,,ii #aacth ,,congress #b;d ,session ,s4 #bafb ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,march #bf1 #bjad ,mrs4 ,murray 7for herself1 ,mr4 ,reed1 and ,mr4 ,brown7 introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf 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 workers1 and to provide for budget offsets4 #a4 ,short title ,this ,act may be cited as the #bast ,century ,worker ,tax ,cut ,act4 #b4 ,deduction for dual-earner families 7a7 ,in general ,part ,,vii of subchapter ,b of chapter #a of the ,internal ,revenue ,code of #aihf is amended by redesignating section #bbd as section #bbe and by inserting after section #bbc the following new section3 #bbd4 ,dual-earner families 7a7 ,deduction allowed ,in the case of an eligible taxpayer1 there shall be allowed as a deduction for the taxable year an amount equal to #bj percent of the lesser of-- 7#a7 #fj1jjj1 or 7#b7 the earned income of the spouse with the lower amount of earned income for such taxable year4 7b7 ,limitation ,the amount of the deduction allowable under subsection 7a7 shall be reduced 7but not below zero7 by an amount which bears the same ratio to the amount determined under subsection 7a7 7as determined without regard to this subsection7 as the amount of the taxpayer's excess adjusted gross income bears to #bj1jjj4 7c7 ,definitions ,in this section3 7#a7 ,earned income ,the term earned income has the same meaning given such term in section #cb7;c77#b74 7#b7 ,eligible taxpayer 7,a7 ,in general ,the term eligible taxpayer means a taxpayer who-- 7i7 files a joint return for the taxable year under section #fjac1 and 7ii7 has at least #a qualifying child 7as defined in section #aeb7;c77 who has not attained #ab years of age before the close of the taxable year4 7#c7 ,excess adjusted gross income ,the term excess adjusted gross income means the amount of the eligible taxpayer's adjusted gross income 7as defined in section #fb1 determined without regard to this section7 that exceeds #aaj1jjj for the taxable year4 7d7 ,inflation adjustment 7#a7 ,in general ,in the case of any taxable year beginning after #bjae1 each of the dollar amounts in subsections 7a77#a7 and 7c77#c7 shall be increased by an amount equal to-- 7,a7 such dollar amount1 multiplied by 7,b7 the cost-of-living adjustment determined under section #a7;f77#c7 for the calendar year in which the taxable year begins1 determined by substituting calendar year #bjad for calendar year #aiib in subparagraph 7,b7 thereof4 7#b7 ,rounding ,if any dollar amount in subsection 7a77#a7 or 7c77#c71 after being increased under paragraph 7#a71 is not a multiple of #a1jjj1 such dollar amount shall be rounded to the nearest multiple of #a1jjj4 7e7 ,additional eligibility requirements 7#a7 ,individual claiming benefits under section #iaa ,no deduction shall be allowed under this section if an individual 7or the individual's spouse7 claims the benefits of section #iaa for the taxable year4 7#b7 ,non-resident aliens ,no deduction shall be allowed under this section if an individual 7or the individual's spouse7 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 7g7 or 7h7 of section #fjac4 7#c7 ,identification number requirement 7,a7 ,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-- 7i7 the taxpayer identification number of the individual and the individual's spouse1 and 7ii7 the name1 age1 and taxpayer identification number of any qualifying children4 7,b7 ,social security numbers ,for purposes of this paragraph1 the term taxpayer identification number means a social security number issued to an individual by the ,social ,security ,administration 7other than a social security number issued pursuant to clause 7,,ii7 7or that portion of clause 7,,iii7 that relates to clause 7,,ii77 of section #bje7;c77#b77;,b77i7 of the ,social ,security ,act74 7f7 ,taxable year must be full taxable year ,except in the case of a taxable year closed by reason of the death of an individual1 no deduction shall be allowable under this section in the case of a taxable year covering a period of less than #ab months4 4 7b7 ,deduction allowed in computing adjusted gross income ,section #fb7;a7 of such ,code is amended by inserting after paragraph 7#ba7 the following new paragraph3 7#bb7 ,dual-earner families ,the deduction allowed by section #bbd4 4 7c7 ,enhancement of earned income tax credit ,section #cb of such ,code is amended-- 7#a7 in subsection 7a77#b77;,b71 by striking earned income and inserting modified earned income 7as defined in subsection 7c77#e771 and 7#b7 in subsection 7c71 by adding at the end the following new paragraph3 7#e7 ,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 #bbd for the taxable year4 4 7d7 ,conforming amendment ,the table of sections for part ,,vii of subchapter ,b of chapter #a of such ,code is amended by redesignating the item relating to section #bbd as relating to section #bbe and by inserting after the item relating to section #bbc the following3 ,sec4 #bbd4 ,dual-earner families4 4 7e7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after the date of the enactment of this ,act4 #c4 ,strengthening the earned income tax credit for individuals with no qualifying children 7a7 ,credit for certain individuals over age #ba 7#a7 ,in general ,paragraph 7#a7 of section #cb7;c7 of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new subparagraph3 7,g7 ,special rule for working individuals over age #bj and without qualifying child 7i7 ,in general ,in the case of an individual 7or1 if the individual is married1 either the individual or the individual's spouse7 who-- 7,i7 has attained the age of #ba but not attained age #be before the close of the taxable year1 and 7,,ii7 is not a full-time student at any time during the taxable year1 paragraph 7#a77;,a77ii77,,ii7 shall not apply for purposes of determining whether such individual is an eligible individual4 7ii7 ,student ,for purposes of this subparagraph1 an individual shall be considered a full-time student if such individual is carrying more than #a_/b the normal full-time work load for the course of study the individual is pursuing4 4 7#b7 ,information return matching ,not later than #a year after the date of the enactment of this ,act1 the ,secretary of the ,treasury shall develop and implement procedures for checking an individual's claim for a credit under section #cb of the ,internal ,revenue ,code of #aihf1 by reason of subsection 7c77#a77;,g7 thereof1 against any information return made with respect to such individual under section #fjej,s4 7b7 ,increased credit 7#a7 ,credit percentage and phaseout percentage ,the table contained in section #cb7;b77#a77;,a7 of such ,code is amended by striking #g4fe each place it appears and inserting #ae4c4 7#b7 ,earned income amount and phaseout amount 7,a7 ,in general ,the table contained in section #cb7;b77#b77;,a7 of such ,code is amended-- 7i7 by striking #d1bbj and inserting #h1hbj1 and 7ii7 by striking #e1bhj and inserting #aj1dbe4 7,b7 ,inflation adjustments ,subparagraph 7,b7 of section #cb7;j77#a7 of such ,code is amended-- 7i7 by inserting except as provided in clause 7iii7 in clause 7i7 before in the case of amounts1 7ii7 by striking and at the end of clause 7i71 by striking the period at the end of clause 7ii7 and inserting 1 and1 and by adding at the end the following new clause3 7iii7 in the case of the #h1hbj and #aj1dbe amounts in subsection 7b77#b77;,a71 by substituting calendar year #bjad for calendar year #aiib in subparagraph 7,b7 of such section #a4 4 7c7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after the date of the enactment of this ,act4 #d4 ,increased penalty for tax return preparers who fail to comply with due diligence requirements for the earned income tax credit 7a7 ,in general ,section #ffie7;g7 of the ,internal ,revenue ,code of #aihf is amended by striking #ejj and inserting #a1jjj4 7b7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after the date of the enactment of this ,act4 #e4 ,expansion of denial of deduction for certain excessive employee remuneration 7a7 ,application to all current and former employees 7#a7 ,in general ,section #afb7m7 of the ,internal ,revenue ,code of #aihf is amended-- 7,a7 by striking covered employee each place it appears in paragraphs 7#a7 and 7#d7 and inserting covered individual1 and 7,b7 by striking such employee each place it appears in subparagraphs 7,a7 and 7,g7 of paragraph 7#d7 and inserting such individual4 7#b7 ,covered individual ,paragraph 7#c7 of section #afb7m7 of such ,code is amended to read as follows3 7#c7 ,covered individual ,for purposes of this subsection1 the term covered individual means any individual who is an officer1 director1 or employee of the taxpayer or a former officer1 director1 or employee of the taxpayer4 4 7#c7 ,conforming amendments 7,a7 ,section #dh;,d7b77#c77;,a7 of such ,code is amended by inserting 7as in effect for taxable years beginning before ,january #a1 #bjae7 after section #afb7m77#c74 7,b7 ,section #dji;,a7b77#c77;,d77ii7 of such ,code is amended by inserting 7as in effect for taxable years beginning before ,january #a1 #bjae7 after section #afb7m77#c74 7b7 ,expansion of applicable employee remuneration 7#a7 ,elimination of exception for commission-based pay 7,a7 ,in general ,paragraph 7#d7 of section #afb7m7 of such ,code1 as amended by subsection 7a71 is amended by striking subparagraph 7,b7 and by redesignating subparagraphs 7,c7 through 7,g7 as subparagraphs 7,b7 through 7,f71 respectively4 7,b7 ,conforming amendments 7i7 ,section #afb7m77#e7 of such ,code is amended-- 7,i7 by striking subparagraphs 7,b71 7,c71 and 7,d7 thereof in subparagraph 7,e7 and inserting subparagraphs 7,b7 and 7,c7 thereof1 and 7,,ii7 by striking subparagraphs 7,f7 and 7,g7 in subparagraph 7,g7 and inserting subparagraphs 7,e7 and 7,f74 7ii7 ,section #afb7m77#f7 of such ,code is amended-- 7,i7 by striking subparagraphs 7,b71 7,c71 and 7,d7 thereof in subparagraph 7,d7 and inserting subparagraphs 7,b7 and 7,c7 thereof1 and 7,,ii7 by striking subparagraphs 7,f7 and 7,g7 in subparagraph 7,g7 and inserting subparagraphs 7,e7 and 7,f74 7#b7 ,inclusion of performance-based compensation 7,a7 ,in general ,paragraph 7#d7 of section #afb7m7 of the ,internal ,revenue ,code of #aihf1 as amended by subsection 7a7 and paragraph 7#a7 of this subsection1 is amended by striking subparagraph 7,b7 and redesignating subparagraphs 7,c7 through 7,f7 as subparagraphs 7,b7 through 7,e71 respectively4 7,b7 ,conforming amendments 7i7 ,section #afb7m77#e7 of such ,code1 as amended by paragraph 7#a71 is amended-- 7,i7 by striking subparagraphs 7,b7 and 7,c7 thereof in subparagraph 7,e7 and inserting subparagraph 7,b7 thereof1 and 7,,ii7 by striking subparagraphs 7,e7 and 7,f7 in subparagraph 7,g7 and inserting subparagraphs 7,d7 and 7,e74 7ii7 ,section #afb7m77#f7 of such ,code1 as amended by paragraph 7#a71 is amended-- 7,i7 by striking subparagraphs 7,b7 and 7,c7 thereof in subparagraph 7,d7 and inserting subparagraph 7,b7 thereof1 and 7,,ii7 by striking subparagraphs 7,e7 and 7,f7 in subparagraph 7,g7 and inserting subparagraphs 7,d7 and 7,e74 7c7 ,expansion of applicable employer ,paragraph 7#b7 of section #afb7m7 of the ,internal ,revenue ,code of #aihf is amended to read as follows3 7#b7 ,publicly held corporation ,for purposes of this subsection1 the term publicly held corporation means any corporation which is an issuer 7as defined in section #c of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;c77 that-- 7,a7 has a class of securities registered under section #ab of such ,act 7#ae ,u4,s4,c4 #ghl71 or 7,b7 is required to file reports under section #ae7;d7 of such ,act 7#ae ,u4,s4,c4 #ghj7;d774 4 7d7 ,regulatory authority 7#a7 ,in general ,section #afb7m7 of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new paragraph3 7#g7 ,regulations ,the ,secretary may prescribe such guidance1 rules1 or regulations1 including with respect to reporting1 as are necessary to carry out the purposes of this subsection4 4 7#b7 ,conforming amendment ,paragraph 7#f7 of section #afb7m7 of such ,code is amended by striking subparagraph 7,h74 7e7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjad4 #f4 ,low-taxed cross-border foreign income treated as subpart ,f income 7a7 ,in general ,subsection 7a7 of section #ieb of the ,internal ,revenue ,code of #aihf is amended by redesignating paragraphs 7#c71 7#d71 and 7#e7 as paragraphs 7#d71 7#e71 and 7#f71 respectively1 and by inserting after paragraph 7#b7 the following new paragraph3 7#c7 low-taxed cross-border income 7as defined under subsection 7e771 4 7b7 ,low-,taxed cross-,border income ,section #ieb of such ,code is amended by adding at the end the following new subsection3 7e7 ,low-,taxed cross-,border income 7#a7 ,in general ,for purposes of subsection 7a71 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-- 7,a7 such income was derived in the home country of the controlled foreign corporation1 or 7,b7 such income was subject to an effective rate of income tax imposed by a foreign country in excess of #ae percent4 7#b7 ,rules related to income derived in home country ,for purposes of paragraph 7#a77;,a71 income shall be treated as derived in the home country of a controlled foreign corporation only if-- 7,a7 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 organized1 7,b7 such corporation maintains an office or other fixed place of business in such country1 and 7,c7 such income is derived in connection with-- 7i7 property which is sold for use1 consumption1 or disposition in such country1 or 7ii7 services provided with respect to persons or property located in such country4 7#c7 ,rules related to determination of effective rate of foreign income tax 7,a7 ,country-by-country determination ,paragraph 7#a77;,b7 shall be applied-- 7i7 separately with respect to each foreign country in which a controlled foreign corporation conducts any trade or business1 and 7ii7 with respect to the aggregate gross income derived with respect to such country4 7,b7 ,treatment of losses ,for purposes of determining the effective rate of income tax imposed by any foreign country under paragraph 7#a77;,b7-- 7i7 such effective rate shall be determined without regard to any losses carried to the relevant taxable year1 and 7ii7 to the extent the income of the controlled foreign corporation reduces losses in the relevant taxable year1 such effective rate shall be treated as being the effective rate which would have been imposed on such income without regard to such losses4 7#d7 ,deductions to be taken into account ,the gross income of a controlled foreign corporation taken into account under this subsection shall be reduced1 under regulations prescribed by the ,secretary1 so as to take into account deductions 7including taxes7 properly allocable to such income4 4 7c7 ,effective date ,the amendments made by this section shall apply to taxable years of foreign corporations beginning after ,december #ca1 #bjad1 and to taxable years of ,united ,states shareholders in which or with which such taxable years of foreign corporations end4