H.R. 3200/Division A/Title IV/Subtitle D/Part 1

==PART 1 — GENERAL PROVISIONS==

Sec. 441. Surcharge on High Income Individuals.

(a) In General.—

Part VIII of subchapter A of chapter 1 of the Internal Revenue Code of 1986, as added by this title, is amended by adding at the end the following new subpart:

``Subpart B—Surcharge on High Income Individuals

``Sec. 59C. Surcharge on High Income Individuals.

``SEC. 59C. Surcharge on high income individuals.

``(a) General rule.—In the case of a taxpayer other than a corporation, there is hereby imposed (in addition to any other tax imposed by this subtitle) a tax equal to—

``(1) 1 percent of so much of the modified adjusted gross income of the taxpayer as exceeds $350,000 but does not exceed $500,000,

``(2) 1.5 percent of so much of the modified adjusted gross income of the taxpayer as exceeds $500,000 but does not exceed $1,000,000, and

``(3) 5.4 percent of so much of the modified adjusted gross income of the taxpayer as exceeds $1,000,000.

``(b) Taxpayers not making a joint return.—In the case of any taxpayer other than a taxpayer making a joint return under section 6013 or a surviving spouse (as defined in section 2(a)), subsection (a) shall be applied by substituting for each of the dollar amounts therein (after any increase determined under subsection (e)) a dollar amount equal to—

``(1) 50 percent of the dollar amount so in effect in the case of a married individual filing a separate return, and

``(2) 80 percent of the dollar amount so in effect in any other case.

``(c) Adjustments based on Federal health reform savings.—

``(1) In general.—Except as provided in paragraph (2), in the case of any taxable year beginning after December 31, 2012, subsection (a) shall be applied—

``(A) by substituting ‘2 percent’ for ‘1 percent’, and

``(B) by substituting ‘3 percent’ for ‘1.5 percent’.

``(2) Adjustments based on excess Federal health reform savings.—

``(A) Exception if Federal health reform savings significantly exceeds base amount.—If the excess Federal health reform savings is more than $150,000,000,000 but not more than $175,000,000,000, paragraph (1) shall not apply.

``(B) Further adjustment for additional Federal health reform savings.—If the excess Federal health reform savings is more than $175,000,000,000, paragraphs (1) and (2) of subsection (a) (and paragraph (1) of this subsection) shall not apply to any taxable year beginning after December 31, 2012.

``(C) Excess Federal health reform savings.—For purposes of this subsection, the term ‘excess Federal health reform savings’ means the excess of—

``(i) the Federal health reform savings, over

``(ii) $525,000,000,000.

``(D) Federal health reform savings.—The term ‘Federal health reform savings’ means the sum of the amounts described in subparagraphs (A) and (B) of paragraph (3).

``(3) Determination of Federal health reform savings.—Not later than December 1, 2012, the Director of the Office of Management and Budget shall—

``(A) determine, on the basis of the study conducted under paragraph (4), the aggregate reductions in Federal expenditures which have been achieved as a result of the provisions of, and amendments made by, division B of the America’s Affordable Health Choices Act of 2009 during the period beginning on October 1, 2009, and ending with the latest date with respect to which the Director has sufficient data to make such determination, and

``(B) estimate, on the basis of such study and the determination under subparagraph (A), the aggregate reductions in Federal expenditures which will be achieved as a result of such provisions and amendments during so much of the period beginning with fiscal year 2010 and ending with fiscal year 2019 as is not taken into account under subparagraph (A).

``(4) Study of Federal health reform savings.—The Director of the Office of Management and Budget shall conduct a study of the reductions in Federal expenditures during fiscal years 2010 through 2019 which are attributable to the provisions of, and amendments made by, division B of the America’s Affordable Health Choices Act of 2009. The Director shall complete such study not later than December 1, 2012.

``(5) Reductions in Federal expenditures determined without regard to program investments.—For purposes of paragraphs (3) and (4), reductions in Federal expenditures shall be determined without regard to section 1121 of the America’s Affordable Health Choices Act of 2009 and other program investments under division B thereof.

``(d) Modified adjusted gross income.—For purposes of this section, the term ‘modified adjusted gross income’ means adjusted gross income reduced by any deduction allowed for investment interest (as defined in section 163(d)). In the case of an estate or trust, adjusted gross income shall be determined as provided in section 67(e).

``(e) Inflation adjustments.—

``(1) In general.—In the case of taxable years beginning after 2011, the dollar amounts in subsection (a) shall be increased by an amount equal to—

``(A) such dollar amount, multiplied by

``(B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, by substituting ‘calendar year 2010’ for ‘calendar year 1992’ in subparagraph (B) thereof.

``(2) Rounding.—If any amount as adjusted under paragraph (1) is not a multiple of $5,000, such amount shall be rounded to the next lowest multiple of $5,000.

``(f) Special rules.—

``(1) Nonresident alien.—In the case of a nonresident alien individual, only amounts taken into account in connection with the tax imposed under section 871(b) shall be taken into account under this section.

``(2) Citizens and residents living abroad.—The dollar amounts in effect under subsection (a) (after the application of subsections (b) and (e)) shall be decreased by the excess of—

``(A) the amounts excluded from the taxpayer’s gross income under section 911, over

``(B) the amounts of any deductions or exclusions disallowed under section 911(d)(6) with respect to the amounts described in subparagraph (A).

``(3) Charitable trusts.—Subsection (a) shall not apply to a trust all the unexpired interests in which are devoted to one or more of the purposes described in section 170(c)(2)(B).

``(4) Not treated as tax imposed by this chapter for certain purposes.—The tax imposed under this section shall not be treated as tax imposed by this chapter for purposes of determining the amount of any credit under this chapter or for purposes of section 55.´´.

(b) Clerical Amendment.—

The table of subparts for part VIII of subchapter A of chapter 1 of such Code, as added by this title, is amended by inserting after the item relating to subpart A the following new item:

``SUBPART B. SURCHARGE ON HIGH INCOME INDIVIDUALS.´´.

(c) Section 15 Not to Apply.—

The amendment made by subsection (a) shall not be treated as a change in a rate of tax for purposes of section 15 of the Internal Revenue Code of 1986.

(d) Effective Date.—

The amendments made by this section shall apply to taxable years beginning after December 31, 2010.

Sec. 442. Delay in Application of Worldwide Allocation of Interest.

(a) In General.—

Paragraphs (5)(D) and (6) of section 864(f) of the Internal Revenue Code of 1986 are each amended by striking ``December 31, 2010´´ and inserting ``December 31, 2019´´.

(b) Transition.—

Subsection (f) of section 864 of such Code is amended by striking paragraph (7).