS INSURANCE TRUST FUND.—There are hereby ap20 propriated to the Federal Old-Age and Survivors Trust 

21 Fund and the Federal Disability Insurance Trust Fund 

22 established under section 201 of the Social Security Act 

23 (42 U.S.C. 401) amounts equal to the reduction in reve24 nues to the Treasury by reason of the amendments made 

25 by subsection (d). Amounts appropriated by the preceding 


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1 sentence shall be transferred from the general fund at 

2 such times and in such manner as to replicate to the ex3 tent possible the transfers which would have occurred to 

4 such Trust Fund had such amendments not been enacted. 

5 (f) APPLICATION TO RAILROAD RETIREMENT

6 TAXES.—For purposes of qualified employers that are em7 ployers under section 3231(a) of the Internal Revenue 

8 Code of 1986, subsections (a)(1) and (a)(2) of this section 

9 shall apply by substituting section 3221 for section 3111, 

10 and substituting the term ‘‘compensation’’ for ‘‘wages’’ as 

11 appropriate. 

12 TITLE II—SURTAX ON 

13 MILLIONAIRES 

14 SEC. 201. SURTAX ON MILLIONAIRES. 

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

16 Internal Revenue Code of 1986 is amended by adding at 

17 the end the following new part: 

18 ‘‘PART VIII—SURTAX ON MILLIONAIRES 

‘‘Sec. 59B. Surtax on millionaires. 

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

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

21 other than a corporation for any taxable year beginning 

22 after 2012, there is hereby imposed (in addition to any 

23 other tax imposed by this subtitle) a tax equal to 3.25 

24 percent of so much of the modified adjusted gross income 


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1 of the taxpayer for such taxable year as exceeds 

2 $1,000,000 ($500,000, in the case of a married individual 

3 filing a separate return). 

4 ‘‘(b) INFLATION ADJUSTMENT.— 

5 ‘‘(1) IN GENERAL.—In the case of any taxable 

6 year beginning after 2013, each dollar amount under 

7 subsection (a) shall be increased by an amount equal 

8 to— 

9 ‘‘(A) such dollar amount, multiplied by 

10 ‘‘(B) the cost-of-living adjustment deter11 mined under section 1(f)(3) for the calendar 

12 year in which the taxable year begins, deter13 mined by substituting ‘calendar year 2011’ for 

14 ‘calendar year 1992’ in subparagraph (B) 

15 thereof. 

16 ‘‘(2) ROUNDING.—If any amount as adjusted 

17 under paragraph (1) is not a multiple of $10,000, 

18 such amount shall be rounded to the next highest 

19 multiple of $10,000. 

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

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

22 income’ means adjusted gross income reduced by any de23 duction (not taken into account in determining adjusted 

24 gross income) allowed for investment interest (as defined 

25 in section 163(d)). In the case of an estate or trust, adVerDate Mar 15 2010 00:23 Nov 30, 2011 Jkt 099200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S1917.PCS S1917

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1 justed gross income shall be determined as provided in sec2 tion 67(e). 

3 ‘‘(d) SPECIAL RULES.— 

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

5 nonresident alien individual, only amounts taken 

6 into account in connection with the tax imposed 

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

8 under this section. 

9 ‘‘(2) CITIZENS AND RESIDENTS LIVING

10 ABROAD.—The dollar amount in effect under sub11 section (a) shall be decreased by the excess of— 

12 ‘‘(A) the amounts excluded from the tax13 payer’s gross income under section 911, over 

14 ‘‘(B) the amounts of any deductions or ex15 clusions disallowed under section 911(d)(6) 

16 with respect to the amounts described in sub17 paragraph (A). 

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

19 shall not apply to a trust all the unexpired interests 

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

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

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

23 CHAPTER FOR CERTAIN PURPOSES.—The tax im24 posed under this section shall not be treated as tax 

25 imposed by this chapter for purposes of determining 


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1 the amount of any credit under this chapter or for 

2 purposes of section 55.’’. 

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

4 subchapter A of chapter 1 of the Internal Revenue Code 

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

6 new item: 

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

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

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

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

10 Revenue Code of 1986. 

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

12 this section shall apply to taxable years beginning after 

13 December 31, 2012. 


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Calendar No. 238 

112TH CONGRESS 

1ST SESSION S. 1917 

A BILL 

To create jobs by providing payroll tax relief for 

other purposes. middle class families and businesses, and for 

NOVEMBER 29, 2011 

Read the second time and placed on the calendar 


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