I 

115TH CONGRESS 

1ST SESSION H. R. 1144 

To impose a tax on certain trading transactions to invest in our families 

and communities, improve our infrastructure and our environment, 

strengthen our financial security, expand opportunity and reduce market 

volatility. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 16, 2017 

Mr. ELLISON (for himself, Mr. GRIJALVA, Mr. POCAN, Mr. BLUMENAUER, Ms. 

CLARK of Massachusetts, Mr. CONYERS, Ms. EDDIE BERNICE JOHNSON

of Texas, Ms. LEE, Mr. TED LIEU of California, Mr. LOWENTHAL, Mr. 

MCGOVERN, Mr. NOLAN, Ms. NORTON, Ms. ROYBAL-ALLARD, Mr. SARBANES, Ms. SCHAKOWSKY, Ms. SLAUGHTER, and Mr. TAKANO) introduced the following bill; which was referred to the Committee on Ways 

and Means 

A BILL 

To impose a tax on certain trading transactions to invest 

in our families and communities, improve our infrastructure and our environment, strengthen our financial security, expand opportunity and reduce market volatility. 

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 ‘‘Inclusive Prosperity 

5 Act of 2017’’. 


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1 SEC. 2. FINDINGS. 

2 Congress finds the following: 

3 (1) The global financial crisis cost Americans 

4 $19 trillion in lost wealth. 

5 (2) The global financial crisis was caused by fi6 nancial firms taking great financial risks without 

7 disclosing those risks to their investors or their regu8 lators and by regulatory failures to adequately police 

9 the financial services markets for crime, unfair or 

10 deceptive practices, fraud, lack of transparency, and 

11 mismanagement. 

12 (3) Deceptive, illegal, and speculative financial 

13 practices have harmed public confidence in the integ14 rity and fairness of many United States financial in15 stitutions and threaten the basic strengths of the 

16 United States economic system. 

17 (4) American citizens provided the money to 

18 stabilize the financial sector, making $600 billion 

19 available to 800 financial institutions, automakers, 

20 and insurance companies. 

21 (5) The global financial crisis, along with the 

22 wars, unabated and unaddressed climate change, 

23 unsustainable tax cuts, and a continuing unemploy24 ment crisis, if unaddressed, will deprive a generation 

25 of a meaningful role in the larger economy. 


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1 (6) Nurses, teachers, public safety officers, and 

2 other public sector workers have faced drastic fund3 ing cuts, harming our long-term public safety and 

4 prospects for economic growth. 

5 (7) Extreme weather events rooted in climate 

6 change, including flood, drought, fire, super storms 

7 like Sandy, as well as ‘‘slow-onset’’ events like sea 

8 level rise, are wreaking havoc in the United States 

9 and across the globe resulting in climate change im10 pacts that jeopardize the lives and livelihoods of 

11 Americans, causing large-scale food and energy inse12 curity in developing countries, and extolling untold 

13 economic costs. 

14 (8) According to economists, a small tax on 

15 transfer of ownership of every financial trade could 

16 generate hundreds of billions annually in revenue, 

17 which when invested could help create sufficient jobs 

18 in both the public and private sectors to replace the 

19 8 million jobs lost in the recent recession and add 

20 even more jobs on an ongoing basis, as well as pro21 vide urgently needed funding for programs to com22 bat climate change and address global health and 

23 development issues. 

24 (9) A transactions tax will help limit high fre25 quency trading which may be as high as 70 percent 


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1 of the market and results in declining market sta2 bility through extreme price volatility, distorted mar3 ket prices, and structural vulnerability to speculation 

4 far in excess of the liquidity needs of commercial 

5 hedgers. 

6 (10) A securities transfer tax would have a neg7 ligible impact on the average investor. 

8 (11) The United States had a transfer tax from 

9 1914 to 1966: The Revenue Act of 1914 (Act of 

10 Oct. 22, 1914 (ch. 331, 38 Stat. 745)) levied a 0.2 

11 percent tax on all sales or transfers of stock which 

12 was doubled in 1932 to help overcome the budgetary 

13 challenges during the Great Depression. 

14 (12) Forty nations have or have had some form 

15 of a financial transactions tax; it is endorsed by 

16 more than 1,000 economists; and 11 European 

17 countries are moving forward on implementing a co18 ordinated financial transactions tax after European 

19 Union finance ministers signaled approval in Janu20 ary 2013. 

21 (13) Revenue generated by this tax will be 

22 available to— 

23 (A) strengthen financial security and ex24 pand opportunity for low- and moderate-income 

25 families, including strengthening the social safeVerDate Sep 11 2014 18:47 Feb 24, 2017 Jkt 069200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H1144.IH H1144

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1 ty net and expanding resources for child care, 

2 Social Security, and savings incentives; and 

3 (B) expand resources for State and Fed4 eral investments that protect our health and en5 vironment, investing in water and wastewater 

6 infrastructure, rebuild our crumbling physical 

7 infrastructure, and create good paying jobs 

8 by— 

9 (i) expanding and improving Medicare 

10 and Medicaid; 

11 (ii) investing in education, student 

12 debt relief, job training, public sector jobs, 

13 and green jobs; 

14 (iii) providing housing assistance to 

15 low-income households; 

16 (iv) investing in transportation includ17 ing public mass transit and an infrastruc18 ture bank that promotes environmentally 

19 responsible domestic manufacturing and 

20 construction industries; and 

21 (v) protecting our environment and 

22 building a clean energy economy, including 

23 efforts to combat climate change and build 

24 resilience to its effects in the United States 

25 and in developing countries; and 


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1 (C) fund international sustainable pros2 perity programs such as health care invest3 ments, AIDS treatment, research and preven4 tion programs, climate change adaptation and 

5 mitigation efforts by developing countries, and 

6 international assistance. 

7 SEC. 3. TRANSACTION TAX. 

8 (a) IN GENERAL.—Chapter 36 of the Internal Rev9 enue Code of 1986 is amended by inserting after sub10 chapter B the following new subchapter: 

11 ‘‘Subchapter C—Tax on Trading Transactions 

‘‘Sec. 4475. Tax on trading transactions. 

12 ‘‘SEC. 4475. TAX ON TRADING TRANSACTIONS. 

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

14 a tax on the transfer of ownership in each covered trans15 action with respect to any security. 

16 ‘‘(b) RATE OF TAX.—The tax imposed under sub17 section (a) with respect to any covered transaction shall 

18 be the applicable percentage of the specified base amount 

19 with respect to such covered transaction. The applicable 

20 percentage shall be— 

21 ‘‘(1) 0.5 percent in the case of a security de22 scribed in subparagraph (A) or (B) of subsection 

23 (e)(1), 


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1 ‘‘(2) 0.10 percent in the case of a security de2 scribed in subparagraph (C) of subsection (e)(1), 

3 and 

4 ‘‘(3) 0.005 percent in the case of a security de5 scribed in subparagraph (D), (E), or (F) of sub6 section (e)(1). 

7 ‘‘(c) SPECIFIED BASE AMOUNT.—For purposes of 

8 this section, the term ‘specified base amount’ means— 

9 ‘‘(1) except as provided in paragraph (2), the 

10 fair market value of the security (determined as of 

11 the time of the covered transaction), and 

12 ‘‘(2) in the case of any payment described in 

13 subsection (h), the amount of such payment. 

14 ‘‘(d) COVERED TRANSACTION.—For purposes of this 

15 section, the term ‘covered transaction’ means— 

16 ‘‘(1) except as provided in paragraph (2), any 

17 purchase if— 

18 ‘‘(A) such purchase occurs or is cleared on 

19 a facility located in the United States, or 

20 ‘‘(B) the purchaser or seller is a United 

21 States person, and 

22 ‘‘(2) any transaction with respect to a security 

23 described in subparagraph (D), (E), or (F) of sub24 section (e)(1), if— 


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1 ‘‘(A) such security is traded or cleared on 

2 a facility located in the United States, or 

3 ‘‘(B) any party with rights under such se4 curity is a United States person. 

5 ‘‘(e) SECURITY AND OTHER DEFINITIONS.—For pur6 poses of this section— 

7 ‘‘(1) IN GENERAL.—The term ‘security’ 

8 means— 

9 ‘‘(A) any share of stock in a corporation, 

10 ‘‘(B) any partnership or beneficial owner11 ship interest in a partnership or trust, 

12 ‘‘(C) any note, bond, debenture, or other 

13 evidence of indebtedness, other than a State or 

14 local bond the interest of which is excluded 

15 from gross income under section 103(a), 

16 ‘‘(D) any evidence of an interest in, or a 

17 derivative financial instrument with respect to, 

18 any security or securities described in subpara19 graph (A), (B), or (C), 

20 ‘‘(E) any derivative financial instrument 

21 with respect to any currency or commodity in22 cluding notional principal contracts, and 

23 ‘‘(F) any other derivative financial instru24 ment any payment with respect to which is cal25 culated by reference to any specified index. 


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1 ‘‘(2) DERIVATIVE FINANCIAL INSTRUMENT.— 

2 The term ‘derivative financial instrument’ includes 

3 any option, forward contract, futures contract, no4 tional principal contract, or any similar financial in5 strument. 

6 ‘‘(3) SPECIFIED INDEX.—The term ‘specified 

7 index’ means any one or more of any combination 

8 of— 

9 ‘‘(A) a fixed rate, price, or amount, or 

10 ‘‘(B) a variable rate, price, or amount, 

11 which is based on any current objectively deter12 minable information which is not within the 

13 control of any of the parties to the contract or 

14 instrument and is not unique to any of the par15 ties’ circumstances. 

16 ‘‘(4) TREATMENT OF EXCHANGES.— 

17 ‘‘(A) IN GENERAL.—An exchange shall be 

18 treated as the sale of the property transferred 

19 and a purchase of the property received by each 

20 party to the exchange. 

21 ‘‘(B) CERTAIN DEEMED EXCHANGES.—In 

22 the case of a distribution treated as an ex23 change for stock under section 302 or 331, the 

24 corporation making such distribution shall be 


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1 treated as having purchased such stock for pur2 poses of this section. 

3 ‘‘(f) EXCEPTIONS.— 

4 ‘‘(1) EXCEPTION FOR INITIAL ISSUES.—No tax 

5 shall be imposed under subsection (a) on any cov6 ered transaction with respect to the initial issuance 

7 of any security described in subparagraph (A), (B), 

8 or (C) of subsection (e)(1). 

9 ‘‘(2) EXCEPTION FOR CERTAIN TRADED SHORT10 TERM INDEBTEDNESS.—A note, bond, debenture, or 

11 other evidence of indebtedness which— 

12 ‘‘(A) is traded on a trading facility located 

13 in the United States, and 

14 ‘‘(B) has a fixed maturity of not more 

15 than 60 days, 

16 shall not be treated as described in subsection 

17 (e)(1)(C). 

18 ‘‘(3) EXCEPTION FOR SECURITIES LENDING AR19 RANGEMENTS.—No tax shall be imposed under sub20 section (a) on any covered transaction with respect 

21 to which gain or loss is not recognized by reason of 

22 section 1058. 

23 ‘‘(g) BY WHOM PAID.— 

24 ‘‘(1) IN GENERAL.—The tax imposed by this 

25 section shall be paid by— 


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1 ‘‘(A) in the case of a transaction which oc2 curs or is cleared on a facility located in the 

3 United States, such facility, and 

4 ‘‘(B) in the case of a purchase not de5 scribed in subparagraph (A) which is executed 

6 by a broker (as defined in section 6045(c)(1)), 

7 the broker. 

8 ‘‘(2) SPECIAL RULES FOR DIRECT, ETC., 

9 TRANSACTIONS.—In the case of any transaction to 

10 which paragraph (1) does not apply, the tax imposed 

11 by this section shall be paid by— 

12 ‘‘(A) in the case of a transaction described 

13 in subsection (d)(1)— 

14 ‘‘(i) the purchaser if the purchaser is 

15 a United States person, and 

16 ‘‘(ii) the seller if the purchaser is not 

17 a United States person, and 

18 ‘‘(B) in the case of a transaction described 

19 in subsection (d)(2)— 

20 ‘‘(i) the payor if the payor is a United 

21 States person, and 

22 ‘‘(ii) the payee if the payor is not a 

23 United States person. 

24 ‘‘(h) CERTAIN PAYMENTS TREATED AS SEPARATE

25 TRANSACTIONS.—Except as otherwise provided by the 


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1 Secretary, any payment with respect to a security de2 scribed in subparagraph (D), (E), or (F) of subsection 

3 (e)(1) shall be treated as a separate transaction for pur4 poses of this section, including— 

5 ‘‘(1) any net initial payment, net final or termi6 nating payment, or net periodical payment with re7 spect to a notional principal contract (or similar fi8 nancial instrument), 

9 ‘‘(2) any payment with respect to any forward 

10 contract (or similar financial instrument), and 

11 ‘‘(3) any premium paid with respect to any op12 tion (or similar financial instrument). 

13 ‘‘(i) ADMINISTRATION.—The Secretary shall carry 

14 out this section in consultation with the Securities and Ex15 change Commission and the Commodity Futures Trading 

16 Commission. 

17 ‘‘(j) GUIDANCE; REGULATIONS.—The Secretary 

18 shall— 

19 ‘‘(1) provide guidance regarding such informa20 tion reporting concerning covered transactions as the 

21 Secretary deems appropriate, including reporting by 

22 the payor of the tax in cases where the payor is not 

23 the purchaser, and 

24 ‘‘(2) prescribe such regulations as are necessary 

25 or appropriate to prevent avoidance of the purposes 


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1 of this section, including the use of non-United 

2 States persons in such transactions. 

3 ‘‘(k) WHISTLEBLOWERS.—See section 7623 for pro4 visions relating to whistleblowers.’’. 

5 (b) PENALTY FOR FAILURE TO INCLUDE COVERED

6 TRANSACTION INFORMATION WITH RETURN.—Part I of 

7 subchapter B of chapter 68 of the Internal Revenue Code 

8 of 1986 is amended by inserting after section 6707A the 

9 following new section: 

10 ‘‘SEC. 6707B. PENALTY FOR FAILURE TO INCLUDE COV11 ERED TRANSACTION INFORMATION WITH RE12 TURN. 

13 ‘‘(a) IMPOSITION OF PENALTY.—Any person who 

14 fails to include on any return or statement any informa15 tion with respect to a covered transaction which is re16 quired pursuant to section 4475(j)(1) to be included with 

17 such return or statement shall pay a penalty in the 

18 amount determined under subsection (b). 

19 ‘‘(b) AMOUNT OF PENALTY.—Except as otherwise 

20 provided in this subsection, the amount of the penalty 

21 under subsection (a) with respect to any covered trans22 action shall be determined by the Secretary. 

23 ‘‘(c) COVERED TRANSACTION.—For purposes of this 

24 section, the term ‘covered transaction’ has the meaning 

25 given such term by section 4475(d). 


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1 ‘‘(d) AUTHORITY TO RESCIND PENALTY.— 

2 ‘‘(1) IN GENERAL.—The Commissioner of In3 ternal Revenue may rescind all or any portion of any 

4 penalty imposed by this section with respect to any 

5 violation if rescinding the penalty would promote 

6 compliance with the requirements of this title and 

7 effective tax administration. 

8 ‘‘(2) NO JUDICIAL APPEAL.—Notwithstanding 

9 any other provision of law, any determination under 

10 this subsection may not be reviewed in any judicial 

11 proceeding. 

12 ‘‘(3) RECORDS.—If a penalty is rescinded under 

13 paragraph (1), the Commissioner shall place in the 

14 file in the Office of the Commissioner the opinion of 

15 the Commissioner with respect to the determination, 

16 including— 

17 ‘‘(A) a statement of the facts and cir18 cumstances relating to the violation, 

19 ‘‘(B) the reasons for the rescission, and 

20 ‘‘(C) the amount of the penalty rescinded. 

21 ‘‘(e) COORDINATION WITH OTHER PENALTIES.—The 

22 penalty imposed by this section shall be in addition to any 

23 other penalty imposed by this title.’’. 

24 (c) CLERICAL AMENDMENTS.— 


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1 (1) The table of sections for part I of sub2 chapter B of chapter 68 of such Code is amended 

3 by inserting after item relating to section 6707A the 

4 following new item: 

‘‘Sec. 6707B. Penalty for failure to include covered transaction information 

with return.’’. 

5 (2) The table of subchapters for chapter 36 of 

6 the Internal Revenue Code of 1986 is amended by 

7 inserting after the item relating to subchapter B the 

8 following new item: 

‘‘SUBCHAPTER C. TAX ON TRADING TRANSACTIONS’’. 

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

10 this section shall apply to transactions after December 31, 

11 2017. 

12 SEC. 4. OFFSETTING CREDIT FOR FINANCIAL TRANS13 ACTION TAX. 

14 (a) IN GENERAL.—Subpart A of part IV of sub15 chapter A of chapter 1 of the Internal Revenue Code of 

16 1986 (relating to nonrefundable personal credits) is 

17 amended by inserting after section 25D the following new 

18 section: 

19 ‘‘SEC. 25E. FINANCIAL TRANSACTION TAX PAYMENTS. 

20 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in21 dividual, there shall be allowed as a credit against the tax 

22 imposed by this chapter for the taxable year an amount 


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1 equal to the tax paid during the taxable year under section 

2 4475. 

3 ‘‘(b) LIMITATION BASED ON MODIFIED ADJUSTED

4 GROSS INCOME.— 

5 ‘‘(1) IN GENERAL.—Subsection (a) shall not 

6 apply to a taxpayer for the taxable year if the modi7 fied adjusted gross income of the taxpayer for the 

8 taxable year exceeds $50,000 ($75,000 in the case 

9 of a joint return and one-half of such amount in the 

10 case of a married individual filing a separate re11 turn). 

12 ‘‘(2) MODIFIED ADJUSTED GROSS INCOME.— 

13 For purposes of paragraph (1), the term ‘modified 

14 adjusted gross income’ means adjusted gross in15 come— 

16 ‘‘(A) determined without regard to sections 

17 86, 893, 911, 931, and 933, and 

18 ‘‘(B) increased by the amount of interest 

19 received or accrued by the taxpayer during the 

20 taxable year which is exempt from tax. 

21 ‘‘(3) INFLATION ADJUSTMENT.— 

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

23 taxable year beginning after 2016, each dollar 

24 amount referred to in paragraph (1) shall be in25 creased by an amount equal to— 


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

2 ‘‘(ii) the cost-of-living adjustment de3 termined under section (1)(f)(3) of the In4 ternal Revenue Code of 1986 for the cal5 endar year in which the taxable year be6 gins, by substituting ‘2017’ for ‘1992’. 

7 ‘‘(B) ROUNDING.—If any amount as ad8 justed under clause (i) is not a multiple of $50, 

9 such amount shall be rounded to the nearest 

10 multiple of $50. 

11 ‘‘(c) ELIGIBLE INDIVIDUAL.— 

12 ‘‘(1) IN GENERAL.—The term ‘eligible indi13 vidual’ means, with respect to any taxable year, an 

14 individual who— 

15 ‘‘(A) has attained the age of 18 as of the 

16 last day of such taxable year, and 

17 ‘‘(B) is a citizen or lawful permanent resi18 dent (within the meaning of section 7701(b)(6)) 

19 as of the last day of such taxable year. 

20 ‘‘(2) CERTAIN INDIVIDUALS NOT ELIGIBLE.— 

21 For purposes of paragraph (1), an individual de22 scribed in any of the following provisions of this title 

23 for the preceding taxable year shall not be treated 

24 as an eligible individual for the taxable year: 


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1 ‘‘(A) An individual who is a student (as 

2 defined in section 152(f)(2)) for the taxable 

3 year or the immediately preceding taxable year. 

4 ‘‘(B) An individual who is a taxpayer de5 scribed in subsection (c), (d), or (e) of section 

6 6402 for the immediately preceding taxable 

7 year. 

8 ‘‘(C) A married individual who files a sepa9 rate return for the taxable year.’’. 

10 (b) CLERICAL AMENDMENT.—The table of sections 

11 for subpart A of part IV of subchapter A of chapter 1 

12 of such Code is amended by inserting after the item relat13 ing to section 25D the following new item: 

‘‘Sec. 25E. Financial transaction tax payments.’’. 

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

15 this section shall apply to taxable years beginning after 

16 December 31, 2017. 

Æ 


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