I 

113TH CONGRESS 

1ST SESSION H. R. 880 

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

trading transactions. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 28, 2013 

Mr. DEFAZIO (for himself, Ms. SLAUGHTER, Ms. NORTON, Mr. SCOTT of Virginia, Mr. CAPUANO, Ms. PINGREE of Maine, Mr. MCGOVERN, Mr. CONYERS, Mr. HUFFMAN, Mr. GRIJALVA, Mr. WELCH, Ms. SCHAKOWSKY, 

Mrs. NAPOLITANO, Ms. EDWARDS, Mr. SARBANES, Mr. MICHAUD, Ms. 

BROWN of Florida, Mr. ELLISON, Ms. CHU, Ms. DELAURO, and Mr. 

BLUMENAUER) 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 impose 

a tax on certain trading transactions. 

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 ‘‘Wall Street Trading 

5 and Speculators Tax Act’’. 


tjames on DSK6SPTVN1PROD with BILLS
2 

•HR 880 IH

1 SEC. 2. TRANSACTION TAX. 

2 (a) IN GENERAL.—Chapter 36 of the Internal Rev3 enue Code of 1986 is amended by inserting after sub4 chapter B the following new subchapter: 

5 ‘‘Subchapter C—Tax on Trading Transactions 

‘‘Sec. 4475. Tax on trading transactions. 

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

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

8 a tax on each covered transaction with respect to any secu9 rity. 

10 ‘‘(b) RATE OF TAX.—The tax imposed under sub11 section (a) with respect to any covered transaction shall 

12 be 0.03 percent of the specified base amount with respect 

13 to such covered transaction. 

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

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

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

17 fair market value of the security (determined as of 

18 the time of the covered transaction), and 

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

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

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

22 section, the term ‘covered transaction’ means— 

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

24 purchase if— 


tjames on DSK6SPTVN1PROD with BILLS
3 

•HR 880 IH

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

2 a facility located in the United States, or 

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

4 States person, and 

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

6 described in subparagraph (D), (E), or (F) of sub7 section (e)(1), if— 

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

9 a facility located in the United States, or 

10 ‘‘(B) any party with rights under such se11 curity is a United States person. 

12 ‘‘(e) SECURITY AND OTHER DEFINITIONS.—For pur13 poses of this section— 

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

15 means— 

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

17 ‘‘(B) any partnership or beneficial owner18 ship interest in a partnership or trust, 

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

20 evidence of indebtedness, 

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

22 derivative financial instrument with respect to, 

23 any security or securities described in subpara24 graph (A), (B), or (C), 


tjames on DSK6SPTVN1PROD with BILLS
4 

•HR 880 IH

1 ‘‘(E) any derivative financial instrument 

2 with respect to any currency or commodity, and 

3 ‘‘(F) any notional principal contract. 

4 ‘‘(2) DERIVATIVE FINANCIAL INSTRUMENT.— 

5 The term ‘derivative financial instrument’ includes 

6 any option, forward contract, futures contract, or 

7 any similar financial instrument. 

8 ‘‘(3) NOTIONAL PRINCIPAL CONTRACT.—Except 

9 as otherwise provided by the Secretary, the term ‘no10 tional principal contract’ means any financial instru11 ment which requires two or more payments at speci12 fied intervals calculated by reference to a specified 

13 index upon one or more notional principal amounts. 

14 An amount shall not fail to be treated as a payment 

15 described in the preceding sentence merely because 

16 such amount is fixed on one date and paid or other17 wise taken into account on a different date. 

18 ‘‘(4) SPECIFIED INDEX.—The term ‘specified 

19 index’ means any 1 or more of any combination of— 

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

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

22 ‘‘(C) any index based on any objectively 

23 determinable information (including the occur24 rence or nonoccurrence of any event) which is 

25 not within the control of any of the parties to 


tjames on DSK6SPTVN1PROD with BILLS
5 

•HR 880 IH

1 the instrument and is not unique to any of the 

2 parties’ circumstances, and 

3 ‘‘(D) any other index as the Secretary may 

4 prescribe. 

5 ‘‘(5) TREATMENT OF EXCHANGES.— 

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

7 treated as the sale of the property transferred 

8 and a purchase of the property received by each 

9 party to the exchange. 

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

11 the case of a distribution treated as an ex12 change for stock under section 302 or 331, the 

13 corporation making such distribution shall be 

14 treated as having purchased such stock for pur15 poses of this section. 

16 ‘‘(f) EXCEPTIONS.— 

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

18 shall be imposed under subsection (a) on any cov19 ered transaction with respect to the initial issuance 

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

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

22 ‘‘(2) EXCEPTION FOR CERTAIN TRADED SHORT23 TERM INDEBTEDNESS.—A note, bond, debenture, or 

24 other evidence of indebtedness which— 


tjames on DSK6SPTVN1PROD with BILLS
6 

•HR 880 IH

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

2 in the United States, and 

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

4 than 100 days, 

5 shall not be treated as described in subsection 

6 (e)(1)(C). 

7 ‘‘(3) EXCEPTION FOR SECURITIES LENDING AR8 RANGEMENTS.—No tax shall be imposed under sub9 section (a) on any covered transaction with respect 

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

11 section 1058. 

12 ‘‘(g) BY WHOM PAID.— 

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

14 section shall be paid by— 

15 ‘‘(A) in the case of a transaction which oc16 curs or is cleared on a facility located in the 

17 United States, such facility, and 

18 ‘‘(B) in the case of a purchase not de19 scribed in subparagraph (A) which is executed 

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

21 which is a United States person, such broker. 

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

23 TRANSACTIONS.—In the case of any transaction to 

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

25 by this section shall be paid by— 


tjames on DSK6SPTVN1PROD with BILLS
7 

•HR 880 IH

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

2 in subsection (d)(1)— 

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

4 a United States person, and 

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

6 a United States person, and 

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

8 in subsection (d)(2)— 

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

10 States person, and 

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

12 United States person. 

13 ‘‘(h) CERTAIN PAYMENTS TREATED AS SEPARATE

14 TRANSACTIONS.—Except as otherwise provided by the 

15 Secretary, any payment with respect to a security de16 scribed in subparagraph (D), (E), or (F) of subsection 

17 (e)(1) shall be treated as a separate transaction for pur18 poses of this section, including— 

19 ‘‘(1) any net initial payment, net final or termi20 nating payment, or net periodical payment with re21 spect to a notional principal contract (or similar fi22 nancial instrument), 

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

24 contract (or similar financial instrument), and 


tjames on DSK6SPTVN1PROD with BILLS
8 

•HR 880 IH

1 ‘‘(3) any premium paid with respect to any op2 tion (or similar financial instrument). 

3 ‘‘(i) APPLICATION TO TRANSACTIONS BY CON4 TROLLED FOREIGN CORPORATIONS.— 

5 ‘‘(1) IN GENERAL.—For purposes of this sec6 tion, a controlled foreign corporation shall be treated 

7 as a United States person. 

8 ‘‘(2) SPECIAL RULES FOR PAYMENT OF TAX ON

9 DIRECT, ETC., TRANSACTIONS.—In the case of any 

10 transaction which is a covered transaction solely by 

11 reason of paragraph (1) and which is not described 

12 in subsection (g)(1)— 

13 ‘‘(A) PAYMENT BY UNITED STATES SHARE14 HOLDERS.—Any tax which would (but for this 

15 paragraph) be payable under subsection (g)(2) 

16 by the controlled foreign corporation shall, in 

17 lieu thereof, be paid by the United States 

18 shareholders of such controlled foreign corpora19 tion as provided in subparagraph (B). 

20 ‘‘(B) PRO RATA SHARES.—Each such 

21 United States shareholder shall pay the same 

22 proportion of such tax as— 

23 ‘‘(i) the stock which such United 

24 States shareholder owns (within the meanVerDate Mar 15 2010 23:32 Mar 01, 2013 Jkt 029200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H880.IH H880

tjames on DSK6SPTVN1PROD with BILLS
9 

•HR 880 IH

1 ing of section 958(a)) in such controlled 

2 foreign corporation, bears to 

3 ‘‘(ii) the stock so owned by all United 

4 States shareholders in such controlled for5 eign corporation. 

6 ‘‘(C) DEFINITIONS.—For purposes of this 

7 subsection, the terms ‘United States share8 holder’ and ‘controlled foreign corporation’ have 

9 the meanings given such terms in sections 

10 951(b) and 957(a), respectively. 

11 ‘‘(j) ADMINISTRATION.—The Secretary shall carry 

12 out this section in consultation with the Securities and Ex13 change Commission and the Commodity Futures Trading 

14 Commission. 

15 ‘‘(k) GUIDANCE; REGULATIONS.—The Secretary 

16 shall— 

17 ‘‘(1) provide guidance regarding such informa18 tion reporting concerning covered transactions as the 

19 Secretary deems appropriate, and 

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

21 or appropriate to prevent avoidance of the purposes 

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

23 States persons in such transactions.’’. 

24 (b) CREDIT WITH RESPECT TO CERTAIN TAX-FA25 VORED ACCOUNTS TO OFFSET TRANSACTION TAX.— 


tjames on DSK6SPTVN1PROD with BILLS
10 

•HR 880 IH

1 (1) IN GENERAL.—Subpart C of part IV of sub2 chapter A of chapter 1 of such Code is amended by 

3 inserting after section 36B the following new sec4 tion: 

5 ‘‘SEC. 36C. OFFSET FOR TRANSACTION TAX WITH RESPECT 

6 TO CERTAIN TAX-FAVORED ACCOUNTS. 

7 ‘‘(a) IN GENERAL.—There shall be allowed as a cred8 it against the tax imposed by this subtitle for the taxable 

9 year an amount equal to 0.03 percent of the qualified tax10 favored account contributions of the taxpayer for the tax11 able year. 

12 ‘‘(b) QUALIFIED TAX-FAVORED ACCOUNT CON13 TRIBUTIONS.—For purposes of this section, the term 

14 ‘qualified tax-favored account contributions’ means, with 

15 respect to any taxable year, the sum of— 

16 ‘‘(1) with respect to qualified retirement plans 

17 (as defined in section 4974(c)) of the taxpayer, the 

18 amount contributed to such plans for such taxable 

19 year to the extent that such contributions are allow20 able as a deduction or are excludable from gross in21 come (or, in the case of a Roth IRA (as defined in 

22 section 408A(b)), the amount contributed), 

23 ‘‘(2) with respect to Archer MSAs of the tax24 payer, the amount allowed as a deduction under sec25 tion 220 for such taxable year, 


tjames on DSK6SPTVN1PROD with BILLS
11 

•HR 880 IH

1 ‘‘(3) with respect to health savings accounts of 

2 the taxpayer, the amount allowed as a deduction 

3 under section 223 for such taxable year, plus 

4 ‘‘(4) with respect to qualified tuition programs 

5 (as defined in section 529) and Coverdell education 

6 savings accounts (as defined in section 530) with re7 spect to which the taxpayer is the designated bene8 ficiary (or, in the case of a designated beneficiary 

9 with respect to whom another taxpayer is allowed a 

10 deduction under section 151, such other taxpayer in 

11 lieu of such designated beneficiary), the amount con12 tributed for such taxable year.’’. 

13 (2) CONFORMING AMENDMENTS.— 

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

15 States Code, is amended by inserting ‘‘, 36C’’ 

16 after ‘‘36B’’. 

17 (B) The table of sections for subpart C of 

18 part IV of subchapter A of chapter 1 of the In19 ternal Revenue Code of 1986 is amended by in20 serting before the item relating to section 37 

21 the following new item: 

‘‘Sec. 36C. Offset for transaction tax on contributions to certain tax-favored accounts.’’. 

22 (c) INFORMATION REPORTING WITH RESPECT TO

23 CONTROLLED FOREIGN CORPORATIONS.—Subparagraph 

24 (B) of section 6038(a)(1) is amended by inserting ‘‘and 


tjames on DSK6SPTVN1PROD with BILLS
12 

•HR 880 IH

1 transactions which are covered transactions for purposes 

2 of section 4475 by reason of the application of section 

3 4475(i)(1) to such corporation’’ before the semicolon at 

4 the end. 

5 (d) CLERICAL AMENDMENT.—The table of sub6 chapters for chapter 36 of the Internal Revenue Code of 

7 1986 is amended by inserting after the item relating to 

8 subchapter B the following new item: 

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

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

10 this section shall apply to transactions after December 31, 

11 2013. 

Æ 


tjames on DSK6SPTVN1PROD with BILLS