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[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 2927 Introduced in Senate (IS)]

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.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Wall Street Fair Share Act''.

SEC. 2. TRANSACTION TAX.

    (a) In General.--Chapter 36 of the Internal Revenue Code of 1986 is 
amended by inserting after subchapter B the following new subchapter:

             ``Subchapter C--Tax on Securities Transactions

``Sec. 4475. Tax on securities transactions.

``SEC. 4475. TAX ON SECURITIES TRANSACTIONS.

    ``(a) Imposition of Tax.--There is hereby imposed a tax on each 
covered transaction with respect to any security.
    ``(b) Rate of Tax.--
            ``(1) Security.--
                    ``(A) In general.--Except as otherwise provided in 
                this subsection, the rate of such tax shall be equal to 
                0.25 percent of the fair market value of the security.
                    ``(B) Derivatives.--In the case of a security 
                described in subsection (d)(1)(D), the rate of such tax 
                shall be equal to 0.25 percent of the fair market value 
                of the underlying property with respect to, or the 
                notional principal amount of, the derivative financial 
                instrument involved in such transaction.
                    ``(C) Short-term debt instruments.--In the case of 
                a covered transaction with respect to a security 
                described in subsection (d)(1)(C) which has a fixed 
                maturity date not more than 1 year from the date of 
                issue, the rate of such tax shall be equal to 0.02 
                percent of the fair market value of such security.
            ``(2) Hedging transaction.--In the case of any covered 
        transaction which is a hedging transaction (within the meaning 
        of section 1221(a)(7)), subparagraphs (A) and (B) of paragraph 
        (1) shall each be applied by substituting `0.02 percent' for 
        `0.25 percent'.
    ``(c) Covered Transaction.--For purposes of this section, the term 
`covered transaction' means--
            ``(1) except as provided in paragraph (2), any purchase 
        if--
                    ``(A) such purchase occurs on a trading facility 
                located in the United States, or
                    ``(B) the purchaser or seller is a United States 
                person, or
            ``(2) any transaction with respect to a security described 
        in subsection (d)(1)(D), if any party with rights under such 
        security is a United States person or if such transaction is 
        facilitated by a United States person, including a trading 
        facility located in the United States or a broker.
    ``(d) Security and Other Definitions.--For purposes of this 
section--
            ``(1) In general.--The term `security' means--
                    ``(A) any share of stock in a corporation,
                    ``(B) any partnership or beneficial ownership 
                interest in a widely held or publicly traded 
                partnership or trust,
                    ``(C) any note, bond, debenture, or other evidence 
                of indebtedness issued by a nongovernmental entity the 
                beneficial ownership of which is traded on an 
                established market, or
                    ``(D) any evidence of an interest in, or a 
                derivative financial instrument in--
                            ``(i) any security described in 
                        subparagraph (A), (B), or (C),
                            ``(ii) any specified index, or
                            ``(iii) any other note, bond, or debenture 
                        issued by a nongovernmental entity.
            ``(2) Derivative financial instrument.--The term 
        `derivative financial instrument' means any option, forward 
        contract, short position, notional principal contract, credit 
        default swap, or any similar financial instrument.
            ``(3) Specified index.--The term `specified index' means 
        any 1 or more of any combination of--
                    ``(A) a fixed rate, price, or amount, or
                    ``(B) a variable rate, price, or amount,   
        which is based on any current objectively determinable 
        information which is not within the control of any of the 
        parties to the contract or instrument and is not unique to any 
        of the parties' circumstances.
    ``(e) Exceptions to Imposition of Tax.--
            ``(1) Exception for initial issues.--No tax shall be 
        imposed under subsection (a) on any covered transaction with 
        respect to the initial issuance of any security described in 
        subparagraph (A), (B), or (C) of subsection (d)(1).
            ``(2) Exception for retirement accounts, etc.--No tax shall 
        be imposed under subsection (a) on any covered transaction with 
        respect to any security which is held in any plan, account, or 
        arrangement described in section 220, 223, 401(a), 403(a), 
        403(b), 408, 408A, 529, or 530 (including assets held in a 
        segregated asset account described in section 817 as part of 
        any such plan, account, or arrangement).
            ``(3) Exception for certain mutual fund transactions.--No 
        tax shall be imposed under subsection (a) on any covered 
        transaction--
                    ``(A) with respect to the purchase of any interest 
                in a regulated investment company (as defined in 
                section 851) which issues only stock which is 
                redeemable on the demand of the stock holder,
                    ``(B) by a regulated investment company (as so 
                defined) which is 100 percent owned by 1 or more plans, 
                accounts, or arrangements described in paragraph (2), 
                and
                    ``(C) to the extent such tax is properly allocable 
                to any class of shares of a regulated investment 
                company (as so defined) which is 100 percent owned by 1 
                or more plans, accounts, or arrangements described in 
                paragraph (2).
    ``(f) By Whom Paid.--
            ``(1) In general.--The tax imposed by this section shall be 
        paid by--
                    ``(A) in the case of a transaction which occurs on 
                a trading facility located in the United States, such 
                trading facility,
                    ``(B) in the case of a transaction not described in 
                subparagraph (A) which is executed by a broker, such 
                broker,
                    ``(C) in the case of a transaction not described in 
                subparagraph (A) or (B), with respect to a security 
                described in section (d)(1)(D), the party identified by 
                the Secretary, or
                    ``(D) in any other case, the purchaser with respect 
                to the transaction.
            ``(2) Withholding if purchaser is not a united states 
        person.--See section 1447 for withholding by seller if 
        purchaser is a foreign person.
    ``(g) Administration.--The Secretary shall carry out this section 
in consultation with the Securities and Exchange Commission and the 
Commodity Futures Trading Commission.
    ``(h) Guidance; Regulations.--The Secretary shall--
            ``(1) provide guidance regarding such information reporting 
        concerning covered transactions as the Secretary deems 
        appropriate, and
            ``(2) prescribe such regulations as are necessary or 
        appropriate to prevent avoidance of the purposes of this 
        section, including the use of non-United States persons in such 
        transactions or the improper allocation of taxes to classes of 
        shares described in subsection (e)(3)(C).''.
    (b) Credit for First $100,000 of Stock Transactions Per Year.--
Subpart C of part IV of subchapter A of chapter 1 of such Code is 
amended by inserting after section 36A the following new section:

``SEC. 36B. CREDIT FOR SECURITIES TRANSACTION TAXES.

    ``(a) Allowance of Credit.--In the case of any individual who is a 
purchaser with respect to a covered transaction, there shall be allowed 
as a credit against the tax imposed by this subtitle for the taxable 
year an amount equal to the lesser of--
            ``(1) the aggregate amount of tax imposed under section 
        4475 on covered transactions during the taxable year with 
        respect to which the taxpayer is the purchaser, or
            ``(2) $250 ($125 in the case of a married individual filing 
        a separate return).
    ``(b) Definitions.--For purposes of this section, any term used in 
this section which is also used in section 4475 shall have the same 
meaning as when used in section 4475.''.
    (c) Withholding.--Subchapter A of chapter 3 of such Code is amended 
by adding at the end the following new section:

``SEC. 1447. WITHHOLDING ON SECURITIES TRANSACTIONS.

    ``(a) In General.--In the case of any outbound securities 
transaction, except as provided in subsection (b), the transferor shall 
deduct and withhold a tax equal to the tax imposed under section 4475 
with respect to such transaction.
    ``(b) Derivatives.--In the case of any outbound securities 
transaction with respect to a security described in section 
4475(d)(1)(D), the party identified by the Secretary shall so deduct 
and withhold.
    ``(c) Outbound Securities Transaction.--For purposes of this 
section, the term `outbound securities transaction' means any covered 
transaction to which section 4475(a) applies if--
            ``(1) such transaction does not occur on a trading facility 
        located in the United States, and
            ``(2) the purchaser with respect to such transaction in not 
        a United States person.''.
    (d) Conforming Amendments.--
            (1) Section 6211(b)(4)(A) of such Code is amended by 
        inserting ``36B,'' after ``36A,''.
            (2) Section 1324(b)(2) of title 31, United States Code, is 
        amended by inserting ``36B,'' after ``36A,''.
    (e) Clerical Amendments.--
            (1) The table of subchapters for chapter 36 of the Internal 
        Revenue Code of 1986 is amended by inserting after the item 
        relating to subchapter B the following new item:

``Subchapter C. Tax on securities transactions.''.
            (2) The table of sections for subchapter A of chapter 3 of 
        such Code is amended by adding at the end the following new 
        item:

``Sec. 1447. Withholding on securities transactions.''.
            (3) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 of such Code is amended by inserting 
        after the item relating to section 36A the following new item:

``Sec. 36B. Credit for securities transaction taxes.''.
    (f) Effective Date.--The amendments made by this section shall 
apply to transactions occurring after December 31, 2010.
                                 <all>
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