II 

111TH CONGRESS 

1ST SESSION S. 2927 

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

securities transactions to fund job creation and deficit reduction, and 

for other purposes. 

IN THE SENATE OF THE UNITED STATES 

DECEMBER 23, 2009 

Mr. HARKIN (for himself, Mr. SANDERS, Mr. WHITEHOUSE, and Mr. BROWN) 

introduced the following bill; which was read twice and referred to the 

Committee on Finance 

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, and for other purposes. 

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 Fair Share 

5 Act’’. 

6 SEC. 2. TRANSACTION TAX. 

7 (a) IN GENERAL.—Chapter 36 of the Internal Rev8 enue Code of 1986 is amended by inserting after sub9 chapter B the following new subchapter: 


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1 ‘‘Subchapter C—Tax on Securities 

2 Transactions 

‘‘Sec. 4475. Tax on securities transactions. 

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

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

5 a tax on each covered transaction with respect to any secu6 rity. 

7 ‘‘(b) RATE OF TAX.— 

8 ‘‘(1) SECURITY.— 

9 ‘‘(A) IN GENERAL.—Except as otherwise 

10 provided in this subsection, the rate of such tax 

11 shall be equal to 0.25 percent of the fair mar12 ket value of the security. 

13 ‘‘(B) DERIVATIVES.—In the case of a secu14 rity described in subsection (d)(1)(D), the rate 

15 of such tax shall be equal to 0.25 percent of the 

16 fair market value of the underlying property 

17 with respect to, or the notional principal 

18 amount of, the derivative financial instrument 

19 involved in such transaction. 

20 ‘‘(C) SHORT-TERM DEBT INSTRUMENTS.— 

21 In the case of a covered transaction with re22 spect to a security described in subsection 

23 (d)(1)(C) which has a fixed maturity date not 

24 more than 1 year from the date of issue, the 


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1 rate of such tax shall be equal to 0.02 percent 

2 of the fair market value of such security. 

3 ‘‘(2) HEDGING TRANSACTION.—In the case of 

4 any covered transaction which is a hedging trans5 action (within the meaning of section 1221(a)(7)), 

6 subparagraphs (A) and (B) of paragraph (1) shall 

7 each be applied by substituting ‘0.02 percent’ for 

8 ‘0.25 percent’. 

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

10 section, the term ‘covered transaction’ means— 

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

12 purchase if— 

13 ‘‘(A) such purchase occurs on a trading fa14 cility located in the United States, or 

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

16 States person, or 

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

18 described in subsection (d)(1)(D), if any party with 

19 rights under such security is a United States person 

20 or if such transaction is facilitated by a United 

21 States person, including a trading facility located in 

22 the United States or a broker. 

23 ‘‘(d) SECURITY AND OTHER DEFINITIONS.—For pur24 poses of this section— 


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

2 means— 

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

4 ‘‘(B) any partnership or beneficial owner5 ship interest in a widely held or publicly traded 

6 partnership or trust, 

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

8 evidence of indebtedness issued by a nongovern9 mental entity the beneficial ownership of which 

10 is traded on an established market, or 

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

12 derivative financial instrument in— 

13 ‘‘(i) any security described in subpara14 graph (A), (B), or (C), 

15 ‘‘(ii) any specified index, or 

16 ‘‘(iii) any other note, bond, or deben17 ture issued by a nongovernmental entity. 

18 ‘‘(2) DERIVATIVE FINANCIAL INSTRUMENT.— 

19 The term ‘derivative financial instrument’ means 

20 any option, forward contract, short position, notional 

21 principal contract, credit default swap, or any simi22 lar financial instrument. 

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

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

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


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

2 which is based on any current objectively deter3 minable information which is not within the control 

4 of any of the parties to the contract or instrument 

5 and is not unique to any of the parties’ cir6 cumstances. 

7 ‘‘(e) EXCEPTIONS TO IMPOSITION OF TAX.— 

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

9 shall be imposed under subsection (a) on any cov10 ered transaction with respect to the initial issuance 

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

12 or (C) of subsection (d)(1). 

13 ‘‘(2) EXCEPTION FOR RETIREMENT ACCOUNTS, 

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

15 on any covered transaction with respect to any secu16 rity which is held in any plan, account, or arrange17 ment described in section 220, 223, 401(a), 403(a), 

18 403(b), 408, 408A, 529, or 530 (including assets 

19 held in a segregated asset account described in sec20 tion 817 as part of any such plan, account, or ar21 rangement). 

22 ‘‘(3) EXCEPTION FOR CERTAIN MUTUAL FUND

23 TRANSACTIONS.—No tax shall be imposed under 

24 subsection (a) on any covered transaction— 


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1 ‘‘(A) with respect to the purchase of any 

2 interest in a regulated investment company (as 

3 defined in section 851) which issues only stock 

4 which is redeemable on the demand of the stock 

5 holder, 

6 ‘‘(B) by a regulated investment company 

7 (as so defined) which is 100 percent owned by 

8 1 or more plans, accounts, or arrangements de9 scribed in paragraph (2), and 

10 ‘‘(C) to the extent such tax is properly al11 locable to any class of shares of a regulated in12 vestment company (as so defined) which is 100 

13 percent owned by 1 or more plans, accounts, or 

14 arrangements described in paragraph (2). 

15 ‘‘(f) BY WHOM PAID.— 

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

17 section shall be paid by— 

18 ‘‘(A) in the case of a transaction which oc19 curs on a trading facility located in the United 

20 States, such trading facility, 

21 ‘‘(B) in the case of a transaction not de22 scribed in subparagraph (A) which is executed 

23 by a broker, such broker, 

24 ‘‘(C) in the case of a transaction not de25 scribed in subparagraph (A) or (B), with reVerDate Nov 24 2008 02:17 Dec 24, 2009 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S2927.IS S2927

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1 spect to a security described in section 

2 (d)(1)(D), the party identified by the Secretary, 

3 or 

4 ‘‘(D) in any other case, the purchaser with 

5 respect to the transaction. 

6 ‘‘(2) WITHHOLDING IF PURCHASER IS NOT A

7 UNITED STATES PERSON.—See section 1447 for 

8 withholding by seller if purchaser is a foreign per9 son. 

10 ‘‘(g) ADMINISTRATION.—The Secretary shall carry 

11 out this section in consultation with the Securities and Ex12 change Commission and the Commodity Futures Trading 

13 Commission. 

14 ‘‘(h) GUIDANCE; REGULATIONS.—The Secretary 

15 shall— 

16 ‘‘(1) provide guidance regarding such informa17 tion reporting concerning covered transactions as the 

18 Secretary deems appropriate, and 

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

20 or appropriate to prevent avoidance of the purposes 

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

22 States persons in such transactions or the improper 

23 allocation of taxes to classes of shares described in 

24 subsection (e)(3)(C).’’. 


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1 (b) CREDIT FOR FIRST $100,000 OF STOCK TRANS2 ACTIONS PER YEAR.—Subpart C of part IV of subchapter 

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

4 section 36A the following new section: 

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

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

7 individual who is a purchaser with respect to a covered 

8 transaction, there shall be allowed as a credit against the 

9 tax imposed by this subtitle for the taxable year an 

10 amount equal to the lesser of— 

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

12 under section 4475 on covered transactions during 

13 the taxable year with respect to which the taxpayer 

14 is the purchaser, or 

15 ‘‘(2) $250 ($125 in the case of a married indi16 vidual filing a separate return). 

17 ‘‘(b) DEFINITIONS.—For purposes of this section, 

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

19 4475 shall have the same meaning as when used in section 

20 4475.’’. 

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

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

23 new section: 


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

2 ‘‘(a) IN GENERAL.—In the case of any outbound se3 curities transaction, except as provided in subsection (b), 

4 the transferor shall deduct and withhold a tax equal to 

5 the tax imposed under section 4475 with respect to such 

6 transaction. 

7 ‘‘(b) DERIVATIVES.—In the case of any outbound se8 curities transaction with respect to a security described 

9 in section 4475(d)(1)(D), the party identified by the Sec10 retary shall so deduct and withhold. 

11 ‘‘(c) OUTBOUND SECURITIES TRANSACTION.—For 

12 purposes of this section, the term ‘outbound securities 

13 transaction’ means any covered transaction to which sec14 tion 4475(a) applies if— 

15 ‘‘(1) such transaction does not occur on a trad16 ing facility located in the United States, and 

17 ‘‘(2) the purchaser with respect to such trans18 action in not a United States person.’’. 

19 (d) CONFORMING AMENDMENTS.— 

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

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

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

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

24 ‘‘36A,’’. 

25 (e) CLERICAL AMENDMENTS.— 


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1 (1) The table of subchapters for chapter 36 of 

2 the Internal Revenue Code of 1986 is amended by 

3 inserting after the item relating to subchapter B the 

4 following new item: 

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

5 (2) The table of sections for subchapter A of 

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

7 end the following new item: 

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

8 (3) The table of sections for subpart C of part 

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

10 amended by inserting after the item relating to sec11 tion 36A the following new item: 

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

12 (f) EFFECTIVE DATE.—The amendments made by 

13 this section shall apply to transactions occurring after De14 cember 31, 2010. 

Æ 


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