,i #aadth ,,congress #b;d ,session ,h4 ,r4 #egde ,,in ,,the ,,house ,,of ,,representatives ,july #ac1 #bjaf,mr4 ,de,fazio introduced the following bill2 which was referred to the ,committee on ,ways and ,means ,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 ,putting ,main ,street ,,first ,act or as the ,putting ,main ,street ,,first3 ,finishing ,irresponsible ,reckless ,speculative ,trading ,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 a security 7determined as of the time of the covered transaction71 and 7#b7 in the case of any payment with respect to a derivative1 the amount of such payment4 7d7 ,covered transaction ,for purposes of this section-- 7#a7 ,in general ,the term covered transaction means-- 7,a7 except as provided in subparagraph 7,b71 any purchase if-- 7i7 such purchase occurs on1 or is subject to the rules of1 a qualified board or exchange located in the ,united ,states1 or 7ii7 the purchaser or seller is a ,united ,states person1 and 7,b7 any transaction with respect to a derivative if-- 7i7 such derivative is traded on1 or is subject to the rules of1 a qualified board or exchange located in the ,united ,states1 or 7ii7 any party with rights under such derivative is a ,united ,states person4 7#b7 ,exceptions from tax 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-- 7i7 is traded on1 or is subject to the rules of1 a qualified board or exchange located in the ,united ,states1 and 7ii7 has a fixed maturity of not more than #ajj days1 shall not be treated as described in subsection 7e77#a77;,c74 7e7 ,definitions ,for purposes of this section-- 7#a7 ,security ,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 and 7,d7 any derivative4 7#b7 ,derivative 7,a7 ,in general ,the term derivative means any contract 7including any option1 forward contract1 futures contract1 short position1 swap1 or similar contract7 the value of which1 or any payment or other transfer with respect to which1 is 7directly or indirectly7 determined by reference to one or more of the following3 7i7 ,any security described in subparagraph 7,a71 7,b71 or 7,c7 of paragraph 7#a74 7ii7 ,any commodity which is actively traded 7within the meaning of section #ajib7;d77#a774 7iii7 ,any currency4 7iv7 ,any rate1 price1 amount1 index1 formula1 or algorithm4 7v7 ,any other item as the ,secretary may prescribe4 ,such term shall not include any item described in clauses 7i7 through 7v74 7,b7 ,exceptions from treatment as derivatives 7i7 ,securities lending1 sale-repurchase1 and similar financing transactions ,to the extent provided by the ,secretary1 the term derivative shall not include the right to the return of the same or substantially identical securities transferred in a securities lending transaction1 sale-repurchase transaction1 or similar financing transaction4 7ii7 ,insurance contracts1 annuities1 and endowments ,the term derivative shall not include any insurance1 annuity1 or endowment contract issued by an insurance company to which subchapter ,l applies 7or issued by any foreign corporation to which such subchapter would apply if such foreign corporation were a domestic corporation74 7#c7 ,qualified board or exchange ,the term qualified board or exchange has the meaning given such term by section #abef7;g77#g74 7f7 ,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 on1 or is subject to the rules of1 a qualified board or exchange located in the ,united ,states1 such qualified board or exchange1 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#a77;,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#a77;,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 7g7 ,treatment of exchanges and payments with respect to derivatives ,for purposes of this section-- 7#a7 ,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 7#b7 ,payments with respect to derivatives treated as separate transactions ,except as otherwise provided by the ,secretary1 any payment with respect any derivative shall be treated as a separate transaction for purposes of this section4 7h7 ,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 7f77#a7-- 7,a7 ,payment by ,united ,states shareholders ,any tax which would 7but for this paragraph7 be payable under subsection 7f77#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 7i7 ,administration ,the ,secretary shall carry out this section in consultation with the ,securities and ,exchange ,commission and the ,commodity ,futures ,trading ,commission4 7j7 ,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 ,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 #ebi71 qualified ,,able programs 7as defined in section #ebi;,a71 and ,coverdell education savings accounts 7as defined in section #ecj71 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 7c7 ,information reporting with respect to controlled foreign corporations ,section #fjch7;a77#a77;,b7 of such ,code is amended by inserting and transactions which are covered transactions for purposes of section #ddge by reason of the application of section #ddge7;h77#a7 to such corporation before the semicolon at the end4 7d7 ,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 7#c7 ,the table of subchapters for chapter #cf of such ,code 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 #bjag4