I 
112TH CONGRESS 
1ST SESSION H. R. 1631 
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 15, 2011 
Mr. NADLER (for himself, Mrs. LOWEY, and Mr. ISRAEL) 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. 
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 
2011’’. 
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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 is amended by adding 
at the end thereof the following new paragraphs: 
‘‘(9) 
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. 
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‘‘(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. 
‘‘(10) 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-
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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 calendar year 
2010 and each calendar year thereafter, 
the Secretary of Labor shall determine and 
publish a cost-of-living index for each sta-
tistical area. 
‘‘(ii) METHODOLOGY.—The cost-of-liv-
ing index determined under clause (i) for 
any statistical area for any calendar year 
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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 devel-
oping 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. 
‘‘(11) 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, 2011. 
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(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 2012 shall be the date 1 year after the 
date of the enactment of this Act. 
Æ 
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