1.This Act may be cited as the
Emergency Deficit Reduction
Act
.
2.The Senate finds the following:
(1)At a time when our Nation has a $14.2
trillion national debt and a $1.6 trillion annual deficit, moving aggressively
toward deficit reduction means that we must include not only well-targeted
budget cuts, but revenue raised in a fair and economically just way. Questions
every Member of Congress should be asking are the following:
(A)Do we ask the highest paid executives on
Wall Street to give up a $1 million a year tax break, or do we ask senior
citizens to go cold in the winter by cutting the Low Income Home Energy
Assistance Program?
(B)Do we ask Exxon Mobil and other big oil
companies to give up their tax breaks, or do we ask over 9 million college
students to go further into debt by cutting Pell Grants by $5.7 billion?
(C)Do we stop cutting taxes for the richest
400 American families, who earned an average of $345 million in 2007, or do we
delay Social Security benefits to 500,000 Americans by a $1.7 billion cut in
the Social Security Administration?
(D)Do we establish an emergency deficit
reduction surtax on millionaires and billionaires, or do we deny over 200,000
little children the opportunity to enroll in Head Start by cutting this program
by $1.1 billion?
(E)Do we finally tax hedge fund managers who
make at least $1 billion at a higher rate than police officers, teachers,
firefighters, and nurses, or will 11 million Americans be denied access to
quality primary healthcare by a $1.3 billion cut in community health
centers?
(2)At a time when the wealthiest people in
this country are doing phenomenally well, when the effective Federal tax rates
for the richest Americans are the lowest on record, and when the top 2 percent
of taxpayers have received hundreds of billions of dollars in tax breaks in
recent years, it would be morally wrong for the United States Congress to move
towards a balanced budget on the backs of the middle class, the elderly, the
sick, and the most vulnerable people in our society while asking nothing of the
highest income earners and most profitable corporations.
(3)Creating an emergency deficit reduction
surtax on income over $1 million will reduce the deficit in a fair and
economically just way by increasing revenue from those who can afford it the
most.
(4)From 2000 to 2010, the 5 largest oil
companies in the United States made nearly $1 trillion in profits, yet some of
them paid nothing in Federal income taxes in recent years. Ending outdated and
unnecessary tax credits, deductions, and subsidies for big oil companies is a
fair and economically just way to raise revenue and reduce the deficit.
(5)In the midst of the worst recession since
the Great Depression, America's middle class and working families have already
paid a very heavy price in terms of lost jobs, lost homes, lost wages, and lost
opportunity. The time has come to ask the wealthiest in our society and the
most profitable corporations in America to help our Nation address its deficit
crisis. Any deficit reduction package must include raising revenue from the
wealthy and eliminating tax breaks for big oil companies.
3.Emergency deficit
reduction surcharge on high income individuals
(a)Subchapter A of
chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end
the following new part:
VIIIEmergency
deficit reduction surcharge on high income individuals
Sec. 59B. Emergency deficit reduction surcharge on high income
individuals.
59B.Emergency
deficit reduction surcharge on high income individuals
(a)In the case of a taxpayer other than a corporation, there is
hereby imposed (in addition to any other tax imposed by this subtitle) a tax
equal to 5.4 percent of so much of the modified adjusted gross income of the
taxpayer as exceeds $1,000,000 ($2,000,000 in the case of any taxpayer making a
joint return under section 6013).
(b)Modified
adjusted gross incomeFor 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).
(c)
(1)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 abroadThe 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)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 purposesThe 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)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. Emergency deficit reduction
surcharge on high income
individuals.
.
(c)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)The amendments made by this section shall apply to taxable
years beginning after December 31, 2010.
4.Repeal of expensing
and 60-month amortization of intangible drilling costsSubsection (c) of section 263 of the
Internal Revenue Code of 1986 is amended by striking the period at the end of
the third sentence and inserting , or to any costs paid or incurred
after December 31, 2010.
.
5.Repeal of percentage
depletion for oil and gas wells
(a)Section 613 of the Internal Revenue Code of 1986 is
amended by adding at the end the following new subsection:
(f)Termination of
percentage depletion for oil and gas propertiesIn the case of
oil and gas properties, this section shall not apply to any taxable year
beginning after December 31,
2010.
.
(b)Limitations on
percentage depletion in case of oil and gas wellsSection 613A of
the Internal Revenue Code of 1986 is amended by adding at the end the following
new subsection:
(f)This
section shall not apply to any taxable year beginning after December 31,
2010.
.
6.Denial of
deduction for income attributable to domestic production of oil, natural gas,
or primary products thereof
(a)Subparagraph (B) of
section
199(c)(4) of the Internal Revenue Code of 1986 is amended by
striking or
at the end of clause (ii), by striking the period at
the end of clause (iii) and inserting , or
, and by inserting
after clause (iii) the following new clause:
(iv)the production, refining, processing,
transportation, or distribution of oil, natural gas, or any primary product
thereof.
.
(b)Section 199(c)(4)(B) of the Internal Revenue Code of 1986
is amended by adding at the end the following flush sentence:
For
purposes of clause (iv), the term primary product has the same
meaning as when used in section 927(a)(2)(C), as in effect before its
repeal..
(c)
(1)Section 199(c)(4)
of the Internal Revenue Code of 1986 is amended—
(A)in subparagraph (A)(i)(III) by striking
electricity, natural gas,
and inserting
electricity
, and
(B)in subparagraph (B)(ii) by striking
electricity, natural gas,
and inserting
electricity
.
(2)Section 199(d) of
such Code is amended by striking paragraph (9) and by redesignating paragraph
(10) as paragraph (9).
(d)The amendments made by this section shall apply to taxable
years beginning after December 31, 2010.