[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 1917 Placed on Calendar Senate (PCS)]

                                                       Calendar No. 238
112th CONGRESS
  1st Session
                                S. 1917

    To create jobs by providing payroll tax relief for middle class 
            families and businesses, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           November 28, 2011

Mr. Casey (for himself, Mr. Menendez, Mr. Brown of Ohio, Ms. Stabenow, 
Mr. Reid, Mr. Schumer, Mr. Blumenthal, Mr. Durbin, Mr. Lautenberg, Mr. 
  Leahy, and Mr. Whitehouse) introduced the following bill; which was 
                          read the first time

                           November 29, 2011

            Read the second time and placed on the calendar

_______________________________________________________________________

                                 A BILL


 
    To create jobs by providing payroll tax relief for middle class 
            families and businesses, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Middle Class Tax Cut Act of 2011''.

                      TITLE I--PAYROLL TAX RELIEF

SEC. 101. TEMPORARY PAYROLL TAX CUT FOR EMPLOYERS, EMPLOYEES AND THE 
              SELF-EMPLOYED.

    (a) Wages.--Notwithstanding any other provision of law--
            (1) with respect to remuneration received during the 
        payroll tax holiday period, the rate of tax under 3101(a) of 
        the Internal Revenue Code of 1986 shall be 3.1 percent 
        (including for purposes of determining the applicable 
        percentage under sections 3201(a) and 3211(a) of such Code), 
        and
            (2) with respect to remuneration paid during the payroll 
        tax holiday period, the rate of tax under 3111(a) of such Code 
        shall be 3.1 percent (including for purposes of determining the 
        applicable percentage under sections 3221(a) and 3211(a) of 
        such Code).
            (3) Subsection (a)(2) shall only apply to--
                    (A) employees performing services in a trade or 
                business of a qualified employer, or
                    (B) in the case of a qualified employer exempt from 
                tax under section 501(a), in furtherance of the 
                activities related to the purpose or function 
                constituting the basis of the employer's exemption 
                under section 501.
            (4) Subsection (a)(2) shall apply only to the first $5 
        million of remuneration or compensation paid by a qualified 
        employer subject to section 3111(a) or a corresponding amount 
        of compensation subject to 3221(a).
    (b) Self-Employment Taxes.--
            (1) In general.--Notwithstanding any other provision of 
        law, with respect to any taxable year which begins in the 
        payroll tax holiday period, the rate of tax under section 
        1401(a) of the Internal Revenue Code of 1986 shall be--
                    (A) 6.2 percent on the portion of net earnings from 
                self-employment subject to 1401(a) during the payroll 
                tax period that does not exceed the amount of the 
                excess of $5 million over total remuneration, if any, 
                subject to section 3111(a) paid during the payroll tax 
                holiday period to employees of the self-employed 
                person, and
                    (B) 9.3 percent for any portion of net earnings 
                from self-employment not subject to subsection 
                (b)(1)(A).
            (2) Coordination with deductions for employment taxes.--For 
        purposes of the Internal Revenue Code of 1986, in the case of 
        any taxable year which begins in the payroll tax holiday 
        period--
                    (A) Deduction in computing net earnings from self-
                employment.--The deduction allowed under section 
                1402(a)(12) of such Code shall be the sum of (i) 4.55 
                percent times the amount of the taxpayer's net earnings 
                from self-employment for the taxable year subject to 
                paragraph (b)(1)(A) of this section, plus (ii) 7.65 
                percent of the taxpayer's net earnings from self-
                employment in excess of that amount.
                    (B) Individual deduction.--The deduction under 
                section 164(f) of such Code shall be equal to the sum 
                of (i) one-half of the taxes imposed by section 1401 
                (after the application of this section) with respect to 
                the taxpayer's net earnings from self-employment for 
                the taxable year subject to paragraph (b)(1)(A) of this 
                section plus (ii) 62.7 percent of the taxes imposed by 
                section 1401 (after the application of this section) 
                with respect to the excess.
    (c) Regulatory Authority.--The Secretary may prescribe any such 
regulations or other guidance necessary or appropriate to carry out 
this section, including the allocation of the excess of $5 million over 
total remuneration subject to section 3111(a) paid during the payroll 
tax holiday period among related taxpayers treated as a single 
qualified employer.
    (d) Definitions.--
            (1) Payroll tax holiday period.--The term ``payroll tax 
        holiday period'' means calendar year 2012.
            (2) Qualified employer.--For purposes of this paragraph,
                    (A) In general.--The term ``qualified employer'' 
                means any employer other than the United States, any 
                State or possession of the United States, or any 
                political subdivision thereof, or any instrumentality 
                of the foregoing.
                    (B) Treatment of employees of post-secondary 
                educational institutions.--Notwithstanding paragraph 
                (A), the term ``qualified employer'' includes any 
                employer which is a public institution of higher 
                education (as defined in section 101 of the Higher 
                Education Act of 1965).
            (3) Aggregation rules.--For purposes of this subsection 
        rules similar to sections 414(b), 414(c), 414(m) and 414(o) 
        shall apply to determine when multiple entities shall be 
        treated as a single employer, and rules with respect to 
        predecessor and successor employers may be applied, in such 
        manner as may be prescribed by the Secretary.
    (e) Transfers of Funds.--
            (1) Transfers to federal old-age and survivors insurance 
        trust fund.--There are hereby appropriated to the Federal Old-
        Age and Survivors Trust Fund and the Federal Disability 
        Insurance Trust Fund established under section 201 of the 
        Social Security Act (42 U.S.C. 401) amounts equal to the 
        reduction in revenues to the Treasury by reason of the 
        application of subsections (a) and (b) to employers other than 
        those described in (e)(2). Amounts appropriated by the 
        preceding sentence shall be transferred from the general fund 
        at such times and in such manner as to replicate to the extent 
        possible the transfers which would have occurred to such Trust 
        Fund had such amendments not been enacted.
            (2) Transfers to social security equivalent benefit 
        account.--There are hereby appropriated to the Social Security 
        Equivalent Benefit Account established under section 15A(a) of 
        the Railroad Retirement Act of 1974 (45 U.S.C. 231n-1(a)) 
        amounts equal to the reduction in revenues to the Treasury by 
        reason of the application of subsection (a) to employers 
        subject to the Railroad Retirement Tax. Amounts appropriated by 
        the preceding sentence shall be transferred from the general 
        fund at such times and in such manner as to replicate to the 
        extent possible the transfers which would have occurred to such 
        Account had such amendments not been enacted.
    (f) Coordination With Other Federal Laws.--For purposes of applying 
any provision of Federal law other than the provisions of the Internal 
Revenue Code of 1986, the rate of tax in effect under section 3101(a) 
of such Code shall be determined without regard to the reduction in 
such rate under this section.

SEC. 102. TEMPORARY TAX CREDIT FOR INCREASED PAYROLL.

    (a) In General.--Notwithstanding any other provision of law, each 
qualified employer shall be allowed, with respect to wages for services 
performed for such qualified employer, a payroll increase credit 
determined as follows:
            (1) With respect to the period from October 1, 2011 through 
        December 31, 2011, 6.2 percent of the excess, if any, (but not 
        more than $12.5 million of the excess) of the wages subject to 
        tax under section 3111(a) of the Internal Revenue Code of 1986 
        for such period over such wages for the corresponding period of 
        2010.
            (2) With respect to the period from January 1, 2012 through 
        December 31, 2012,
                    (A) 6.2 percent of the excess, if any, (but not 
                more than $50 million of the excess) of the wages 
                subject to tax under section 3111(a) of the Internal 
                Revenue Code of 1986 for such period over such wages 
                for calendar year 2011, minus
                    (B) 3.1 percent of the excess (if any) of--
                            (i) the lesser of $5,000,000 or such wages 
                        for calendar year 2012, over
                            (ii) such wages for calendar year 2011.
            (3) In the case of a qualified employer for which the wages 
        subject to tax under section 3111(a) of the Internal Revenue 
        Code of 1986 (a) were zero for the corresponding period of 2010 
        referred to in subsection (a)(1), the amount of such wages 
        shall be deemed to be 80 percent of the amount of wages taken 
        into account for the period from October 1, 2011 through 
        December 31, 2011 and (b) were zero for the calendar year 2011 
        referred to in subsection (a)(2), then the amount of such wages 
        shall be deemed to be 80 percent of the amount of wages taken 
        into account for 2012.
            (4) This subsection (a) shall only apply with respect to 
        the wages of employees performing services in a trade or 
        business of a qualified employer or, in the case of a qualified 
        employer exempt from tax under section 501(a) of the Internal 
        Revenue Code of 1986, in furtherance of the activities related 
        to the purpose or function constituting the basis of the 
        employer's exemption under section 501.
    (b) Qualified Employers.--For purposes of this section--
            (1) In general.--The term ``qualified employer'' means any 
        employer other than the United States, any State or possession 
        of the United States, or any political subdivision thereof, or 
        any instrumentality of the foregoing.
            (2) Treatment of employees of post-secondary educational 
        institutions.--Notwithstanding subparagraph (1), the term 
        ``qualified employer'' includes any employer which is a public 
        institution of higher education (as defined in section 101 of 
        the Higher Education Act of 1965).
    (c) Aggregation Rules.--For purposes of this subsection rules 
similar to sections 414(b), 414(c), 414(m) and 414(o) of the Internal 
Revenue Code of 1986 shall apply to determine when multiple entities 
shall be treated as a single employer, and rules with respect to 
predecessor and successor employers may be applied, in such manner as 
may be prescribed by the Secretary.
    (d) Application of Credits.--The payroll increase credit shall be 
treated as a credit allowable under Subtitle C of the Internal Revenue 
Code of 1986 under rules prescribed by the Secretary of the Treasury, 
provided that the amount so treated for the period described in 
subsection (a)(1) or subsection (a)(2) shall not exceed the amount of 
tax imposed on the qualified employer under section 3111(a) of such 
Code for the relevant period. Any income tax deduction by a qualified 
employer for amounts paid under section 3111(a) of such Code or similar 
Railroad Retirement Tax provisions shall be reduced by the amounts so 
credited.
    (e) Transfers to Federal Old-Age and Survivors Insurance Trust 
Fund.--There are hereby appropriated to the Federal Old-Age and 
Survivors Trust Fund and the Federal Disability Insurance Trust Fund 
established under section 201 of the Social Security Act (42 U.S.C. 
401) amounts equal to the reduction in revenues to the Treasury by 
reason of the amendments made by subsection (d). Amounts appropriated 
by the preceding sentence shall be transferred from the general fund at 
such times and in such manner as to replicate to the extent possible 
the transfers which would have occurred to such Trust Fund had such 
amendments not been enacted.
    (f) Application to Railroad Retirement Taxes.--For purposes of 
qualified employers that are employers under section 3231(a) of the 
Internal Revenue Code of 1986, subsections (a)(1) and (a)(2) of this 
section shall apply by substituting section 3221 for section 3111, and 
substituting the term ``compensation'' for ``wages'' as appropriate.

                    TITLE II--SURTAX ON MILLIONAIRES

SEC. 201. SURTAX ON MILLIONAIRES.

    (a) In General.--Subchapter A of chapter 1 of the Internal Revenue 
Code of 1986 is amended by adding at the end the following new part:

                  ``PART VIII--SURTAX ON MILLIONAIRES

``Sec. 59B. Surtax on millionaires.

``SEC. 59B. SURTAX ON MILLIONAIRES.

    ``(a) General Rule.--In the case of a taxpayer other than a 
corporation for any taxable year beginning after 2012, there is hereby 
imposed (in addition to any other tax imposed by this subtitle) a tax 
equal to 3.25 percent of so much of the modified adjusted gross income 
of the taxpayer for such taxable year as exceeds $1,000,000 ($500,000, 
in the case of a married individual filing a separate return).
    ``(b) Inflation Adjustment.--
            ``(1) In general.--In the case of any taxable year 
        beginning after 2013, each dollar amount under subsection (a) 
        shall be increased by an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                the taxable year begins, determined by substituting 
                `calendar year 2011' for `calendar year 1992' in 
                subparagraph (B) thereof.
            ``(2) Rounding.--If any amount as adjusted under paragraph 
        (1) is not a multiple of $10,000, such amount shall be rounded 
        to the next highest multiple of $10,000.
    ``(c) Modified Adjusted Gross Income.--For purposes of this 
section, the term `modified adjusted gross income' means adjusted gross 
income reduced by any deduction (not taken into account in determining 
adjusted gross income) allowed for investment interest (as defined in 
section 163(d)). In the case of an estate or trust, adjusted gross 
income shall be determined as provided in section 67(e).
    ``(d) Special Rules.--
            ``(1) Nonresident alien.--In the case of a nonresident 
        alien individual, only amounts taken into account in connection 
        with the tax imposed under section 871(b) shall be taken into 
        account under this section.
            ``(2) Citizens and residents living abroad.--The dollar 
        amount in effect under subsection (a) shall be decreased by the 
        excess of--
                    ``(A) the amounts excluded from the taxpayer's 
                gross income under section 911, over
                    ``(B) the amounts of any deductions or exclusions 
                disallowed under section 911(d)(6) with respect to the 
                amounts described in subparagraph (A).
            ``(3) Charitable trusts.--Subsection (a) shall not apply to 
        a trust all the unexpired interests in which are devoted to one 
        or more of the purposes described in section 170(c)(2)(B).
            ``(4) Not treated as tax imposed by this chapter for 
        certain purposes.--The tax imposed under this section shall not 
        be treated as tax imposed by this chapter for purposes of 
        determining the amount of any credit under this chapter or for 
        purposes of section 55.''.
    (b) Clerical Amendment.--The table of parts for subchapter A of 
chapter 1 of the Internal Revenue Code of 1986 is amended by adding at 
the end the following new item:

                ``part viii. surtax on millionaires.''.

    (c) Section 15 Not to Apply.--The amendment made by subsection (a) 
shall not be treated as a change in a rate of tax for purposes of 
section 15 of the Internal Revenue Code of 1986.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2012.
                                                       Calendar No. 238

112th CONGRESS

  1st Session

                                S. 1917

_______________________________________________________________________

                                 A BILL

    To create jobs by providing payroll tax relief for middle class 
            families and businesses, and for other purposes.

_______________________________________________________________________

                           November 29, 2011

            Read the second time and placed on the calendar