Putting Main Street FIRST Act

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Putting Main Street FIRST Act'' or 
as the ``Putting Main Street FIRST: Finishing Irresponsible Reckless 
Speculative Trading Act''.

SEC. 2. TRANSACTION TAX.

    (a) In General.--Chapter 36 of the Internal Revenue Code of 1986 is 
amended by inserting after subchapter 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 each 
covered transaction with respect to any security.
    ``(b) Rate of Tax.--The tax imposed under subsection (a) with 
respect to any covered transaction shall be 0.03 percent of the 
specified base amount with respect to such covered transaction.
    ``(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 a security (determined as of the time of the covered 
        transaction), and
            ``(2) in the case of any payment with respect to a 
        derivative, the amount of such payment.
    ``(d) Covered Transaction.--For purposes of this section--
            ``(1) In general.--The term `covered transaction' means--
                    ``(A) except as provided in subparagraph (B), any 
                purchase if--
                            ``(i) such purchase occurs on, or is 
                        subject to the rules of, a qualified board or 
                        exchange located in the United States, or
                            ``(ii) the purchaser or seller is a United 
                        States person, and
                    ``(B) any transaction with respect to a derivative 
                if--
                            ``(i) such derivative is traded on, or is 
                        subject to the rules of, a qualified board or 
                        exchange located in the United States, or
                            ``(ii) any party with rights under such 
                        derivative is a United States person.
            ``(2) Exceptions from tax.--
                    ``(A) Exception for initial issues.--No tax shall 
                be imposed under subsection (a) on any covered 
                transaction with respect to the initial issuance of any 
                security described in subparagraph (A), (B), or (C) of 
                subsection (e)(1).
                    ``(B) Exception for certain traded short-term 
                indebtedness.--A note, bond, debenture, or other 
                evidence of indebtedness which--
                            ``(i) is traded on, or is subject to the 
                        rules of, a qualified board or exchange located 
                        in the United States, and
                            ``(ii) has a fixed maturity of not more 
                        than 100 days,
                shall not be treated as described in subsection 
                (e)(1)(C).
    ``(e) Definitions.--For purposes of this section--
            ``(1) Security.--The term `security' means--
                    ``(A) any share of stock in a corporation,
                    ``(B) any partnership or beneficial ownership 
                interest in a partnership or trust,
                    ``(C) any note, bond, debenture, or other evidence 
                of indebtedness, and
                    ``(D) any derivative.
            ``(2) Derivative.--
                    ``(A) In general.--The term `derivative' means any 
                contract (including any option, forward contract, 
                futures contract, short position, swap, or similar 
                contract) the value of which, or any payment or other 
                transfer with respect to which, is (directly or 
                indirectly) determined by reference to one or more of 
                the following:
                            ``(i) Any security described in 
                        subparagraph (A), (B), or (C) of paragraph (1).
                            ``(ii) Any commodity which is actively 
                        traded (within the meaning of section 
                        1092(d)(1)).
                            ``(iii) Any currency.
                            ``(iv) Any rate, price, amount, index, 
                        formula, or algorithm.
                            ``(v) Any other item as the Secretary may 
                        prescribe.
                Such term shall not include any item described in 
                clauses (i) through (v).
                    ``(B) Exceptions from treatment as derivatives.--
                            ``(i) Securities lending, sale-repurchase, 
                        and similar financing transactions.--To the 
                        extent provided by the Secretary, the term 
                        `derivative' shall not include the right to the 
                        return of the same or substantially identical 
                        securities transferred in a securities lending 
                        transaction, sale-repurchase transaction, or 
                        similar financing transaction.
                            ``(ii) Insurance contracts, annuities, and 
                        endowments.--The term `derivative' shall not 
                        include any insurance, annuity, or endowment 
                        contract issued by an insurance company to 
                        which subchapter L applies (or issued by any 
                        foreign corporation to which such subchapter 
                        would apply if such foreign corporation were a 
                        domestic corporation).
            ``(3) Qualified board or exchange.--The term `qualified 
        board or exchange' has the meaning given such term by section 
        1256(g)(7).
    ``(f) By Whom Paid.--
            ``(1) In general.--The tax imposed by this section shall be 
        paid by--
                    ``(A) in the case of a transaction which occurs on, 
                or is subject to the rules of, a qualified board or 
                exchange located in the United States, such qualified 
                board or exchange, and
                    ``(B) in the case of a purchase not described in 
                subparagraph (A) which is executed by a broker (as 
                defined in section 6045(c)(1)) which is a United States 
                person, such 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)(A)--
                            ``(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)(1)(B)--
                            ``(i) the payor if the payor is a United 
                        States person, and
                            ``(ii) the payee if the payor is not a 
                        United States person.
    ``(g) Treatment of Exchanges and Payments With Respect to 
Derivatives.--For purposes of this section--
            ``(1) 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 exchange for stock under 
                section 302 or 331, the corporation making such 
                distribution shall be treated as having purchased such 
                stock for purposes of this section.
            ``(2) Payments with respect to derivatives treated as 
        separate transactions.--Except as otherwise provided by the 
        Secretary, any payment with respect any derivative shall be 
        treated as a separate transaction for purposes of this section.
    ``(h) Application to Transactions by Controlled Foreign 
Corporations.--
            ``(1) In general.--For purposes of this section, a 
        controlled foreign corporation shall be treated as a United 
        States person.
            ``(2) Special rules for payment of tax on direct, etc., 
        transactions.--In the case of any transaction which is a 
        covered transaction solely by reason of paragraph (1) and which 
        is not described in subsection (f)(1)--
                    ``(A) Payment by united states shareholders.--Any 
                tax which would (but for this paragraph) be payable 
                under subsection (f)(2) by the controlled foreign 
                corporation shall, in lieu thereof, be paid by the 
                United States shareholders of such controlled foreign 
                corporation as provided in subparagraph (B).
                    ``(B) Pro rata shares.--Each such United States 
                shareholder shall pay the same proportion of such tax 
                as--
                            ``(i) the stock which such United States 
                        shareholder owns (within the meaning of section 
                        958(a)) in such controlled foreign corporation, 
                        bears to
                            ``(ii) the stock so owned by all United 
                        States shareholders in such controlled foreign 
                        corporation.
                    ``(C) Definitions.--For purposes of this 
                subsection, the terms `United States shareholder' and 
                `controlled foreign corporation' have the meanings 
                given such terms in sections 951(b) and 957(a), 
                respectively.
    ``(i) Administration.--The Secretary shall carry out this section 
in consultation with the Securities and Exchange Commission and the 
Commodity Futures Trading Commission.
    ``(j) Guidance; Regulations.--The Secretary shall--
            ``(1) provide guidance regarding such information reporting 
        concerning covered transactions as the Secretary deems 
        appropriate, and
            ``(2) prescribe such regulations as are necessary or 
        appropriate to prevent avoidance of the purposes of this 
        section, including the use of non-United States persons in such 
        transactions.''.
    (b) Credit With Respect to Certain Tax-Favored Accounts To Offset 
Transaction Tax.--Subpart C of part IV of subchapter A of chapter 1 of 
such Code is amended by inserting after section 36B the following new 
section:

``SEC. 36C. OFFSET FOR TRANSACTION TAX ON CONTRIBUTIONS TO CERTAIN TAX-
              FAVORED ACCOUNTS.

    ``(a) In General.--There shall be allowed as a credit against the 
tax imposed by this subtitle for the taxable year an amount equal to 
0.03 percent of the qualified tax-favored account contributions of the 
taxpayer for the taxable year.
    ``(b) Qualified Tax-Favored Account Contributions.--For purposes of 
this section, the term `qualified tax-favored account contributions' 
means, with respect to any taxable year, the sum of--
            ``(1) with respect to qualified retirement plans (as 
        defined in section 4974(c)) of the taxpayer, the amount 
        contributed to such plans for such taxable year to the extent 
        that such contributions are allowable as a deduction or are 
        excludable from gross income (or, in the case of a Roth IRA (as 
        defined in section 408A(b)), the amount contributed),
            ``(2) with respect to Archer MSAs of the taxpayer, the 
        amount allowed as a deduction under section 220 for such 
        taxable year,
            ``(3) with respect to health savings accounts of the 
        taxpayer, the amount allowed as a deduction under section 223 
        for such taxable year, plus
            ``(4) with respect to qualified tuition programs (as 
        defined in section 529), qualified ABLE programs (as defined in 
        section 529A), and Coverdell education savings accounts (as 
        defined in section 530), with respect to which the taxpayer is 
        the designated beneficiary (or, in the case of a designated 
        beneficiary with respect to whom another taxpayer is allowed a 
        deduction under section 151, such other taxpayer in lieu of 
        such designated beneficiary), the amount contributed for such 
        taxable year.''.
    (c) Information Reporting With Respect to Controlled Foreign 
Corporations.--Section 6038(a)(1)(B) of such Code is amended by 
inserting ``and transactions which are covered transactions for 
purposes of section 4475 by reason of the application of section 
4475(h)(1) to such corporation'' before the semicolon at the end.
    (d) Conforming Amendments.--
            (1) Section 1324(b)(2) of title 31, United States Code, is 
        amended by inserting ``, 36C'' after ``36B''.
            (2) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 of the Internal Revenue Code of 1986 
        is amended by inserting before the item relating to section 37 
        the following new item:

``Sec. 36C. Offset for transaction tax on contributions to certain tax-
                            favored accounts.''.
            (3) The table of subchapters for chapter 36 of such Code is 
        amended by inserting after the item relating to subchapter B 
        the following new item:

             ``subchapter c. tax on trading transactions''.

    (e) Effective Date.--The amendments made by this section shall 
apply to transactions after December 31, 2018.

Summary: Putting Main Street FIRST Act or the Putting Main Street FIRST: Finishing Irresponsible Reckless Speculative Trading Act This bill amends the Internal Revenue Code to impose a .03% excise tax on the purchase of a security if: (1) such purchase occurs on, or is subject to the rules of, a qualified board or exchange located in the United States; or (2) the purchaser or seller is a U.S. person. A &quot;security&quot; includes: (1) any share of stock in a corporation, (2) any partnership or beneficial ownership interest in a partnership or trust; (3) any note, bond, debenture, or other evidence of indebtedness; and (4) derivatives that meet specified criteria.  The tax applies to transactions with respect to a derivative if: (1) the derivative is traded on, or is subject to the rules of, a qualified board or exchange located in the United States; or (2) any party with rights under the derivative is a U.S. person. The bill exempts from such tax: (1) initial issues of securities; and (2) any note, bond, debenture, or other evidence of indebtedness which is traded on or is subject to the rules of, a qualified board or exchange located in the United States, and has a fixed maturity of not more than 100 days.  The tax applies to transactions by a controlled foreign corporation and must be paid by its U.S. shareholders.  The bill allows an offset against such tax for contributions to certain tax-favored savings accounts.