I
103D CONGRESS
1ST SESSION
H. R. 3671
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
NOVEMBER 22, 1993
Mr. NADLER (for himself, Mrs. LOWEY, Mr. ENGEL, and Mr. SCHUMER) in-
troduced 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.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Tax Equity Act of
1993’’.
SEC. 2. REGIONAL COST-OF-LIVING ADJUSTMENTS IN INDI-
VIDUAL INCOME TAX RATES.
(a) GENERAL RULE.—Subsection (f) of section 1 of
the Internal Revenue Code of 1986 (relating to adjust-
ments in tax tables so that inflation will not result in tax
increases) is amended by adding at the end thereof the
following new paragraphs:
‘‘(8) 
REGIONAL
COST-OF-LIVING
ADJUST-
MENTS.—
‘‘(A) IN GENERAL.—In the case of an indi-
vidual, the rate table otherwise in effect under
this section for any taxable year (determined
after the application of paragraph (1)) shall be
further adjusted as provided in subparagraph
(B).
‘‘(B) METHOD OF MAKING REGIONAL AD-
JUSTMENT.—The rate table otherwise in effect
under this section with respect to any individual
for any taxable year shall be adjusted as fol-
lows:
‘‘(i) The minimum and maximum dol-
lar amounts otherwise in effect for each
rate bracket shall be multiplied by the ap-
plicable multiplier (for the calendar year in
which the taxable year begins) which ap-
plies to the statistical area in which the in-
dividual’s primary place of abode during
the taxable year is located.
‘‘(ii) The rate applicable to any rate
bracket (as adjusted by clause (i)) shall
not be changed.
‘‘(iii) The amount setting forth the
tax shall be adjusted to the extent nec-
essary to reflect the adjustments in the
rate brackets.
If any amount determined under clause (i) is
not a multiple of $50, such amount shall be
rounded to the nearest multiple of $50.
‘‘(9) DETERMINATION OF MULTIPLIERS.—
‘‘(A) IN
GENERAL.—Not later than De-
cember 15 of each calendar year, the Secretary
shall prescribe an applicable multiplier for each
statistical area of the United States which shall
apply to taxable years beginning during the suc-
ceeding calendar year.
‘‘(B) DETERMINATION OF MULTIPLIERS.—
‘‘(i) For each statistical area where
the cost-of-living differential for any cal-
endar year is greater than 125 percent, the
applicable multiplier for such calendar year
is 90 percent of such differential.
‘‘(ii) For each statistical area where
the cost-of-living differential for any cal-
endar year exceeds 97 percent but does not
exceed 125 percent, the applicable multi-
plier for such calendar year is 1.05.
(iii) For each statistical area not de-
scribed in clause (i) or (ii), the applicable
multiplier is the cost-of-living differential
for the calendar year.
‘‘(C) COST-OF-LIVING
DIFFERENTIAL.—
The cost-of-living differential for any statistical
area for any calendar year is the percentage de-
termined by dividing—
‘‘(i) the cost-of-living for such area for
the preceding calendar year; by
‘‘(ii) the average cost-of-living for the
United States for the preceding calendar
year.
‘‘(D) COST-OF-LIVING FOR AREA.—
‘‘(i) IN GENERAL.—For each calendar
year beginning after 1993, the Secretary of
Labor shall determine and publish a cost-
of-living index for each statistical area.
‘‘(ii) METHODOLOGY.—The cost-of-liv-
ing index determined under clause (i) for
any statistical area for any calendar year
shall be based on average market prices for
the area for the 12-month period ending
on August 31 of such calendar year. The
market prices taken into account under the
preceding sentence shall be selected and
used under the same methodology as is
used by the Secretary of Labor in develop-
ing the Consumer Price Index for All
Urban Consumers.
‘‘(E) STATISTICAL AREA.—For purposes of
this subsection the term ‘statistical area’ means
‘‘(i) any metropolitan statistical area
as defined by the Secretary of Commerce,
and
‘‘(ii) the portion of any State not
within a metropolitan statistical area as so
defined.
‘‘(10) AREAS OUTSIDE THE UNITED STATES.—
The area applicable multiplier for any area outside
the United States shall be 1.’’
(b) EFFECTIVE DATE.—
(1) IN
GENERAL.—The amendment made by
this section shall apply to taxable years beginning
after December 31, 1993.
(2) TRANSITION RULE.—Notwithstanding sec-
tion 1(f)(9)(A) of the Internal Revenue Code (as
added by this section), the date for prescribing ap-
plicable multipliers for taxable years beginning in
calendar year 1994 shall be the date 1 year after the
date of the enactment of this Act.
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