I

103D CONGRESS

1ST SESSION H. R. 1157

To amend the Internal Revenue Code of 1986 to provide that the adjusted

gross income of an individual shall be adjusted to reflect the value

of such income relative to the cost-of-living in the area in which such

individual resides.

IN THE HOUSE OF REPRESENTATIVES

MARCH 1, 1993

Mr. LEVY 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

that the adjusted gross income of an individual shall

be adjusted to reflect the value of such income relative

to the cost-of-living in the area in which such individual

resides.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
2

•HR 1157 IH

1 SECTION 1. ADJUSTED GROSS INCOME ADJUSTED TO RE2 FLECT ITS VALUE RELATIVE TO COST-OF-LIV3 ING FOR THE AREA IN WHICH THE INDIVID4 UAL RESIDES.

5 (a) IN GENERAL.—Subsection (a) of section 62 of the

6 Internal Revenue Code of 1986 (defining adjusted gross

7 income) is amended by striking ‘‘gross income minus the

8 following deductions’’ and inserting ‘‘the product of the

9 excess of gross income over the following deductions and

10 the area cost-of-living multiplier (as defined in subsection

11 (d)) applicable to the taxpayer’’.

12 (b) COST-OF-LIVING MULTIPLIER.—Section 62 of

13 such Code is amended by adding at the end thereof the

14 following new subsection:

15 ‘‘(d) AREA COST-OF-LIVING MULTIPLIER.—

16 ‘‘(1) IN GENERAL.—The area cost-of-living mul17 tiplier applicable to any individual for any taxable

18 year is the cost-of-living multiplier prescribed by the

19 Secretary for the calendar year in which such tax20 able year begins which applies to the area which in21 cludes the taxpayer’s primary place of abode during

22 such taxable year.

23 ‘‘(2) DETERMINATION OF MULTIPLIERS.—

24 ‘‘(A) IN GENERAL.—Not later than De25 cember 15 of each calendar year, the Secretary

26 shall prescribe a cost-of-living multiplier for
3

•HR 1157 IH

1 each area of the United States which shall

2 apply to taxable years beginning during the suc3 ceeding calendar year.

4 ‘‘(B) METHOD OF DETERMINING MULTI5 PLIERS.—The Secretary shall determine the

6 cost-of-living multiplier for any area for any

7 calendar year by dividing—

8 ‘‘(i) the average cost-of-living for the

9 United States for the preceding calendar

10 year, by

11 ‘‘(ii) the cost-of-living for such area

12 for such preceding calendar year.

13 ‘‘(C) COST-OF-LIVING FOR AREA.—The

14 Secretary shall determine the cost-of-living for

15 an area for a calendar year using an average of

16 retail market prices for such area for the 12-

17 month period ending on August 31 of such cal18 endar year. The retail market prices taken into

19 account under the preceding sentence shall be

20 selected and used under the same methodology

21 as is used by the Bureau of Labor Statistics in

22 developing the Consumer Price Index for All

23 Urban Consumers.
4

•HR 1157 IH

1 ‘‘(3) AREAS OUTSIDE THE UNITED STATES.—

2 The area cost-of-living multiplier for any area out3 side the United States shall be 1.’’

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

5 this section shall apply to taxable years beginning after

6 lll.

Æ