I 

111TH CONGRESS 

1ST SESSION H. R. 4191 

To amend the Internal Revenue Code of 1986 to impose a tax on certain 

securities transactions to fund job creation and deficit reduction. 

IN THE HOUSE OF REPRESENTATIVES 

DECEMBER 3, 2009 

Mr. DEFAZIO (for himself, Mr. ARCURI, Mr. PERLMUTTER, Mr. BRALEY of 

Iowa, Ms. SUTTON, Mr. FILNER, Mr. PERRIELLO, Mr. WELCH, Mr. 

HARE, Mr. KAGEN, Mr. RYAN of Ohio, Mr. HASTINGS of Florida, Ms. 

SCHAKOWSKY, Mr. DAVIS of Tennessee, Ms. HIRONO, Mr. RAHALL, Mr. 

STARK, Mr. CUMMINGS, Mr. JOHNSON of Georgia, Mr. GRIJALVA, Ms. 

EDWARDS of Maryland, Ms. SHEA-PORTER, Ms. KAPTUR, Mr. HINCHEY, 

Ms. SLAUGHTER, and Mr. SARBANES) introduced the following bill; which 

was referred to the Committee on Ways and Means, and in addition to 

the Committees on Rules and the Budget, for a period to be subsequently 

determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend the Internal Revenue Code of 1986 to impose 

a tax on certain securities transactions to fund job creation and deficit reduction. 

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 ‘‘Let Wall Street Pay 

5 for the Restoration of Main Street Act of 2009’’. 


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1 SEC. 2. FINDINGS. 

2 Congress finds the following: 

3 (1) Our Nation continues to be hamstrung by 

4 a recession that led to the current jobless recovery 

5 and record deficits. 

6 (2) The unemployment rate is now 10.2 percent 

7 and most economists expect it to climb higher. 

8 (3) The Federal deficit has reached 

9 $1,400,000,000,000 for 2009. 

10 (4) The jobless recovery suggests that the Fed11 eral Government must continue to prime the econ12 omy, but the record deficit is a real obstacle. 

13 (5) Following their $700,000,000,000 bailout, 

14 Wall Street is now enjoying a resurgence in profits 

15 and bonuses. 

16 (6) A robust economy needs more than Wall 

17 Street profits. Main Street America is strengthened 

18 by good paying jobs for all Americans, not just Wall 

19 Street bankers. 

20 (7) To restore Main Street America, a small se21 curities transaction tax on Wall Street should be in22 vested in job creation for Main Street America. 

23 (8) A securities transaction tax on Wall Street 

24 has a negligible impact on the average investor and 

25 pension funds. 


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1 (9) This transfer tax would be assessed on the 

2 sale and purchase of financial instruments such as 

3 stocks, options, and futures. A quarter percent (0.25 

4 percent) tax on financial transactions could raise ap5 proximately $150,000,000,000 a year. 

6 (10) The United States had a transfer tax from 

7 1914 to 1966. The Revenue Act of 1914 (Act of 

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

9 percent tax on all sales or transfers of stock. In 

10 1932, Congress more than doubled the tax to help 

11 financial recovery and job creation during the Great 

12 Depression. 

13 (11) Half the revenue generated by this trans14 action tax will be used to directly reduce the deficit. 

15 (12) Half of the revenue generated by this 

16 transaction tax will deposited in a Job Creation Re17 serve to fund the creation of good paying jobs and 

18 put Americans back to work rebuilding our Nation. 

19 SEC. 3. JOB CREATION RESERVE FOR INVESTMENTS IN 

20 MIDDLE CLASS JOBS. 

21 (a) IN GENERAL.—For budgetary purposes, half the 

22 additional Federal receipts by reason of the enactment of 

23 this Act shall be held in a separate account to be known 

24 as the ‘‘Job Creation Reserve’’. The Job Creation Reserve 

25 shall be available to offset the additional costs from the 


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1 Surface Transportation Authorization Act of 2009 and 

2 subsequent legislation to fund job creation in the United 

3 States provided that the subsequent legislation— 

4 (1) promotes jobs that pay at least the median 

5 wage of the United States; 

6 (2) promotes manufacturing and other jobs we 

7 are losing to unfair overseas competition; and 

8 (3) prohibits any recipient of the Troubled 

9 Asset Relief Program from directly benefitting from 

10 any funds in this reserve. 

11 (b) PROCEDURE FOR ADJUSTMENTS.— 

12 (1) BUDGET COMMITTEE CHAIRMAN.—After the 

13 reporting of a bill or joint resolution, or the offering 

14 of an amendment thereto or the submission of a con15 ference report thereon, providing funding for the 

16 purposes set forth in subsection (a) in excess of the 

17 amounts provided for those purposes for fiscal year 

18 2010, the chairman of the Committee on the Budget 

19 of the applicable House of Congress shall make the 

20 adjustments set forth in paragraph (2) for the 

21 amount of new budget authority and outlays in that 

22 measure and the outlays flowing from that budget 

23 authority. 


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1 (2) MATTERS TO BE ADJUSTED.—The adjust2 ments referred to in paragraph (1) are to be made 

3 to— 

4 (A) the discretionary spending limits, if 

5 any, set forth in the appropriate concurrent res6 olution on the budget; 

7 (B) the allocations made pursuant to the 

8 appropriate concurrent resolution on the budget 

9 pursuant to section 302(a) of the Congressional 

10 Budget Act of 1974; and 

11 (C) the budget aggregates contained in the 

12 appropriate concurrent resolution on the budget 

13 as required by section 301(a) of the Congres14 sional Budget Act of 1974. 

15 (3) AMOUNTS OF ADJUSTMENTS.—The adjust16 ments referred to in paragraphs (1) and (2) shall 

17 not exceed half the receipts estimated by the Con18 gressional Budget Office that are attributable to this 

19 Act for the fiscal year in which the adjustments are 

20 made. 

21 SEC. 4. DEFICIT REDUCTION. 

22 It is the Sense of Congress that half the additional 

23 Federal receipts by reason of the enactment of this Act 

24 shall not be expended and therefore reduce the Federal 

25 deficit. The Committee on the Budget shall clearly report 


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1 this deficit reduction in the committee report for the budg2 et resolution. 

3 SEC. 5. RECOUPMENT OF WALL STREET BAILOUT. 

4 (a) IN GENERAL.—Chapter 36 of the Internal Rev5 enue Code of 1986 is amended by inserting after sub6 chapter B the following new subchapter: 

7 ‘‘Subchapter C—Tax on Securities 

8 Transactions 

‘‘Sec. 4475. Tax on securities transactions. 

9 ‘‘SEC. 4475. TAX ON SECURITIES TRANSACTIONS. 

10 ‘‘(a) IMPOSITION OF TAX.— 

11 ‘‘(1) STOCKS.—There is hereby imposed a tax 

12 on each covered transaction in a stock contract of 

13 0.25 percent of the value of the instruments involved 

14 in such transaction. 

15 ‘‘(2) FUTURES.—There is hereby imposed a tax 

16 on each covered transaction in a futures contract of 

17 0.02 percent of the value of the instruments involved 

18 in such transaction. 

19 ‘‘(3) SWAPS.—There is hereby imposed a tax on 

20 each covered transaction in a swaps contract of 0.02 

21 percent of the value of the instruments involved in 

22 such transaction. 

23 ‘‘(4) CREDIT DEFAULT SWAPS.—There is here24 by imposed a tax on each covered transaction in a 


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1 credit default swaps contract of 0.02 percent of the 

2 value of the instruments involved in such trans3 action. 

4 ‘‘(5) OPTIONS.—There is hereby imposed a tax 

5 on each covered transaction in an options contract 

6 with respect to a transaction described in paragraph 

7 (1), (2), (3), or (4) of— 

8 ‘‘(A) the rate imposed with respect to such 

9 underlying transaction under paragraph (1), 

10 (2), (3), or (4) (as the case may be), multiplied 

11 by 

12 ‘‘(B) the premium paid on such option. 

13 ‘‘(b) EXCEPTION FOR RETIREMENT ACCOUNTS, 

14 ETC.—No tax shall be imposed under subsection (a) with 

15 respect to any stock contract, futures contract, swaps con16 tract, credit default swap, or options contract which is 

17 held in any plan, account, or arrangement described in 

18 section 220, 223, 401(a), 403(a), 403(b), 408, 408A, 529, 

19 or 530. 

20 ‘‘(c) EXCEPTION FOR INTERESTS IN MUTUAL

21 FUNDS.—No tax shall be imposed under subsection (a) 

22 with respect to the purchase or sale of any interest in a 

23 regulated investment company (as defined in section 851) 

24 or of any derivative of such an interest. 

25 ‘‘(d) BY WHOM PAID.— 


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

2 section shall be paid by— 

3 ‘‘(A) in the case of a transaction which oc4 curs on a trading facility located in the United 

5 States, such trading facility, or 

6 ‘‘(B) in any other case, the purchaser with 

7 respect to the transaction. 

8 ‘‘(2) WITHHOLDING IF BUYER IS NOT A

9 UNITED STATES PERSON.—See section 1447 for 

10 withholding by seller if buyer is a foreign person. 

11 ‘‘(e) COVERED TRANSACTION.—The term ‘covered 

12 transaction’ means any purchase or sale if— 

13 ‘‘(1) such purchase or sale occurs on a trading 

14 facility located in the United States, or 

15 ‘‘(2) the purchaser or seller is a United States 

16 person. 

17 ‘‘(f) ADMINISTRATION.—The Secretary shall carry 

18 out this section in consultation with the Securities and Ex19 change Commission and the Commodity Futures Trading 

20 Commission.’’. 

21 (b) CREDIT FOR FIRST $100,000 OF STOCK TRANS22 ACTIONS PER YEAR.—Subpart C of part IV of subchapter 

23 A of chapter 1 of such Code is amended by inserting after 

24 section 36A the following new section: 


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1 ‘‘SEC. 36B. CREDIT FOR SECURITIES TRANSACTION TAXES. 

2 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of any 

3 purchaser with respect to a covered transaction, there 

4 shall be allowed as a credit against the tax imposed by 

5 this subtitle for the taxable year an amount equal to the 

6 lesser of— 

7 ‘‘(1) the aggregate amount of tax imposed 

8 under section 4475 on covered transactions during 

9 the taxable year with respect to which the taxpayer 

10 is the purchaser, or 

11 ‘‘(2) $250 ($500 in the case of a joint return). 

12 ‘‘(b) AGGREGATION RULE.—For purposes of this sec13 tion, all persons treated as a single employer under sub14 section (a) or (b) of section 52, or subsection (m) or (o) 

15 of section 414, shall be treated as one taxpayer. 

16 ‘‘(c) DEFINITIONS.—For purposes of this section, 

17 any term used in this section which is also used in section 

18 4475 shall have the same meaning as when used in section 

19 4475.’’. 

20 (c) WITHHOLDING.—Subchapter A of chapter 3 of 

21 such Code is amended by adding at the end the following 

22 new section: 

23 ‘‘SEC. 1447. WITHHOLDING ON SECURITIES TRANSACTIONS. 

24 ‘‘(a) IN GENERAL.—In the case of any outbound se25 curities transaction, the transferor shall deduct and withVerDate Nov 24 2008 00:40 Dec 04, 2009 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H4191.IH H4191

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1 hold a tax equal to the tax imposed under section 4475 

2 with respect to such transaction. 

3 ‘‘(b) OUTBOUND SECURITIES TRANSACTION.—For 

4 purposes of this section, the term ‘outbound securities 

5 transaction’ means any covered transaction to which sec6 tion 4475(a) applies if— 

7 ‘‘(1) such transaction does not occur on a trad8 ing facility located in the United States, and 

9 ‘‘(2) the purchaser with respect to such trans10 action in not a United States person.’’. 

11 (d) CONFORMING AMENDMENTS.— 

12 (1) Section 6211(b)(4)(A) of such Code is 

13 amended by inserting ‘‘36B,’’ after ‘‘36A,’’. 

14 (2) Section 1324(b)(2) of title 31, United 

15 States Code, is amended by inserting ‘‘36B,’’ after 

16 ‘‘36A,’’. 

17 (3) The table of subchapters for chapter 36 of 

18 the Internal Revenue Code of 1986 is amended by 

19 inserting after the item relating to subchapter B the 

20 following new item: 

‘‘Subchapter C. Tax on securities transactions.’’. 

21 (4) The table of sections for subchapter A of 

22 chapter 3 of such Code is amended by adding at the 

23 end the following new item: 

‘‘Sec. 1447. Withholding on securities transactions.’’. 


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1 (5) The table of sections for subpart C of part 

2 IV of subchapter A of chapter 1 of such Code is 

3 amended by inserting after the item relating to sec4 tion 36A the following new item: 

‘‘Sec. 36B. Credit for securities transaction taxes.’’. 

5 (e) EFFECTIVE DATE.—The amendments made by 

6 this section shall apply to transactions occurring more 

7 than 180 days after the date of the enactment of this Act. 

Æ 


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