Tax Equity Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 2272 To amend the Internal Revenue Code of 1986 to provide for adjustments in the individual income tax rates to reflect regional differences in the cost-of-living. IN THE HOUSE OF REPRESENTATIVES APRIL 10, 2019 Mr. NADLER (for himself, Mrs. LOWEY, and Mr. SUOZZI) introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to provide for adjustments in the individual income tax rates to reflect regional differences in the cost-of-living. 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 ‘‘Tax Equity Act of 4 2019’’. 5 VerDate Sep 11 2014 21:38 Apr 22, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2272.IH H2272 pamtmann on DSKBFK8HB2PROD with BILLS 2 •HR 2272 IH SEC. 2. REGIONAL COST-OF-LIVING ADJUSTMENTS IN INDI- 1 VIDUAL INCOME TAX RATES. 2 (a) GENERAL RULE.—Subsection (f) of section 1 of 3 the Internal Revenue Code of 1986 is amended by adding 4 at the end thereof the following new paragraphs: 5 ‘‘(9) REGIONAL COST-OF-LIVING ADJUST- 6 MENTS.— 7 ‘‘(A) IN GENERAL.—In the case of an indi- 8 vidual, for taxable years beginning after 2019 9 the rate table otherwise in effect under this sec- 10 tion for any taxable year (determined after the 11 application of paragraph (1)) shall be further 12 adjusted as provided in subparagraph (B). 13 ‘‘(B) METHOD OF MAKING REGIONAL AD- 14 JUSTMENT.—The rate table otherwise in effect 15 under this section with respect to any individual 16 for any taxable year shall be adjusted as fol- 17 lows: 18 ‘‘(i) The minimum and maximum dol- 19 lar amounts otherwise in effect for each 20 rate bracket shall be multiplied by the ap- 21 plicable multiplier (for the calendar year in 22 which the taxable year begins) which ap- 23 plies to the statistical area in which the in- 24 dividual’s primary place of abode during 25 the taxable year is located. 26 VerDate Sep 11 2014 21:38 Apr 22, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2272.IH H2272 pamtmann on DSKBFK8HB2PROD with BILLS 3 •HR 2272 IH ‘‘(ii) The rate applicable to any rate 1 bracket (as adjusted by clause (i)) shall 2 not be changed. 3 ‘‘(iii) The amount setting forth the 4 tax shall be adjusted to the extent nec- 5 essary to reflect the adjustments in the 6 rate brackets. 7 If any amount determined under clause (i) is 8 not a multiple of $50, such amount shall be 9 rounded to the nearest multiple of $50. 10 ‘‘(10) DETERMINATION OF MULTIPLIERS.— 11 ‘‘(A) IN GENERAL.—Not later than De- 12 cember 15 of each calendar year, the Secretary 13 shall prescribe an applicable multiplier for each 14 statistical area of the United States which shall 15 apply to taxable years beginning during the suc- 16 ceeding calendar year. 17 ‘‘(B) DETERMINATION OF MULTIPLIERS.— 18 ‘‘(i) For each statistical area where 19 the cost-of-living differential for any cal- 20 endar year is greater than 125 percent, the 21 applicable multiplier for such calendar year 22 is 90 percent of such differential. 23 ‘‘(ii) For each statistical area where 24 the cost-of-living differential for any cal- 25 VerDate Sep 11 2014 21:38 Apr 22, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2272.IH H2272 pamtmann on DSKBFK8HB2PROD with BILLS 4 •HR 2272 IH endar year exceeds 97 percent but does not 1 exceed 125 percent, the applicable multi- 2 plier for such calendar year is 1.05. 3 ‘‘(iii) For each statistical area not de- 4 scribed in clause (i) or (ii), the applicable 5 multiplier is the cost-of-living differential 6 for the calendar year. 7 ‘‘(C) COST-OF-LIVING DIFFERENTIAL.— 8 The cost-of-living differential for any statistical 9 area for any calendar year is the percentage de- 10 termined by dividing— 11 ‘‘(i) the cost-of-living for such area for 12 the preceding calendar year; by 13 ‘‘(ii) the average cost-of-living for the 14 United States for the preceding calendar 15 year. 16 ‘‘(D) COST-OF-LIVING FOR AREA.— 17 ‘‘(i) IN GENERAL.—For calendar year 18 2019 and each calendar year thereafter, 19 the Secretary of Labor shall determine and 20 publish a cost-of-living index for each sta- 21 tistical area. 22 ‘‘(ii) METHODOLOGY.—The cost-of-liv- 23 ing index determined under clause (i) for 24 any statistical area for any calendar year 25 VerDate Sep 11 2014 21:38 Apr 22, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2272.IH H2272 pamtmann on DSKBFK8HB2PROD with BILLS 5 •HR 2272 IH shall be based on average market prices for 1 the area for the 12-month period ending 2 on August 31 of such calendar year. The 3 market prices taken into account under the 4 preceding sentence shall be selected and 5 used under the same methodology as is 6 used by the Secretary of Labor in devel- 7 oping the Consumer Price Index for All 8 Urban Consumers. 9 ‘‘(E) STATISTICAL AREA.—For purposes of 10 this subsection the term ‘statistical area’ 11 means— 12 ‘‘(i) any metropolitan statistical area 13 as defined by the Secretary of Commerce, 14 and 15 ‘‘(ii) the portion of any State not 16 within a metropolitan statistical area as so 17 defined. 18 ‘‘(11) AREAS OUTSIDE THE UNITED STATES.— 19 The area applicable multiplier for any area outside 20 the United States shall be 1.’’. 21 (b) EFFECTIVE DATE.—The amendment made by 22 this section shall apply to taxable years beginning after 23 December 31, 2019. 24 Æ VerDate Sep 11 2014 21:38 Apr 22, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6301 E:\BILLS\H2272.IH H2272 pamtmann on DSKBFK8HB2PROD with BILLS