I

103D CONGRESS

1ST SESSION H. R. 1937

To amend the Internal Revenue Code of 1986 to provide for adjustments

in the individual income tax rates to reflect regional differences in the

cost-of-living.

IN THE HOUSE OF REPRESENTATIVES

APRIL 29, 1993

Mr. NADLER (for himself, Mrs. MALONEY, and Mr. LEVY) 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

for adjustments in the individual income tax rates to

reflect regional differences in the cost-of-living.

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 ‘‘Tax Equity Act of

5 1993’’.

6 SEC. 2. REGIONAL COST-OF-LIVING ADJUSTMENTS IN INDI7 VIDUAL INCOME TAX RATES.

8 (a) GENERAL RULE.—Subsection (f) of section 1 of

9 the Internal Revenue Code of 1986 (relating to adjust-
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1 ments in tax tables so that inflation will not result in tax

2 increases) is amended by adding at the end thereof the

3 following new paragraphs:

4 ‘‘(6) REGIONAL COST-OF-LIVING ADJUST5 MENTS.—

6 ‘‘(A) IN GENERAL.—In the case of an indi7 vidual, the rate table otherwise in effect under

8 this section for any taxable year (determined

9 after the application of paragraph (1)) shall be

10 further adjusted as provided in subparagraph

11 (B).

12 ‘‘(B) METHOD OF MAKING REGIONAL AD13 JUSTMENT.—The rate table otherwise in effect

14 under this section with respect to any individual

15 for any taxable year shall be adjusted as fol16 lows:

17 ‘‘(i) The minimum and maximum dol18 lar amounts otherwise in effect for each

19 rate bracket shall be multiplied by the

20 cost-of-living multiplier (for the calendar

21 year in which the taxable year begins)

22 which applies to the area in which the indi23 vidual’s primary place of abode during the

24 taxable year is located.
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1 ‘‘(ii) The rate applicable to any rate

2 bracket (as adjusted by clause (i)) shall

3 not be changed.

4 ‘‘(iii) The amount setting forth the

5 tax shall be adjusted to the extent nec6 essary to reflect the adjustments in the

7 rate brackets.

8 If any amount determined under clause (i) is

9 not a multiple of $50, such amount shall be

10 rounded to the nearest multiple of $50.

11 ‘‘(7) DETERMINATION OF MULTIPLIERS.—

12 ‘‘(A) IN GENERAL.—Not later than De13 cember 15 of each calendar year, the Secretary

14 shall prescribe a cost-of-living multiplier for

15 each area (as defined by the Secretary) of the

16 United States which shall apply to taxable years

17 beginning during the succeeding calendar year.

18 ‘‘(B) METHOD OF DETERMINING MULTI19 PLIERS.—The cost-of-living multiplier for any

20 area for any calendar year is a fraction—

21 ‘‘(i) the numerator of which is the

22 cost-of-living for such area for the preced23 ing calendar year; and
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1 ‘‘(ii) the denominator of which is the

2 average cost-of-living for the United States

3 for the preceding calendar year.

4 ‘‘(C) COST-OF-LIVING FOR AREA.—The

5 Secretary shall determine the cost-of-living for

6 an area for a calendar year using an average of

7 retail market prices for such area for the 12-

8 month period ending on August 31 of such cal9 endar year. The retail market prices taken into

10 account under the preceding sentence shall be

11 selected and used under the same methodology

12 as is used by the Bureau of Labor Statistics in

13 developing the Consumer Price Index for All

14 Urban Consumers.

15 ‘‘(8) AREAS OUTSIDE THE UNITED STATES.—

16 The area cost-of-living multiplier for any area out17 side the United States shall be 1.’’

18 (b) EFFECTIVE DATE.—

19 (1) IN GENERAL.—The amendment made by

20 this section shall apply to taxable years beginning

21 after December 31, 1992.

22 (2) TRANSITION RULE.—Notwithstanding sec23 tion 1(f)(7)(A) of the Internal Revenue Code (as

24 added by this section), the date for prescribing cost25 of-living multipliers for taxable years beginning in
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1 calendar year 1993 shall be the date 90 days after

2 the date of the enactment of this Act.

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