Millionaires Surtax Act

II 117TH CONGRESS 1ST SESSION S. 2028 To amend the Internal Revenue Code of 1986 to impose a surtax on high income individuals. IN THE SENATE OF THE UNITED STATES JUNE 10, 2021 Mr. VAN HOLLEN (for himself, Mr. BROWN, Ms. KLOBUCHAR, and Mr. MERKLEY) introduced the following bill; which was read twice and re- ferred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to impose a surtax on high income individuals. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Millionaires Surtax 4 Act’’. 5 SEC. 2. SURCHARGE ON HIGH INCOME INDIVIDUALS. 6 (a) IN GENERAL.—Subchapter A of chapter 1 of the 7 Internal Revenue Code of 1986 is amended by adding at 8 the end the following new part: 9 VerDate Sep 11 2014 07:03 Jun 23, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S2028.IS S2028 kjohnson on DSK79L0C42PROD with BILLS 2 •S 2028 IS ‘‘PART VIII—SURCHARGE ON HIGH INCOME 1 INDIVIDUALS 2 ‘‘Sec. 59B. Surcharge on high income individuals. ‘‘SEC. 59B. SURCHARGE ON HIGH INCOME INDIVIDUALS. 3 ‘‘(a) GENERAL RULE.—In the case of a taxpayer 4 other than a corporation, there is hereby imposed (in addi- 5 tion to any other tax imposed by this subtitle) a tax equal 6 to 10 percent of so much of the modified adjusted gross 7 income of the taxpayer as exceeds $2,000,000. 8 ‘‘(b) TAXPAYERS NOT MAKING A JOINT RETURN.— 9 In the case of any taxpayer other than a taxpayer making 10 a joint return under section 6013 or a surviving spouse 11 (as defined in section 2(a)), subsection (a) shall be applied 12 by substituting ‘$1,000,000’ for ‘$2,000,000’. 13 ‘‘(c) MODIFIED ADJUSTED GROSS INCOME.—For 14 purposes of this section, the term ‘modified adjusted gross 15 income’ means adjusted gross income reduced by any de- 16 duction (not taken into account in determining adjusted 17 gross income) allowed for investment interest (as defined 18 in section 163(d)). In the case of an estate or trust, ad- 19 justed gross income shall be determined as provided in sec- 20 tion 67(e). 21 ‘‘(d) SPECIAL RULES.— 22 ‘‘(1) NONRESIDENT ALIEN.—In the case of a 23 nonresident alien individual, only amounts taken 24 into account in connection with the tax imposed 25 VerDate Sep 11 2014 07:03 Jun 23, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2028.IS S2028 kjohnson on DSK79L0C42PROD with BILLS 3 •S 2028 IS under section 871(b) shall be taken into account 1 under this section. 2 ‘‘(2) CITIZENS AND RESIDENTS LIVING 3 ABROAD.—The dollar amount in effect under sub- 4 section (a) (after the application of subsection (b)) 5 shall be decreased by the excess of— 6 ‘‘(A) the amounts excluded from the tax- 7 payer’s gross income under section 911, over 8 ‘‘(B) the amounts of any deductions or ex- 9 clusions disallowed under section 911(d)(6) 10 with respect to the amounts described in sub- 11 paragraph (A). 12 ‘‘(3) CHARITABLE TRUSTS.—Subsection (a) 13 shall not apply to a trust all the unexpired interests 14 in which are devoted to one or more of the purposes 15 described in section 170(c)(2)(B). 16 ‘‘(4) NOT TREATED AS TAX IMPOSED BY THIS 17 CHAPTER FOR CERTAIN PURPOSES.—The tax im- 18 posed under this section shall not be treated as tax 19 imposed by this chapter for purposes of determining 20 the amount of any credit under this chapter or for 21 purposes of section 55.’’. 22 (b) CLERICAL AMENDMENT.—The table of parts for 23 subchapter A of chapter 1 of the Internal Revenue Code 24 VerDate Sep 11 2014 07:03 Jun 23, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2028.IS S2028 kjohnson on DSK79L0C42PROD with BILLS 4 •S 2028 IS of 1986 is amended by adding at the end the following 1 new item: 2 ‘‘PART VIII—SURCHARGE ON HIGH INCOME INDIVIDUALS’’. (c) SECTION 15 NOT TO APPLY.—The amendment 3 made by subsection (a) shall not be treated as a change 4 in a rate of tax for purposes of section 15 of the Internal 5 Revenue Code of 1986. 6 (d) EFFECTIVE DATE.—The amendments made by 7 this section shall apply to taxable years beginning after 8 December 31, 2021. 9 Æ VerDate Sep 11 2014 07:03 Jun 23, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6301 E:\BILLS\S2028.IS S2028 kjohnson on DSK79L0C42PROD with BILLS