I 

112TH CONGRESS 

1ST SESSION H. R. 3018 

To amend the Internal Revenue Code of 1986 to provide a temporary surtax 

on increases in retained earnings of domestic corporations. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 22, 2011 

Mr. CAPUANO 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 provide 

a temporary surtax on increases in retained earnings 

of domestic corporations. 

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 ‘‘Corporate Assets 

5 Should be used to Hire Act’’. 

6 SEC. 2. TEMPORARY SURTAX ON INCREASES IN RETAINED 

7 EARNINGS OF DOMESTIC CORPORATIONS. 

8 (a) IN GENERAL.—Part II of subchapter A of chap9 ter 1 of the Internal Revenue Code of 1986 is amended 


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1 by redesignating section 12 as section 13 and by inserting 

2 after section 11 the following new section: 

3 ‘‘SEC. 12. TEMPORARY SURTAX ON INCREASES IN RE4 TAINED EARNINGS OF DOMESTIC CORPORA5 TIONS. 

6 ‘‘(a) IN GENERAL.—In the case of a domestic cor7 poration for any taxable year beginning during 2011 or 

8 2012, there is hereby imposed (in addition to any other 

9 tax imposed by this part) a tax equal to 40 percent of 

10 the excess (if any) of— 

11 ‘‘(1) the retained earnings of such corporation 

12 for such taxable year, over 

13 ‘‘(2) the average retained earnings of such cor14 poration for the 3 taxable years immediately pre15 ceding such taxable year. 

16 ‘‘(b) EXCEPTIONS.— 

17 ‘‘(1) RETAINED EARNINGS REQUIRED BY

18 LAW.—Subsection (a) shall not apply to so much of 

19 the excess described in such subsection as is attrib20 utable to any increase in retained earnings which is 

21 required by Federal law or regulation. 

22 ‘‘(2) SMALL BUSINESS EXCEPTION.—Subsection 

23 (a) shall not apply to any corporation for any tax24 able year with respect to which the retained earnings 

25 of such corporation for such taxable year is less than 


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1 $5,000,000. For purposes of this paragraph, all per2 sons treated as a single employer under subsection 

3 (a) or (b) of section 52, or subsection (m) or (o) of 

4 section 414, shall be treated as one person. 

5 ‘‘(3) CORPORATIONS NOT IN EXISTENCE FOR

6 ENTIRE BASE PERIOD.—Subsection (a) shall not 

7 apply to any corporation if such corporation was not 

8 in existence for the entire 3 taxable year period re9 ferred to in subsection (a)(2). 

10 ‘‘(c) RETAINED EARNINGS.—For purposes of this 

11 section, the term ‘retained earnings’ means, with respect 

12 to any taxable year, the excess (if any) of— 

13 ‘‘(1) the retained earnings of such corporation 

14 as of the end of such taxable year, over 

15 ‘‘(2) the retained earnings of such corporation 

16 as of the beginning of such taxable year. 

17 Appropriated and unappropriated retained earnings shall 

18 be taken into account under paragraphs (1) and (2). 

19 ‘‘(d) TREATMENT OF PREDECESSORS.—Any ref20 erence in this section to a corporation shall include a ref21 erence to any predecessor of such corporation.’’. 

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

23 for part II of subchapter A of chapter 1 of such Code 

24 is amended by redesignating the item relating to section 


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1 12 as an item relating to section 13 and by inserting after 

2 the item relating to section 11 the following new item: 

‘‘Sec. 12. Temporary surtax on increases in retained earnings of domestic corporations.’’. 

3 (c) DEFICIT REDUCTION.—The increase in Federal 

4 revenue resulting from the amendments made by this sec5 tion shall be deposited in the Treasury and used for Fed6 eral budget deficit reduction or, if there is no Federal 

7 budget deficit, for reducing the Federal debt in such man8 ner as the Secretary of the Treasury considers appro9 priate. 

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

11 this section shall apply to taxable years beginning after 

12 December 31, 2010. 

Æ 


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