II 

112TH CONGRESS 

2D SESSION S. 2059 

To reduce the deficit by imposing a minimum effective tax rate for highincome taxpayers. 

IN THE SENATE OF THE UNITED STATES 

FEBRUARY 1, 2012 

Mr. WHITEHOUSE (for himself, Mr. AKAKA, Mr. BEGICH, Mr. LEAHY, Mr. 

HARKIN, Mr. BLUMENTHAL, Mr. SANDERS, Mr. SCHUMER, and Mr. 

REED) introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL 

To reduce the deficit by imposing a minimum effective tax 

rate for high-income taxpayers. 

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 ‘‘Paying a Fair Share 

5 Act of 2012’’. 

6 SEC. 2. FAIR SHARE TAX ON HIGH-INCOME TAXPAYERS. 

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

8 Internal Revenue Code of 1986 is amended by adding at 

9 the end the following new part: 


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1 ‘‘PART VII—FAIR SHARE TAX ON HIGH-INCOME 

2 TAXPAYERS 

‘‘Sec. 59B. Fair share tax. 

3 ‘‘SEC. 59B. FAIR SHARE TAX. 

4 ‘‘(a) GENERAL RULE.— 

5 ‘‘(1) PHASE-IN OF TAX.—In the case of any 

6 high-income taxpayer, there is hereby imposed for a 

7 taxable year (in addition to any other tax imposed 

8 by this subtitle) a tax equal to the product of— 

9 ‘‘(A) the amount determined under para10 graph (2), and 

11 ‘‘(B) a fraction (not to exceed 1)— 

12 ‘‘(i) the numerator of which is the ex13 cess of— 

14 ‘‘(I) the taxpayer’s adjusted 

15 gross income, over 

16 ‘‘(II) the dollar amount in effect 

17 under subsection (c)(1), and 

18 ‘‘(ii) the denominator of which is the 

19 dollar amount in effect under subsection 

20 (c)(1). 

21 ‘‘(2) AMOUNT OF TAX.—The amount of tax de22 termined under this paragraph is an amount equal 

23 to the excess (if any) of— 

24 ‘‘(A) the tentative fair share tax for the 

25 taxable year, over 


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1 ‘‘(B) the excess of— 

2 ‘‘(i) the sum of— 

3 ‘‘(I) the regular tax liability (as 

4 defined in section 26(b)) for the tax5 able year, 

6 ‘‘(II) the tax imposed by section 

7 55 for the taxable year, plus 

8 ‘‘(III) the payroll tax for the tax9 able year, over 

10 ‘‘(ii) the credits allowable under part 

11 IV of subchapter A (other than sections 

12 27(a), 31, and 34). 

13 ‘‘(b) TENTATIVE FAIR SHARE TAX.—For purposes 

14 of this section— 

15 ‘‘(1) IN GENERAL.—The tentative fair share tax 

16 for the taxable year is 30 percent of the excess of— 

17 ‘‘(A) the adjusted gross income of the tax18 payer, over 

19 ‘‘(B) the modified charitable contribution 

20 deduction for the taxable year. 

21 ‘‘(2) MODIFIED CHARITABLE CONTRIBUTION

22 DEDUCTION.—For purposes of paragraph (1)— 

23 ‘‘(A) IN GENERAL.—The modified chari24 table contribution deduction for any taxable 

25 year is an amount equal to the amount which 


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1 bears the same ratio to the deduction allowable 

2 under section 170 (section 642(c) in the case of 

3 a trust or estate) for such taxable year as— 

4 ‘‘(i) the amount of itemized deduc5 tions allowable under the regular tax (as 

6 defined in section 55) for such taxable 

7 year, determined after the application of 

8 section 68, bears to 

9 ‘‘(ii) such amount, determined before 

10 the application of section 68. 

11 ‘‘(B) TAXPAYER MUST ITEMIZE.—In the 

12 case of any individual who does not elect to 

13 itemize deductions for the taxable year, the 

14 modified charitable contribution deduction shall 

15 be zero. 

16 ‘‘(c) HIGH-INCOME TAXPAYER.—For purposes of this 

17 section— 

18 ‘‘(1) IN GENERAL.—The term ‘high-income tax19 payer’ means, with respect to any taxable year, any 

20 taxpayer (other than a corporation) with an adjusted 

21 gross income for such taxable year in excess of 

22 $1,000,000 (50 percent of such amount in the case 

23 of a married individual who files a separate return). 

24 ‘‘(2) INFLATION ADJUSTMENT.— 


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1 ‘‘(A) IN GENERAL.—In the case of a tax2 able year beginning after 2013, the $1,000,000 

3 amount under paragraph (1) shall be increased 

4 by an amount equal to— 

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

6 ‘‘(ii) the cost-of-living adjustment de7 termined under section 1(f)(3) for the cal8 endar year in which the taxable year be9 gins, determined by substituting ‘calendar 

10 year 2012’ for ‘calendar year 1992’ in sub11 paragraph (B) thereof. 

12 ‘‘(B) ROUNDING.—If any amount as ad13 justed under subparagraph (A) is not a multiple 

14 of $10,000, such amount shall be rounded to 

15 the next lowest multiple of $10,000. 

16 ‘‘(d) PAYROLL TAX.—For purposes of this section, 

17 the payroll tax for any taxable year is an amount equal 

18 to the excess of— 

19 ‘‘(1) the taxes imposed on the taxpayer under 

20 sections 1401, 1411, 3101, 3201, and 3211(a) (to 

21 the extent such taxes are attributable to the rate of 

22 tax in effect under section 3101) with respect to 

23 such taxable year or wages or compensation received 

24 during the taxable year, over 


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1 ‘‘(2) the deduction allowable under section 

2 164(f) for such taxable year. 

3 ‘‘(e) SPECIAL RULE FOR ESTATES AND TRUSTS.— 

4 For purposes of this section, in the case of an estate or 

5 trust, adjusted gross income shall be computed in the 

6 manner described in section 67(e). 

7 ‘‘(f) NOT TREATED AS TAX IMPOSED BY THIS CHAP8 TER FOR CERTAIN PURPOSES.—The tax imposed under 

9 this section shall not be treated as tax imposed by this 

10 chapter for purposes of determining the amount of any 

11 credit under this chapter (other than the credit allowed 

12 under section 27(a)) or for purposes of section 55.’’. 

13 (b) CONFORMING AMENDMENT.—Section 26(b)(2) of 

14 the Internal Revenue Code of 1986 is amended by redesig15 nating subparagraphs (C) through (X) as subparagraphs 

16 (D) through (Y), respectively, and by inserting after sub17 paragraph (B) the following new subparagraph: 

18 ‘‘(C) section 59B (relating to fair share 

19 tax),’’. 

20 (c) CLERICAL AMENDMENT.—The table of parts for 

21 subchapter A of chapter 1 of the Internal Revenue Code 

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

23 new item: 

‘‘PART VII—FAIR SHARE TAX ON HIGH-INCOME TAXPAYERS’’. 


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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, 2012. 

4 SEC. 3. SENSE OF THE SENATE REGARDING TAX REFORM. 

5 It is the sense of the Senate that— 

6 (1) Congress should enact tax reform that re7 peals unfair and unnecessary tax loopholes and ex8 penditures, simplifies the system for millions of tax9 payers and businesses (including by eliminating the 

10 alternative minimum tax for middle-class Ameri11 cans), and makes sure that the wealthiest taxpayers 

12 pay a fair share; and 

13 (2) this Act is an interim step that can be done 

14 quickly and serve as a floor on taxes for the highest15 income taxpayers, cut the deficit by billions of dol16 lars a year, and help encourage more fundamental 

17 reform of the tax system. 

Æ 


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