(D) fund international sustainable pros-
perity programs such as HIV treatment, re-
search and prevention programs, other inter-
national health and humanitarian assistance, 
and climate change adaptation and mitigation 
efforts by developing countries. 
SEC. 3. TRANSACTION TAX. 
(a) IN GENERAL.—Chapter 36 of the Internal Rev-
enue Code of 1986 is amended by inserting after sub-
chapter B the following new subchapter: 
‘‘Subchapter C—Tax on Trading Transactions 
‘‘Sec. 4475. Tax on trading transactions. 
‘‘SEC. 4475. TAX ON TRADING TRANSACTIONS. 
‘‘(a) IMPOSITION OF TAX.—There is hereby imposed 
a tax on the transfer of ownership in each covered trans-
action with respect to any security. 
‘‘(b) RATE OF TAX.—The tax imposed under sub-
section (a) with respect to any covered transaction shall 
be the applicable percentage of the specified base amount 
with respect to such covered transaction. The applicable 
percentage shall be— 
‘‘(1) 0.5 percent in the case of a security de-
scribed in subparagraph (A) or (B) of subsection 
(e)(1), 
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‘‘(2) 0.10 percent in the case of a security de-
scribed in subparagraph (C) of subsection (e)(1), 
and 
‘‘(3) 0.005 percent in the case of a security de-
scribed in subparagraph (D), (E), or (F) of sub-
section (e)(1). 
‘‘(c) SPECIFIED BASE AMOUNT.—For purposes of 
this section, the term ‘specified base amount’ means— 
‘‘(1) except as provided in paragraph (2), the 
fair market value of the security (determined as of 
the time of the covered transaction), and 
‘‘(2) in the case of any payment described in 
subsection (h), the amount of such payment. 
‘‘(d) 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 or is cleared on 
a facility located in the United States, or 
‘‘(B) the purchaser or seller is a United 
States person, and 
‘‘(2) any transaction with respect to a security 
described in subparagraph (D), (E), or (F) of sub-
section (e)(1), if— 
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‘‘(A) such security is traded or cleared on 
a facility located in the United States, or 
‘‘(B) any party with rights under such se-
curity is a United States person. 
‘‘(e) SECURITY AND OTHER DEFINITIONS.—For pur-
poses of this section— 
‘‘(1) 
IN
GENERAL.—The 
term 
‘security’ 
means— 
‘‘(A) any share of stock in a corporation, 
‘‘(B) any partnership or beneficial owner-
ship interest in a partnership or trust, 
‘‘(C) any note, bond, debenture, or other 
evidence of indebtedness, other than a State or 
local bond the interest of which is excluded 
from gross income under section 103(a), 
‘‘(D) any evidence of an interest in, or a 
derivative financial instrument with respect to, 
any security or securities described in subpara-
graph (A), (B), or (C), 
‘‘(E) any derivative financial instrument 
with respect to any currency or commodity in-
cluding notional principal contracts, and 
‘‘(F) any other derivative financial instru-
ment any payment with respect to which is cal-
culated by reference to any specified index. 
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‘‘(2) DERIVATIVE
FINANCIAL
INSTRUMENT.— 
The term ‘derivative financial instrument’ includes 
any option, forward contract, futures contract, no-
tional principal contract, or any similar financial in-
strument. 
‘‘(3) SPECIFIED
INDEX.—The term ‘specified 
index’ means any one 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 deter-
minable 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 par-
ties’ circumstances. 
‘‘(4) TREATMENT OF EXCHANGES.— 
‘‘(A) IN GENERAL.—An exchange shall be 
treated as the sale of the property transferred 
and a purchase of the property received by each 
party to the exchange. 
‘‘(B) CERTAIN DEEMED EXCHANGES.—In 
the case of a distribution treated as an ex-
change for stock under section 302 or 331, the 
corporation making such distribution shall be 
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treated as having purchased such stock for pur-
poses of this section. 
‘‘(f) EXCEPTIONS.— 
‘‘(1) EXCEPTION FOR INITIAL ISSUES.—No tax 
shall be imposed under subsection (a) on any cov-
ered transaction with respect to the initial issuance 
of any security described in subparagraph (A), (B), 
or (C) of subsection (e)(1). 
‘‘(2) EXCEPTION FOR CERTAIN TRADED SHORT- 
TERM INDEBTEDNESS.—A note, bond, debenture, or 
other evidence of indebtedness which— 
‘‘(A) is traded on a trading facility located 
in the United States, and 
‘‘(B) has a fixed maturity of not more 
than 60 days, 
shall not be treated as described in subsection 
(e)(1)(C). 
‘‘(3) EXCEPTION FOR SECURITIES LENDING AR-
RANGEMENTS.—No tax shall be imposed under sub-
section (a) on any covered transaction with respect 
to which gain or loss is not recognized by reason of 
section 1058. 
‘‘(g) BY WHOM PAID.— 
‘‘(1) IN GENERAL.—The tax imposed by this 
section shall be paid by— 
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‘‘(A) in the case of a transaction which oc-
curs or is cleared on a facility located in the 
United States, such facility, and 
‘‘(B) in the case of a purchase not de-
scribed in subparagraph (A) which is executed 
by a broker (as defined in section 6045(c)(1)), 
the broker. 
‘‘(2) SPECIAL
RULES
FOR
DIRECT, 
ETC., 
TRANSACTIONS.—In the case of any transaction to 
which paragraph (1) does not apply, the tax imposed 
by this section shall be paid by— 
‘‘(A) in the case of a transaction described 
in subsection (d)(1)— 
‘‘(i) the purchaser if the purchaser is 
a United States person, and 
‘‘(ii) the seller if the purchaser is not 
a United States person, and 
‘‘(B) in the case of a transaction described 
in subsection (d)(2)— 
‘‘(i) the payor if the payor is a United 
States person, and 
‘‘(ii) the payee if the payor is not a 
United States person. 
‘‘(h) CERTAIN PAYMENTS TREATED AS SEPARATE 
TRANSACTIONS.—Except as otherwise provided by the 
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of this section, including the use of non-United 
States persons in such transactions. 
‘‘(k) WHISTLEBLOWERS.—See section 7623 for pro-
visions relating to whistleblowers.’’. 
(b) PENALTY FOR FAILURE TO INCLUDE COVERED 
TRANSACTION INFORMATION WITH RETURN.—Part I of 
subchapter B of chapter 68 of the Internal Revenue Code 
of 1986 is amended by inserting after section 6707A the 
following new section: 
‘‘SEC. 6707B. PENALTY FOR FAILURE TO INCLUDE COV-
ERED TRANSACTION INFORMATION WITH RE-
TURN. 
‘‘(a) IMPOSITION
OF PENALTY.—Any person who 
fails to include on any return or statement any informa-
tion with respect to a covered transaction which is re-
quired pursuant to section 4475(j)(1) to be included with 
such return or statement shall pay a penalty in the 
amount determined under subsection (b). 
‘‘(b) AMOUNT OF PENALTY.—Except as otherwise 
provided in this subsection, the amount of the penalty 
under subsection (a) with respect to any covered trans-
action shall be determined by the Secretary. 
‘‘(c) COVERED TRANSACTION.—For purposes of this 
section, the term ‘covered transaction’ has the meaning 
given such term by section 4475(d). 
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‘‘(d) AUTHORITY TO RESCIND PENALTY.— 
‘‘(1) IN GENERAL.—The Commissioner of In-
ternal Revenue may rescind all or any portion of any 
penalty imposed by this section with respect to any 
violation if rescinding the penalty would promote 
compliance with the requirements of this title and 
effective tax administration. 
‘‘(2) NO
JUDICIAL
APPEAL.—Notwithstanding 
any other provision of law, any determination under 
this subsection may not be reviewed in any judicial 
proceeding. 
‘‘(3) RECORDS.—If a penalty is rescinded under 
paragraph (1), the Commissioner shall place in the 
file in the Office of the Commissioner the opinion of 
the Commissioner with respect to the determination, 
including— 
‘‘(A) a statement of the facts and cir-
cumstances relating to the violation, 
‘‘(B) the reasons for the rescission, and 
‘‘(C) the amount of the penalty rescinded. 
‘‘(e) COORDINATION WITH OTHER PENALTIES.—The 
penalty imposed by this section shall be in addition to any 
other penalty imposed by this title.’’. 
(c) CLERICAL AMENDMENTS.— 
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(1) The table of sections for part I of sub-
chapter B of chapter 68 of such Code is amended 
by inserting after item relating to section 6707A the 
following new item: 
‘‘Sec. 6707B. Penalty for failure to include covered transaction information 
with return.’’. 
(2) 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 TRADING TRANSACTIONS’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to transactions after December 31, 
2019. 
SEC. 4. OFFSETTING CREDIT FOR FINANCIAL TRANS-
ACTION TAX. 
(a) IN GENERAL.—Subpart A of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by inserting after section 25D the fol-
lowing new section: 
‘‘SEC. 25E. FINANCIAL TRANSACTION TAX PAYMENTS. 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an eli-
gible individual, there shall be allowed as a credit against 
the tax imposed by this chapter for the taxable year an 
amount equal to the tax paid during the taxable year 
under section 4475. 
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‘‘(b) LIMITATION BASED ON MODIFIED ADJUSTED 
GROSS INCOME.— 
‘‘(1) IN
GENERAL.—Subsection (a) shall not 
apply to a taxpayer for the taxable year if the modi-
fied adjusted gross income of the taxpayer for the 
taxable year exceeds $50,000 ($75,000 in the case 
of a joint return and one-half of such amount in the 
case of a married individual filing a separate re-
turn). 
‘‘(2) MODIFIED
ADJUSTED
GROSS
INCOME.— 
For purposes of paragraph (1), the term ‘modified 
adjusted gross income’ means adjusted gross in-
come— 
‘‘(A) determined without regard to sections 
86, 893, 911, 931, and 933, and 
‘‘(B) increased by the amount of interest 
received or accrued by the taxpayer during the 
taxable year which is exempt from tax. 
‘‘(3) INFLATION ADJUSTMENT.— 
‘‘(A) IN
GENERAL.—In the case of any 
taxable year beginning after 2020, each dollar 
amount referred to in paragraph (1) shall be in-
creased by an amount equal to— 
‘‘(i) such dollar amount, multiplied by 
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‘‘(ii) the cost-of-living adjustment de-
termined under section (1)(f)(3) of the In-
ternal Revenue Code of 1986 for the cal-
endar year in which the taxable year be-
gins, by substituting ‘2019’ for ‘2016’ in 
subparagraph (A)(ii) thereof. 
‘‘(B) ROUNDING.—If any amount as ad-
justed under subparagraph (A) is not a multiple 
of $50, such amount shall be rounded to the 
nearest multiple of $50. 
‘‘(c) ELIGIBLE INDIVIDUAL.— 
‘‘(1) IN
GENERAL.—The term ‘eligible indi-
vidual’ means, with respect to any taxable year, an 
individual who— 
‘‘(A) has attained the age of 18 as of the 
last day of such taxable year, and 
‘‘(B) is a citizen or lawful permanent resi-
dent (within the meaning of section 7701(b)(6)) 
as of the last day of such taxable year. 
‘‘(2) CERTAIN INDIVIDUALS NOT ELIGIBLE.— 
For purposes of paragraph (1), an individual de-
scribed in any of the following provisions of this title 
for the preceding taxable year shall not be treated 
as an eligible individual for the taxable year: 
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‘‘(A) An individual who is a student (as 
defined in section 152(f)(2)) for the taxable 
year or the immediately preceding taxable year. 
‘‘(B) An individual who is a taxpayer de-
scribed in subsection (c), (d), or (e) of section 
6402 for the immediately preceding taxable 
year.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for subpart A of part IV of subchapter A of chapter 1 
of such Code is amended by inserting after the item relat-
ing to section 25D the following new item: 
‘‘Sec. 25E. Financial transaction tax payments.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2019. 
Æ 
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