12TH CONGRESS
2D SESSION
To provide for expedited consideration of a bill providing for comprehensive tax reform.
IN THE HOUSE OF REPRESENTATIVES
Mr. DREIER (for himself and Mr. CAMP) introduced the following bill
A BILL
To provide for expedited consideration of a bill providing for comprehensive tax reform.
1 Be it enacted by the Senate and House of Representa-
2 tives of the United States of America in Congress assembled,
3 SECTION 1. SHORT TITLE.
4 This Act may be cited as the ‘‘Pathway to Job Cre-
5 ation through a Simpler, Fairer Tax Code Act of 2012’’.
6 SEC. 2. FINDINGS AND PURPOSES.
7 (a) FINDINGS.—Congress finds that the following
8 problems exist with the Internal Revenue Code of 1986
9 (in this section referred to as the ‘‘tax code’’):
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1 (1) The tax code is unfair, containing hundreds
2 of provisions that only benefit certain special inter-
3 ests, resulting in a system of winners and losers.
4 (2) The tax code violates the fundamental prin-
5 ciple of equal justice by subjecting families in similar
6 circumstances to significantly different tax bills.
7 (3)(A) Many tax preferences, sometimes re-
8 ferred to as ‘‘tax expenditures,’’ are similar to gov-
9 ernment spending—instead of markets directing eco-
0 nomic resources to their most efficient uses, the
1 Government directs resources to other uses, creating
2 a drag on economic growth and job creation.
3 (B) The exclusions, deductions, credits, and
4 special rules that make up such tax expenditures
5 amount to over $1 trillion per year, nearly matching
6 the total amount of annual revenue that is generated
7 from the income tax itself.
8 (C) In some cases, tax subsidies can literally
9 take the form of spending through the tax code, re-
0 distributing taxes paid by some Americans to indi-
1 viduals and businesses who do not pay any income
2 taxes at all.
3 (4) The failure to adopt a permanent tax code
4 with stable statutory tax policy has created greater
5 economic uncertainty. Tax rates have been scheduled
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1 to increase sharply in 3 of the last 5 years, requiring
2 the enactment of repeated temporary extensions. Ad-
3 ditionally, approximately 70 other, more targeted tax
4 provisions expired in 2011 or are currently sched-
5 uled to expire by the end of 2012.
6 (5) Since 2001, there have been nearly 4,500
7 changes made to the tax code, averaging more than
8 one each day over the past decade.
9 (6) The tax code’s complexity leads nearly nine
0 out of ten families either to hire tax preparers (60
1 percent) or purchase software (29 percent) to file
2 their taxes, while 71 percent of unincorporated busi-
3 nesses are forced to pay someone else to prepare
4 their taxes.
5 (7) The cost of complying with the tax code is
6 too burdensome, forcing individuals, families, and
7 employers to spend over six billion hours and over
8 $160 billion per year trying to comply with the law
9 and pay the actual tax owed.
0 (8) Compliance with the current tax code is a
1 financial hardship for employers that falls dispropor-
2 tionately on small businesses, which spend an aver-
3 age of $74 per hour on tax-related compliance, mak-
4 ing it the most expensive paperwork burden they en-
5 counter.
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1 (9) Small businesses have been responsible for
2 two-thirds of the jobs created in the United States
3 over the past 15 years, and approximately half of
4 small-business profits are taxed at the current top 2
5 individual rates.
6 (10) The historic range for tax revenues col-
7 lected by the Federal government has averaged 18
8 to 19 percent of Gross Domestic Product (GDP),
9 but will rise to 21.2 percent of GDP under current
0 law—a level never reached, let alone sustained, in
1 the Nation’s history.
2 (11) The current tax code is highly punitive,
3 with a top Federal individual income tax rate of 35
4 percent (which is set to climb to over 40 percent in
5 2013 when taking into account certain hidden
6 rates), meaning some Americans could face a com-
7 bined local, State and Federal tax rate of 50 per-
8 cent.
9 (12) The tax code contains harmful provisions,
0 such as the Alternative Minimum Tax (AMT), which
1 was initially designed to affect only the very highest-
2 income taxpayers but now threatens more than 30
3 million middle-class households because of a flawed
4 design.
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1 (13) As of April 1, 2012, the United States
2 achieved the dubious distinction of having the high-
3 est corporate tax rate (39.2 percent for Federal and
4 State combined) in the developed world.
5 (14) The United States corporate tax rate is
6 more than 50 percent higher than the average rate
7 of member states of the Organization for Economic
8 Cooperation and Development (OECD)—a factor
9 that discourages employers and investors from locat-
0 ing jobs and investments in the United States.
1 (15) The United States has become an outlier
2 in that it still uses a ‘‘worldwide’’ system of tax-
3 ation—one that has not been substantially reformed
4 in 50 years, when the United States accounted for
5 nearly half of global economic output and had no se-
6 rious competitors around the world.
7 (16) The combination of the highest corporate
8 tax rate with an antiquated ‘‘worldwide’’ system sub-
9 jects American companies to double taxation when
0 they attempt to compete with foreign companies in
1 overseas markets and then reinvest their earnings in
2 the United States.
3 (17) The Nation’s outdated tax code has con-
4 tributed to the fact that the world’s largest compa-
5 nies are more likely to be headquartered overseas
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1 today than at any point in the last 50 years: In
2 1960, 17 of the world’s 20 largest companies were
3 based in the United States; by 2010, that number
4 sank to a mere six out of 20.
5 (18) The United States has one of the highest
6 levels of taxation on capital—taxing it once at the
7 corporate level and then again at the individual
8 level—with integrated tax rates on certain invest-
9 ment income already reaching roughly 50 percent
0 (and scheduled to reach nearly 70 percent in 2013).
1 (19) The United States’ overall taxation of cap-
2 ital is higher than all but four of the 38 countries
3 that make up the OECD and the BRIC (Brazil,
4 Russia, India and China).
5 (b) PURPOSES.—It is the purpose of this Act to pro-
6 vide for enactment of comprehensive tax reform in 2013
7 that—
8 (1) protects taxpayers by creating a fairer, sim-
9 pler, flatter tax code for individuals and families
0 by—
1 (A) lowering marginal tax rates and broad-
2 ening the tax base;
3 (B) eliminating special interest loopholes;
4 (C) reducing complexity in the tax code,
5 making tax compliance easier and less costly;
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1
2 Tax;
3
(D) repealing the Alternative Minimum
(E) maintaining modern levels of progres-
4 sivity so as to not overburden any one group or
5 further erode the tax base;
6 (F) making it easier for Americans to save;
7 and
8 (G) reducing the tax burdens imposed on
9 married couples and families;
0 (2) is comprehensive (addressing both indi-
1 vidual and corporate rates), so as to have the max-
2 imum economic impact by benefitting employers and
3 their employees regardless of how a business is
4 structured;
5 (3) results in tax revenue consistent with his-
6 torical norms;
7 (4) spurs greater investment, innovation and
8 job creation, and therefore increases economic activ-
9 ity and the size of the economy on a dynamic basis
0 as compared to the current tax code; and
1 (5) makes American workers and businesses
2 more competitive by—
3 (A) creating a stable, predictable tax code
4 under which families and employers are best
5 able to plan for the future;
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1 (B) keeping taxes on small businesses low;
2 (C) reducing America’s corporate tax rate,
3 which is currently the highest in the industri-
4 alized world;
5 (D) maintaining a level of parity between
6 individual and corporate rates to reduce eco-
7 nomic distortions;
8 (E) promoting innovation in the United
9 States;
0 (F) transitioning to a globally competitive
1 territorial tax system;
2 (G) minimizing the double taxation of in-
3 vestment and capital; and
4 (H) reducing the impact of taxes on busi-
5 ness decision-making to allow such decisions to
6 be driven by their economic potential.
7 SEC. 3. EXPEDITED CONSIDERATION OF A MEASURE PRO-
8 VIDING FOR COMPREHENSIVE TAX REFORM.
9 (a) DEFINITION.—For purposes of this section, the
0 term ‘‘tax reform bill’’ means a bill of the 113th Con-
1 gress—
2 (1) introduced in the House of Representatives
3 by the chair of the Committee on Ways and Means
4 not later than April 30, 2013, or the first legislative
5 day thereafter if the House is not in session on that
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1 day, the title of which is as follows: ‘‘A bill to pro-
2 vide for comprehensive tax reform.’’; and
3 (2) which is the subject of a certification under
4 subsection (b).
5 (b) CERTIFICATION.—The chair of the Joint Com-
6 mittee on Taxation shall notify the House and Senate in
7 writing whenever the chair of the Joint Committee deter-
8 mines that an introduced bill described in subsection
9 (a)(1) contains at least each of the following proposals:
0 (1) a consolidation of the current 6 individual
1 income tax brackets into not more than two brackets
2 of 10 and not more than 25 percent;
3 (2) a reduction in the corporate tax rate to not
4 greater than 25 percent;
5 (3) a repeal of the Alternative Minimum Tax;
6 (4) a broadening of the tax base to maintain
7 revenue between 18 and 19 percent of the economy;
8 and
9 (5) a change from a ‘‘worldwide’’ to a ‘‘terri-
0 torial’’ system of taxation.
1 (c) EXPEDITED CONSIDERATION IN THE HOUSE OF
2 REPRESENTATIVES.—
3 (1) Any committee of the House of Representa-
4 tives to which the tax reform bill is referred shall re-
5 port it to the House not later than 20 calendar days
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1 after the date of its introduction. If a committee
2 fails to report the tax reform bill within that period,
3 such committee shall be automatically discharged
4 from further consideration of the bill.
5 (2) If the House has not otherwise proceeded to
6 the consideration of the tax reform bill upon the ex-
7 piration of 15 legislative days after the bill has been
8 placed on the Union Calendar, it shall be in order
9 for the Majority Leader or a designee (or, after the
0 expiration of an additional 2 legislative days, any
1 Member), to offer one motion that the House resolve
2 into the Committee of the Whole House on the state
3 of the Union for the consideration of the tax reform
4 bill. The previous question shall be considered as or-
5 dered on the motion to its adoption without inter-
6 vening motion except 20 minutes of debate equally
7 divided and controlled by the proponent and an op-
8 ponent. If such a motion is adopted, consideration
9 shall proceed in accordance with paragraph (3). A
0 motion to reconsider the vote by which the motion
1 is disposed of shall not be in order.
2 (3) The first reading of the bill shall be dis-
3 pensed with. General debate shall be confined to the
4 bill and shall not exceed 4 hours, equally divided and
5 controlled by the chair and ranking minority mem-
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1 ber of the Committee on Ways and Means. At the
2 conclusion of general debate, the bill shall be read
3 for amendment under the five-minute rule. Any com-
4 mittee amendment shall be considered as read. At
5 the conclusion of consideration of the bill for amend-
6 ment the Committee shall rise and report the bill to
7 the House with such amendments as may have been
8 adopted. The previous question shall be considered
9 as ordered on the bill and amendments thereto to
0 final passage without intervening motion except one
1 motion to recommit with or without instructions. A
2 motion to reconsider the vote on passage of the bill
3 shall not be in order.
4 (d) EXPEDITED CONSIDERATION IN THE SENATE.—
5 (1) COMMITTEE CONSIDERATION.—A tax re-
6 form bill, as defined in subsection (a), received in
7 the Senate shall be referred to the Committee on Fi-
8 nance. The Committee shall report the bill not later
9 than 15 calendar days after receipt of the bill in the
0 Senate. If the Committee fails to report the bill
1 within that period, that committee shall be dis-
2 charged from consideration of the bill, and the bill
3 shall be placed on the calendar.
4 (2) MOTION TO PROCEED.—Notwithstanding
5 rule XXII of the Standing Rules of the Senate, it is
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1 in order, not later than 2 days of session after the
2 date on which the tax reform bill is reported or dis-
3 charged from committee, for the majority leader of
4 the Senate or the majority leader’s designee to move
5 to proceed to the consideration of the tax reform
6 bill. It shall also be in order for any Member of the
7 Senate to move to proceed to the consideration of
8 the tax reform bill at any time after the conclusion
9 of such 2-day period. A motion to proceed is in order
0 even though a previous motion to the same effect
1 has been disagreed to. All points of order against
2 the motion to proceed to the tax reform bill are
3 waived. The motion to proceed is not debatable. The
4 motion is not subject to a motion to postpone.
5 (3) CONSIDERATION.—No motion to recommit
6 shall be in order and debate on any motion or appeal
7 shall be limited to one hour, to be divided in the
8 usual form.
9 (4) AMENDMENTS.—All amendments must be
0 relevant to the bill and debate on any amendment
1 shall be limited to 2 hours to be equally divided in
2 the usual form between the opponents and pro-
3 ponents of the amendment. Debate on any amend-
4 ment to an amendment, debatable motion, or appeal
5 shall be limited to 1 hour to be equally divided in
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1 the usual form between the opponents and pro-
2 ponents of the amendment.
3 (5) VOTE ON PASSAGE.—If the Senate has pro-
4 ceeded to the bill, and following the conclusion of all
5 debate, the Senate shall proceed to a vote on pas-
6 sage of the bill as amended, if amended.
7 (e) CONFERENCE IN THE HOUSE.—If the House re-
8 ceives a message that the Senate has passed the tax re-
9 form bill with an amendment or amendments, it shall be
0 in order for the chair of the Committee on Ways and
1 Means or a designee, without intervention of any point of
2 order, to offer any motion specified in clause 1 of rule
3 XXII.
4 (f) CONFERENCE IN THE SENATE.—If the Senate re-
5 ceives from the House a message to accompany the tax
6 reform bill, as defined in subsection (a), then no later than
7 two session days after its receipt—
8 (1) the Chair shall lay the message before the
9 Senate;
0 (2) the motion to insist on the Senate amend-
1 ment or disagree to the House amendment or
2 amendments to the Senate amendment, the request
3 for a conference with the House or the motion to
4 agree to the request of the House for a conference,
5 and the motion to authorize the Chair to appoint
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1 conferees on the part of the Senate shall be agreed
2 to; and
3 (3) the Chair shall then be authorized to ap-
4 point conferees on the part of the Senate without in-
5 tervening motion, with a ratio agreed to with the
6 concurrence of both leaders.
7 (g) RULEMAKING.—This section is enacted by the
8 Congress as an exercise of the rulemaking power of the
9 House of Representatives and Senate, respectively, and as
0 such is deemed a part of the rules of each House, respec-
1 tively, or of that House to which they specifically apply,
2 and such procedures supersede other rules only to the ex-
3 tent that they are inconsistent with such rules; and with
4 full recognition of the constitutional right of either House
5 to change the rules (so far as relating to the procedures
6 of that House) at any time, in the same manner, and to
7 the same extent as any other rule of that House.
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