,,ii #aacth ,,congress #ast ,session ,s4 #daj ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,february #bh1 #bjac ,mr4 ,harkin 7for himself1 ,mr4 ,whitehouse1 and ,mr4 ,sanders7 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 impose a tax on certain trading transactions4 #a4 ,short title ,this ,act may be cited as the ,wall ,street ,trading and ,speculators ,tax ,act4 #b4 ,transaction tax 7a7 ,in general ,chapter #cf of the ,internal ,revenue ,code of #aihf is amended by inserting after subchapter ,b the following new subchapter3 ,c ,tax on ,trading ,transactions ,sec4 #ddge4 ,tax on trading transactions4 #ddge4 ,tax on trading transactions 7a7 ,imposition of tax ,there is hereby imposed a tax on each covered transaction with respect to any security4 7b7 ,rate of tax ,the tax imposed under subsection 7a7 with respect to any covered transaction shall be #j4jc percent of the specified base amount with respect to such covered transaction4 7c7 ,specified base amount ,for purposes of this section1 the term specified base amount means-- 7#a7 except as provided in paragraph 7#b71 the fair market value of the security 7determined as of the time of the covered transaction71 and 7#b7 in the case of any payment described in subsection 7h71 the amount of such payment4 7d7 ,covered transaction ,for purposes of this section1 the term covered transaction means-- 7#a7 except as provided in paragraph 7#b71 any purchase if-- 7,a7 such purchase occurs or is cleared on a facility located in the ,united ,states1 or 7,b7 the purchaser or seller is a ,united ,states person1 and 7#b7 any transaction with respect to a security described in subparagraph 7,d71 7,e71 or 7,f7 of subsection 7e77#a71 if-- 7,a7 such security is traded or cleared on a facility located in the ,united ,states1 or 7,b7 any party with rights under such security is a ,united ,states person4 7e7 ,security and other definitions ,for purposes of this section-- 7#a7 ,in general ,the term security means-- 7,a7 any share of stock in a corporation1 7,b7 any partnership or beneficial ownership interest in a partnership or trust1 7,c7 any note1 bond1 debenture1 or other evidence of indebtedness1 7,d7 any evidence of an interest in1 or a derivative financial instrument with respect to1 any security or securities described in subparagraph 7,a71 7,b71 or 7,c71 7,e7 any derivative financial instrument with respect to any currency or commodity1 and 7,f7 any notional principal contract4 7#b7 ,derivative financial instrument ,the term derivative financial instrument includes any option1 forward contract1 futures contract1 or any similar financial instrument4 7#c7 ,notional principal contract ,except as otherwise provided by the ,secretary1 the term notional principal contract means any financial instrument which requires two or more payments at specified intervals calculated by reference to a specified index upon one or more notional principal amounts4 ,an amount shall not fail to be treated as a payment described in the preceding sentence merely because such amount is fixed on one date and paid or otherwise taken into account on a different date4 7#d7 ,specified index ,the term specified index means any #a or more of any combination of-- 7,a7 a fixed rate1 price1 or amount1 or 7,b7 a variable rate1 price1 or amount1 7,c7 any index based on any objectively determinable information 7including the occurrence or nonoccurrence of any event7 which is not within the control of any of the parties to the instrument and is not unique to any of the parties' circumstances1 and 7,d7 any other index as the ,secretary may prescribe4 7#e7 ,treatment of exchanges 7,a7 ,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 exchange4 7,b7 ,certain deemed exchanges ,in the case of a distribution treated as an exchange for stock under section #cjb or #cca1 the corporation making such distribution shall be treated as having purchased such stock for purposes of this section4 7f7 ,exceptions 7#a7 ,exception for initial issues ,no tax shall be imposed under subsection 7a7 on any covered transaction with respect to the initial issuance of any security described in subparagraph 7,a71 7,b71 or 7,c7 of subsection 7e77#a74 7#b7 ,exception for certain traded short-term indebtedness ,a note1 bond1 debenture1 or other evidence of indebtedness which-- 7,a7 is traded on a trading facility located in the ,united ,states1 and 7,b7 has a fixed maturity of not more than #ajj days1 shall not be treated as described in subsection 7e77#a77;,c74 7#c7 ,exception for securities lending arrangements ,no tax shall be imposed under subsection 7a7 on any covered transaction with respect to which gain or loss is not recognized by reason of section #ajeh4 7g7 ,by whom paid 7#a7 ,in general ,the tax imposed by this section shall be paid by-- 7,a7 in the case of a transaction which occurs or is cleared on a facility located in the ,united ,states1 such facility1 and 7,b7 in the case of a purchase not described in subparagraph 7,a7 which is executed by a broker 7as defined in section #fjde7;c77#a77 which is a ,united ,states person1 such broker4 7#b7 ,special rules for direct1 etc41 transactions ,in the case of any transaction to which paragraph 7#a7 does not apply1 the tax imposed by this section shall be paid by-- 7,a7 in the case of a transaction described in subsection 7d77#a7-- 7i7 the purchaser if the purchaser is a ,united ,states person1 and 7ii7 the seller if the purchaser is not a ,united ,states person1 and 7,b7 in the case of a transaction described in subsection 7d77#b7-- 7i7 the payor if the payor is a ,united ,states person1 and 7ii7 the payee if the payor is not a ,united ,states person4 7h7 ,certain payments treated as separate transactions ,except as otherwise provided by the ,secretary1 any payment with respect to a security described in subparagraph 7,d71 7,e71 or 7,f7 of subsection 7e77#a7 shall be treated as a separate transaction for purposes of this section1 including-- 7#a7 any net initial payment1 net final or terminating payment1 or net periodical payment with respect to a notional principal contract 7or similar financial instrument71 7#b7 any payment with respect to any forward contract 7or similar financial instrument71 and 7#c7 any premium paid with respect to any option 7or similar financial instrument74 7i7 ,application to transactions by controlled foreign corporations 7#a7 ,in general ,for purposes of this section1 a controlled foreign corporation shall be treated as a ,united ,states person4 7#b7 ,special rules for payment of tax on direct1 etc41 transactions ,in the case of any transaction which is a covered transaction solely by reason of paragraph 7#a7 and which is not described in subsection 7g77#a7-- 7,a7 ,payment by ,united ,states shareholders ,any tax which would 7but for this paragraph7 be payable under subsection 7g77#b7 by the controlled foreign corporation shall1 in lieu thereof1 be paid by the ,united ,states shareholders of such controlled foreign corporation as provided in subparagraph 7,b74 7,b7 ,pro rata shares ,each such ,united ,states shareholder shall pay the same proportion of such tax as-- 7i7 the stock which such ,united ,states shareholder owns 7within the meaning of section #ieh7;a77 in such controlled foreign corporation1 bears to 7ii7 the stock so owned by all ,united ,states shareholders in such controlled foreign corporation4 7,c7 ,definitions ,for purposes of this subsection1 the terms ,united ,states shareholder and controlled foreign corporation have the meanings given such terms in sections #iea7;b7 and #ieg7;a71 respectively4 7j7 ,administration ,the ,secretary shall carry out this section in consultation with the ,securities and ,exchange ,commission and the ,commodity ,futures ,trading ,commission4 7k7 ,guidance2 regulations ,the ,secretary shall-- 7#a7 provide guidance regarding such information reporting concerning covered transactions as the ,secretary deems appropriate1 and 7#b7 prescribe such regulations as are necessary or appropriate to prevent avoidance of the purposes of this section1 including the use of non-,united ,states persons in such transactions4 4 7b7 ,credit with respect to certain tax-,favored accounts ,to offset transaction tax 7#a7 ,in general ,subpart ,c of part ,,iv of subchapter ,a of chapter #a of such ,code is amended by inserting after section #cf;,b the following new section3 #cf;,c4 ,offset for transaction tax with respect to certain tax-favored accounts 7a7 ,in general ,there shall be allowed as a credit against the tax imposed by this subtitle for the taxable year an amount equal to #j4jc percent of the qualified tax-favored account contributions of the taxpayer for the taxable year4 7b7 ,qualified tax-,favored account contributions ,for purposes of this section1 the term qualified tax-favored account contributions means1 with respect to any taxable year1 the sum of-- 7#a7 with respect to qualified retirement plans 7as defined in section #digd7;c77 of the taxpayer1 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 7or1 in the case of a ,roth ,,ira 7as defined in section #djh;,a7b771 the amount contributed71 7#b7 with respect to ,archer ,m,s,as of the taxpayer1 the amount allowed as a deduction under section #bbj for such taxable year1 7#c7 with respect to health savings accounts of the taxpayer1 the amount allowed as a deduction under section #bbc for such taxable year1 plus 7#d7 with respect to qualified tuition programs 7as defined in section #ebi7 and ,coverdell education savings accounts 7as defined in section #ecj7 with respect to which the taxpayer is the designated beneficiary 7or1 in the case of a designated beneficiary with respect to whom another taxpayer is allowed a deduction under section #aea1 such other taxpayer in lieu of such designated beneficiary71 the amount contributed for such taxable year4 4 7#b7 ,conforming amendments 7,a7 ,section #acbd7;b77#b7 of title #ca1 ,united ,states ,code1 is amended by inserting 1 #cf;,c after #cf;,b4 7,b7 ,the table of sections for subpart ,c of part ,,iv of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf is amended by inserting before the item relating to section #cg the following new item3 ,sec4 #cf;,c4 ,offset for transaction tax on contributions to certain tax-favored accounts4 4 7c7 ,information reporting with respect to controlled foreign corporations ,subparagraph 7,b7 of section #fjch7;a77#a7 is amended by inserting and transactions which are covered transactions for purposes of section #ddge by reason of the application of section #ddge7;i77#a7 to such corporation before the semicolon at the end4 7d7 ,clerical amendment ,the table of subchapters for chapter #cf of the ,internal ,revenue ,code of #aihf is amended by inserting after the item relating to subchapter ,b the following new item3 ,subchapter ,c4 ,tax on trading transactions4 4 7e7 ,effective date ,the amendments made by this section shall apply to transactions after ,december #ca1 #bjac4