[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 2162 Introduced in Senate (IS)]

113th CONGRESS
  2d Session
                                S. 2162

To amend the Internal Revenue Code of 1986 to establish a deduction for 
 married couples who are both employed and have young children and to 
  increase the earned income tax credit for childless workers, and to 
                      provide for budget offsets.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 26, 2014

   Mrs. Murray (for herself, Mr. Reed, and Mr. Brown) introduced the 
 following bill; which was read twice and referred to the Committee on 
                                Finance

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to establish a deduction for 
 married couples who are both employed and have young children and to 
  increase the earned income tax credit for childless workers, and to 
                      provide for budget offsets.

    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 ``21<SUP>st</SUP> Century Worker Tax 
Cut Act''.

SEC. 2. DEDUCTION FOR DUAL-EARNER FAMILIES.

    (a) In General.--Part VII of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 is amended by redesignating section 224 
as section 225 and by inserting after section 223 the following new 
section:

``SEC. 224. DUAL-EARNER FAMILIES.

    ``(a) Deduction Allowed.--In the case of an eligible taxpayer, 
there shall be allowed as a deduction for the taxable year an amount 
equal to 20 percent of the lesser of--
            ``(1) $60,000, or
            ``(2) the earned income of the spouse with the lower amount 
        of earned income for such taxable year.
    ``(b) Limitation.--The amount of the deduction allowable under 
subsection (a) shall be reduced (but not below zero) by an amount which 
bears the same ratio to the amount determined under subsection (a) (as 
determined without regard to this subsection) as the amount of the 
taxpayer's excess adjusted gross income bears to $20,000.
    ``(c) Definitions.--In this section:
            ``(1) Earned income.--The term `earned income' has the same 
        meaning given such term in section 32(c)(2).
            ``(2) Eligible taxpayer.--
                    ``(A) In general.--The term `eligible taxpayer' 
                means a taxpayer who--
                            ``(i) files a joint return for the taxable 
                        year under section 6013, and
                            ``(ii) has at least 1 qualifying child (as 
                        defined in section 152(c)) who has not attained 
                        12 years of age before the close of the taxable 
                        year.
            ``(3) Excess adjusted gross income.--The term `excess 
        adjusted gross income' means the amount of the eligible 
        taxpayer's adjusted gross income (as defined in section 62, 
        determined without regard to this section) that exceeds 
        $110,000 for the taxable year.
    ``(d) Inflation Adjustment.--
            ``(1) In general.--In the case of any taxable year 
        beginning after 2015, each of the dollar amounts in subsections 
        (a)(1) and (c)(3) 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 2014' for `calendar year 1992' in 
                subparagraph (B) thereof.
            ``(2) Rounding.--If any dollar amount in subsection (a)(1) 
        or (c)(3), after being increased under paragraph (1), is not a 
        multiple of $1,000, such dollar amount shall be rounded to the 
        nearest multiple of $1,000.
    ``(e) Additional Eligibility Requirements.--
            ``(1) Individual claiming benefits under section 911.--No 
        deduction shall be allowed under this section if an individual 
        (or the individual's spouse) claims the benefits of section 911 
        for the taxable year.
            ``(2) Non-resident aliens.--No deduction shall be allowed 
        under this section if an individual (or the individual's 
        spouse) is a nonresident alien individual for any portion of 
        the taxable year unless such individual is treated for such 
        taxable year as a resident of the United States for purposes of 
        this chapter by reason of an election under subsection (g) or 
        (h) of section 6013.
            ``(3) Identification number requirement.--
                    ``(A) In general.--No deduction shall be allowed 
                under this section if the eligible taxpayer does not 
                include on the joint return of tax for the taxable 
                year--
                            ``(i) the taxpayer identification number of 
                        the individual and the individual's spouse, and
                            ``(ii) the name, age, and taxpayer 
                        identification number of any qualifying 
                        children.
                    ``(B) Social security numbers.--For purposes of 
                this paragraph, the term `taxpayer identification 
                number' means a social security number issued to an 
                individual by the Social Security Administration (other 
                than a social security number issued pursuant to clause 
                (II) (or that portion of clause (III) that relates to 
                clause (II)) of section 205(c)(2)(B)(i) of the Social 
                Security Act).
    ``(f) Taxable Year Must Be Full Taxable Year.--Except in the case 
of a taxable year closed by reason of the death of an individual, no 
deduction shall be allowable under this section in the case of a 
taxable year covering a period of less than 12 months.''.
    (b) Deduction Allowed in Computing Adjusted Gross Income.--Section 
62(a) of such Code is amended by inserting after paragraph (21) the 
following new paragraph:
            ``(22) Dual-earner families.--The deduction allowed by 
        section 224.''.
    (c) Enhancement of Earned Income Tax Credit.--Section 32 of such 
Code is amended--
            (1) in subsection (a)(2)(B), by striking ``earned income'' 
        and inserting ``modified earned income (as defined in 
        subsection (c)(5))'', and
            (2) in subsection (c), by adding at the end the following 
        new paragraph:
            ``(5) Modified earned income.--The term `modified earned 
        income' means an amount equal to the earned income of the 
        taxpayer minus the amount of any deduction allowed to the 
        taxpayer under section 224 for the taxable year.''.
    (d) Conforming Amendment.--The table of sections for part VII of 
subchapter B of chapter 1 of such Code is amended by redesignating the 
item relating to section 224 as relating to section 225 and by 
inserting after the item relating to section 223 the following:

``Sec. 224. Dual-earner families.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 3. STRENGTHENING THE EARNED INCOME TAX CREDIT FOR INDIVIDUALS WITH 
              NO QUALIFYING CHILDREN.

    (a) Credit for Certain Individuals Over Age 21.--
            (1) In general.--Paragraph (1) of section 32(c) of the 
        Internal Revenue Code of 1986 is amended by adding at the end 
        the following new subparagraph:
                    ``(G) Special rule for working individuals over age 
                20 and without qualifying child.--
                            ``(i) In general.--In the case of an 
                        individual (or, if the individual is married, 
                        either the individual or the individual's 
                        spouse) who--
                                    ``(I) has attained the age of 21 
                                but not attained age 25 before the 
                                close of the taxable year, and
                                    ``(II) is not a full-time student 
                                at any time during the taxable year,
                        paragraph (1)(A)(ii)(II) shall not apply for 
                        purposes of determining whether such individual 
                        is an eligible individual.
                            ``(ii) Student.--For purposes of this 
                        subparagraph, an individual shall be considered 
                        a full-time student if such individual is 
                        carrying more than \1/2\ the normal full-time 
                        work load for the course of study the 
                        individual is pursuing.''.
            (2) Information return matching.--Not later than 1 year 
        after the date of the enactment of this Act, the Secretary of 
        the Treasury shall develop and implement procedures for 
        checking an individual's claim for a credit under section 32 of 
        the Internal Revenue Code of 1986, by reason of subsection 
        (c)(1)(G) thereof, against any information return made with 
        respect to such individual under section 6050S.
    (b) Increased Credit.--
            (1) Credit percentage and phaseout percentage.--The table 
        contained in section 32(b)(1)(A) of such Code is amended by 
        striking ``7.65'' each place it appears and inserting ``15.3''.
            (2) Earned income amount and phaseout amount.--
                    (A) In general.--The table contained in section 
                32(b)(2)(A) of such Code is amended--
                            (i) by striking ``$4,220'' and inserting 
                        ``$8,820'', and
                            (ii) by striking ``$5,280'' and inserting 
                        ``$10,425''.
                    (B) Inflation adjustments.--Subparagraph (B) of 
                section 32(j)(1) of such Code is amended--
                            (i) by inserting ``except as provided in 
                        clause (iii)'' in clause (i) before ``in the 
                        case of amounts'',
                            (ii) by striking ``and'' at the end of 
                        clause (i), by striking the period at the end 
                        of clause (ii) and inserting ``, and'', and by 
                        adding at the end the following new clause:
                            ``(iii) in the case of the $8,820 and 
                        $10,425 amounts in subsection (b)(2)(A), by 
                        substituting `calendar year 2014' for `calendar 
                        year 1992' in subparagraph (B) of such section 
                        1.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 4. INCREASED PENALTY FOR TAX RETURN PREPARERS WHO FAIL TO COMPLY 
              WITH DUE DILIGENCE REQUIREMENTS FOR THE EARNED INCOME TAX 
              CREDIT.

    (a) In General.--Section 6695(g) of the Internal Revenue Code of 
1986 is amended by striking ``$500'' and inserting ``$1,000''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 5. EXPANSION OF DENIAL OF DEDUCTION FOR CERTAIN EXCESSIVE EMPLOYEE 
              REMUNERATION.

    (a) Application to All Current and Former Employees.--
            (1) In general.--Section 162(m) of the Internal Revenue 
        Code of 1986 is amended--
                    (A) by striking ``covered employee'' each place it 
                appears in paragraphs (1) and (4) and inserting 
                ``covered individual'', and
                    (B) by striking ``such employee'' each place it 
                appears in subparagraphs (A) and (G) of paragraph (4) 
                and inserting ``such individual''.
            (2) Covered individual.--Paragraph (3) of section 162(m) of 
        such Code is amended to read as follows:
            ``(3) Covered individual.--For purposes of this subsection, 
        the term `covered individual' means any individual who is an 
        officer, director, or employee of the taxpayer or a former 
        officer, director, or employee of the taxpayer.''.
            (3) Conforming amendments.--
                    (A) Section 48D(b)(3)(A) of such Code is amended by 
                inserting ``(as in effect for taxable years beginning 
                before January 1, 2015)'' after ``section 162(m)(3)''.
                    (B) Section 409A(b)(3)(D)(ii) of such Code is 
                amended by inserting ``(as in effect for taxable years 
                beginning before January 1, 2015)'' after ``section 
                162(m)(3)''.
    (b) Expansion of Applicable Employee Remuneration.--
            (1) Elimination of exception for commission-based pay.--
                    (A) In general.--Paragraph (4) of section 162(m) of 
                such Code, as amended by subsection (a), is amended by 
                striking subparagraph (B) and by redesignating 
                subparagraphs (C) through (G) as subparagraphs (B) 
                through (F), respectively.
                    (B) Conforming amendments.--
                            (i) Section 162(m)(5) of such Code is 
                        amended--
                                    (I) by striking ``subparagraphs 
                                (B), (C), and (D) thereof'' in 
                                subparagraph (E) and inserting 
                                ``subparagraphs (B) and (C) thereof'', 
                                and
                                    (II) by striking ``subparagraphs 
                                (F) and (G)'' in subparagraph (G) and 
                                inserting ``subparagraphs (E) and 
                                (F)''.
                            (ii) Section 162(m)(6) of such Code is 
                        amended--
                                    (I) by striking ``subparagraphs 
                                (B), (C), and (D) thereof'' in 
                                subparagraph (D) and inserting 
                                ``subparagraphs (B) and (C) thereof'', 
                                and
                                    (II) by striking ``subparagraphs 
                                (F) and (G)'' in subparagraph (G) and 
                                inserting ``subparagraphs (E) and 
                                (F)''.
            (2) Inclusion of performance-based compensation.--
                    (A) In general.--Paragraph (4) of section 162(m) of 
                the Internal Revenue Code of 1986, as amended by 
                subsection (a) and paragraph (1) of this subsection, is 
                amended by striking subparagraph (B) and redesignating 
                subparagraphs (C) through (F) as subparagraphs (B) 
                through (E), respectively.
                    (B) Conforming amendments.--
                            (i) Section 162(m)(5) of such Code, as 
                        amended by paragraph (1), is amended--
                                    (I) by striking ``subparagraphs (B) 
                                and (C) thereof'' in subparagraph (E) 
                                and inserting ``subparagraph (B) 
                                thereof'', and
                                    (II) by striking ``subparagraphs 
                                (E) and (F)'' in subparagraph (G) and 
                                inserting ``subparagraphs (D) and 
                                (E)''.
                            (ii) Section 162(m)(6) of such Code, as 
                        amended by paragraph (1), is amended--
                                    (I) by striking ``subparagraphs (B) 
                                and (C) thereof'' in subparagraph (D) 
                                and inserting ``subparagraph (B) 
                                thereof'', and
                                    (II) by striking ``subparagraphs 
                                (E) and (F)'' in subparagraph (G) and 
                                inserting ``subparagraphs (D) and 
                                (E)''.
    (c) Expansion of Applicable Employer.--Paragraph (2) of section 
162(m) of the Internal Revenue Code of 1986 is amended to read as 
follows:
            ``(2) Publicly held corporation.--For purposes of this 
        subsection, the term `publicly held corporation' means any 
        corporation which is an issuer (as defined in section 3 of the 
        Securities Exchange Act of 1934 (15 U.S.C. 78c)) that--
                    ``(A) has a class of securities registered under 
                section 12 of such Act (15 U.S.C. 78l), or
                    ``(B) is required to file reports under section 
                15(d) of such Act (15 U.S.C. 780(d)).''.
    (d) Regulatory Authority.--
            (1) In general.--Section 162(m) of the Internal Revenue 
        Code of 1986 is amended by adding at the end the following new 
        paragraph:
            ``(7) Regulations.--The Secretary may prescribe such 
        guidance, rules, or regulations, including with respect to 
        reporting, as are necessary to carry out the purposes of this 
        subsection.''.
            (2) Conforming amendment.--Paragraph (6) of section 162(m) 
        of such Code is amended by striking subparagraph (H).
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2014.

SEC. 6. LOW-TAXED CROSS-BORDER FOREIGN INCOME TREATED AS SUBPART F 
              INCOME.

    (a) In General.--Subsection (a) of section 952 of the Internal 
Revenue Code of 1986 is amended by redesignating paragraphs (3), (4), 
and (5) as paragraphs (4), (5), and (6), respectively, and by inserting 
after paragraph (2) the following new paragraph:
            ``(3) low-taxed cross-border income (as defined under 
        subsection (e)),''.
    (b) Low-Taxed Cross-Border Income.--Section 952 of such Code is 
amended by adding at the end the following new subsection:
    ``(e) Low-Taxed Cross-Border Income.--
            ``(1) In general.--For purposes of subsection (a), the term 
        `low-taxed cross-border income' means the gross income of the 
        controlled foreign corporation unless the taxpayer establishes 
        to the satisfaction of the Secretary that--
                    ``(A) such income was derived in the home country 
                of the controlled foreign corporation, or
                    ``(B) such income was subject to an effective rate 
                of income tax imposed by a foreign country in excess of 
                15 percent.
            ``(2) Rules related to income derived in home country.--For 
        purposes of paragraph (1)(A), income shall be treated as 
        derived in the home country of a controlled foreign corporation 
        only if--
                    ``(A) such income is derived in the conduct of a 
                trade or business of such corporation in the country in 
                which such corporation is created or organized,
                    ``(B) such corporation maintains an office or other 
                fixed place of business in such country, and
                    ``(C) such income is derived in connection with--
                            ``(i) property which is sold for use, 
                        consumption, or disposition in such country, or
                            ``(ii) services provided with respect to 
                        persons or property located in such country.
            ``(3) Rules related to determination of effective rate of 
        foreign income tax.--
                    ``(A) Country-by-country determination.--Paragraph 
                (1)(B) shall be applied--
                            ``(i) separately with respect to each 
                        foreign country in which a controlled foreign 
                        corporation conducts any trade or business, and
                            ``(ii) with respect to the aggregate gross 
                        income derived with respect to such country.
                    ``(B) Treatment of losses.--For purposes of 
                determining the effective rate of income tax imposed by 
                any foreign country under paragraph (1)(B)--
                            ``(i) such effective rate shall be 
                        determined without regard to any losses carried 
                        to the relevant taxable year, and
                            ``(ii) to the extent the income of the 
                        controlled foreign corporation reduces losses 
                        in the relevant taxable year, such effective 
                        rate shall be treated as being the effective 
                        rate which would have been imposed on such 
                        income without regard to such losses.
            ``(4) Deductions to be taken into account.--The gross 
        income of a controlled foreign corporation taken into account 
        under this subsection shall be reduced, under regulations 
        prescribed by the Secretary, so as to take into account 
        deductions (including taxes) properly allocable to such 
        income.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years of foreign corporations beginning after December 
31, 2014, and to taxable years of United States shareholders in which 
or with which such taxable years of foreign corporations end.
                                 <all>