SB 8610: GAIN Act Thread II (Tabled)

[Southern Senator North Carolina Yankee]

SENATE BILL

To expand the Earned Income Tax Credit

Be it enacted in both Houses of Congress Assembled,

Section 1; Title
1. This legislation may be cited as the "Grow Atlasian Incomes Now Act"(GAIN Act)
Section 2; EITC Expansion
1. The table in section 32(b)(1) of the Internal Revenue Code of 1986 is amended—
a) by striking “7.65” in the second column (relating to credit percentage) and inserting “30”;
b) by striking “7.65” in the third column (relating to phaseout percentage) and inserting “15.98”;
c) by striking “34” and inserting “65.28”;
d) by striking “40” and inserting “76.80”; and
e) by striking “45” and inserting “86.40”.
2. Subparagraph (A) of section 32(b)(2) of such Code is amended by striking “Subject to subparagraph (B), the earned income amount and the phaseout amount” and inserting “Subject to subparagraph (B)—
a) Phaseout amount-The phaseout amount is $18,340.
b) Earned income amount-The earned income amount.
3. Section 32(b)(2)(A)(ii) of such Code, as amended by subparagraph (A), is further amended by striking the table and inserting the following:

a) Subclause (II) of section 32(c)(1)(A)(ii) of the Internal Revenue Code of 1986 is amended by striking “25” and inserting “21”.
b) Paragraph (1) of section 32(j) of the Internal Revenue Code of 1986 is amended to read as follows:
i) In the case of any taxable year beginning after 2018, each of the dollar amounts in subsections (b)(2) and (i)(1) 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, determined—
“(i) in the case of amounts in subsection (b)(2)(A), by substituting ‘calendar year 2016’ for ‘calendar year 1992’ in subparagraph (B) thereof, and
“(ii) in the case of amounts in subsection (i)(1), by substituting ‘calendar year 1995’ for ‘calendar year 1992’ in subparagraph (B) thereof.”.

Section 3; Advance Payment of EITC
1. Chapter 25 of subtitle C of the Internal Revenue Code of 1986 is amended by inserting after section 3506 the following new section:

“SEC. 3507. ADVANCE PAYMENT OF EARNED INCOME CREDIT.
“(a) Advance Payment.—
“(1) IN GENERAL.—An employer making payment of wages to an employee with respect to whom an eligibility certificate is in effect shall, at the time of paying such wages for the payroll period elected by the employee under paragraph (2), make an additional lump sum payment to such employee equal to the earned income advance amount (except as provided in subsection (b)(1)(C)(ii)) of such employee.
“(2) PAYMENTS AVAILABLE AFTER 6 MONTHS OF EMPLOYMENT DURING CALENDAR YEAR.—For purposes of paragraph (1), an employee with respect to whom an eligibility certificate is in effect for the calendar year may elect to receive the earned income advance amount at the same time as wages for any payroll period which begins after the employee has been paid wages by the employer for a period of not less than 6 months during such calendar year.
“(b) Eligibility Certificate.—
“(1) IN GENERAL.—For purposes of this section, an eligibility certificate is a statement submitted by an employee to the employer which—
“(A) certifies that the employee is eligible to receive the credit provided by section 32 for the taxable year,
“(B) certifies that the employee does not have an eligibility certificate in effect for the calendar year with respect to the payment of wages by another employer, and
“(C) certifies that—
“(i) an eligibility certificate has not been in effect for the spouse of the employee on any date during the calendar year, or
“(ii) such a certificate is in effect for the spouse of the employee, and the employee is eligible to receive only 1⁄2 the earned income advance amount otherwise determined with respect to the employee.
“(2) EMPLOYER NOT RESPONSIBLE FOR VERIFICATION.—For purposes of this section, an employer shall not—
“(A) be required to verify any certification made by an employee in the statement described in paragraph (1), or
“(B) be held liable for any false claims or statements made by an employee in regards to such statement.
“(c) Earned Income Advance Amount.—
“(1) DETERMINATION OF AMOUNT.—
“(A) IN GENERAL.—Subject to subparagraph (B), the term ‘earned income advance amount’ means, with respect to any payroll period, the amount determined—
“(i) on the basis of the wages of the employee from the employer during such calendar year through such payroll period, and
“(ii) in accordance with tables issued by the Secretary.
“(B) LIMITATION.—For each calendar year, except as provided in subparagraph (C), the earned income advance amount shall not exceed $500.
“(C) ADJUSTMENT FOR INFLATION.—
“(i) IN GENERAL.—In the case of any taxable year beginning after 2019, the $500 amount in subparagraph (B) shall be increased by an amount equal to—
“(I) such dollar amount, multiplied by
“(II) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins determined by substituting ‘calendar year 2018’ for ‘calendar year 1992’ in subparagraph (B) thereof.
“(ii) ROUNDING.—If any increase determined under paragraph (1) is not a multiple of $10, such increase shall be rounded to the nearest multiple of $10.
“(2) ARMED FORCES.—In the case of an employee who is a member of the Armed Forces of the Republic of Atlasia, the earned income advance amount shall be determined by taking into account the total wages of such employee, as determined for purposes of section 32.
“(3) ADVANCE AMOUNT TABLES.—For purposes of paragraph (1)(A)(ii), the tables issued by the Secretary shall be similar in form to the tables issued under section 3402 and, to the extent feasible, coordinated with such tables.
“(d) Payments To Be Treated As Payments Of Withholding And FICA Taxes.—
“(1) IN GENERAL.—Payments made by an employer under subsection (a) to an employee—
“(A) shall not be treated as payment of compensation, and
“(B) shall be treated as made out of—
“(i) amounts required to be deducted and withheld for the payroll period under section 3401,
“(ii) amounts required to be deducted for the payroll period under section 3102, and
“(iii) amounts of the taxes imposed for the payroll period under section 3111,
as if the employer had paid to the Secretary, on the day on which the wages are paid to the employee, an amount equal to such payments.
“(2) ADVANCE PAYMENTS EXCEED TAXES DUE.—In the case of any employer, if for any payroll period the aggregate amount of earned income advance payments exceeds the sum of the amounts referred to in paragraph (1)(B), the employer shall pay only so much of such earned income advance payment as does not exceed such sum, and shall not make any further advance payments to the employee for the calendar year.
“(3) FAILURE TO MAKE ADVANCE PAYMENTS.—Failure to make any payment of an earned income advance amount as required under this section shall be treated as the failure at such time to deduct and withhold under chapter 24 an amount equal to the earned income advance amount.
“(e) Submission Of Certificate.—
“(1) EFFECTIVE PERIOD.—An eligibility certificate submitted to an employer at any time during the calendar year shall continue in effect with respect to the employee during such calendar year until revoked by the employee or until another such certificate takes effect under this section.
“(2) REQUIREMENT TO REVOKE CERTIFICATE.—In the case of an employee who has submitted an eligibility certificate under this section and subsequently becomes ineligible for the credit provided under section 32 for the taxable year, the employee shall, not later than 10 days after becoming ineligible for such credit, submit to the employer a revocation of such certificate.
“(3) FORM AND CONTENTS OF CERTIFICATE.—Eligibility certificates shall be in such form and contain such other information as the Secretary may by regulations prescribe.
“(f) Taxpayers Making Prior Fraudulent Or Reckless Claims.—
“(1) IN GENERAL.—No earned income advance amount shall be paid under this section for any taxable year in the disallowance period.
“(2) DISALLOWANCE PERIOD.—For purposes of paragraph (1), the disallowance period is—
“(A) the period of 10 taxable years after the most recent taxable year for which there was a final determination that the taxpayer's claim of an earned income advance amount under this section was due to fraud, and
“(B) the period of 2 taxable years after the most recent taxable year for which there was a final determination that the taxpayer's claim of an earned income advance amount under this section was due to reckless or intentional disregard of rules and regulations (but not due to fraud).
“(g) Taxable Year.—The term ‘taxable year’ means the last taxable year of the employee under subtitle A beginning in the calendar year in which the wages are paid.
“(h) IRS Notification.—The Internal Revenue Service shall take such steps as may be appropriate to ensure that taxpayers who receive a refund of the credit under section 32 are aware of the availability of earned income advance amounts under this section.”.
(b) Coordination With Advance Payments.—Section 32 of the Internal Revenue Code of 1986 is amended by inserting after subsection (f) the following new subsection:
“(g) Coordination With Advance Payments Of Earned Income Credit.—
“(1) RECAPTURE OF ADVANCE PAYMENTS.—If any payment is made to the individual by an employer under section 3507 during any calendar year, then the tax imposed by this chapter for the individual's last taxable year beginning in such calendar year shall be increased by the aggregate amount of such payments.
“(2) RECONCILIATION OF PAYMENTS ADVANCED AND CREDIT ALLOWED.—Any increase in tax under paragraph (1) shall not be treated as tax imposed by this chapter for purposes of determining the amount of any credit (other than the credit allowed by subsection (a)) allowable under this part.”.
(c) Filing Requirement.—Section 6012(a) of the Internal Revenue Code of 1986 is amended by inserting after paragraph (8) the following new paragraph:
“(9) Every individual who receives payments during the calendar year in which the taxable year begins under section 3507.”.
(d) Receipts For Employees.—Section 6051(a) of the Internal Revenue Code of 1986 is amended by inserting after paragraph (6) the following new paragraph:
“(7) the total amount paid to the employee under section 3507 (relating to advance payment of earned income credit),”.
(e) Clerical Amendment.—The table of sections for chapter 25 of subtitle C of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 3506 the following new item.
(f) Effective Date.—The amendments made by this section shall apply to taxable years beginning after the date which is 1 year after the date of the enactment of this Act.

Section 4; Funding
1. The top marginal rate of income tax shall be increased to 51%, and the second highest marginal rate of income tax shall be increased to 42%.
2. An additional income tax bracket is established at $1 million in income and above, the marginal income tax rate for this bracket shall be 58%.  
Section 5; Implementation
1. All changes in this legislation shall take effect in the first taxable year following its passage into law except for any changes where a specific alternative implementation date is detailed.

People's Regional Senate
Pending

Sponsor: None
Senate Designation: SB 8610
Original Thread: https://uselectionatlas.org/FORUM/index.php?topic=310187.0

[YE]

Let me find the changes that were supposed to be made to the bill.

Going through my old Discord PM’s with Sestak, he was suggested this:

[Attorney General, LGC Speaker, and Former PPT Dwarven Dragon]

Just table this annoyance of a bill

[Pericles]

Just table this annoyance of a bill

No, there is still a path to getting something really positive done. Perseverance is a virtue.

[MAINEiac4434]

Screw it, I’ll sponsor.

[Southern Senator North Carolina Yankee]

Screw it, I’ll sponsor.

Senators have 24 hours to object to the assumption of sponsorship

[Southern Senator North Carolina Yankee]

The motion has been adopted.

[Southern Senator North Carolina Yankee]

What is the situation here?

[Former President tack50]

What is the situation here?

Well, in the original thread Encke claimed this didn't pass paygo. Which means the options are:

1: Ammending the bill so that it passes paygo, probably by increasing other taxes (not just the income tax)

2: Putting it to a final vote it even though it doesn't pass paygo (I think there's a method for this, not that I expect it to be used)

3: Tabling the bill

Number 2 is a no go, at least from me.

So I think someone should bring an ammendment to fix the bill. If no one has the intention to bring an ammendment, I'd support tabling this.

I won't formally motion to table (yet), but this bill needs to be fixed if people want this to pass.

[MAINEiac4434]

Can we get a GM costing on the current version so we can amend it accordingly?

[Mr. Reactionary]

Not sure what's going on with this, since it's been more than 2 weeks since anyone has posted, but here's a Tax Policy Center cost analysis for a variety of different EITC increase proposals.

The relevant portion of the table is option (f), which describes the increases outlined in the real Brown-Khanna proposal: "Option increases the credit phase-in rates to 30%, 65.28%, 76.80%, and 86.40% for those with 0,1,2, and 3 children, respectively. Proposal also increases the end of phase-in and the beginning of phase-out income thresholds, and phase-out rate of childless workers to 15.98%, the same as for workers with one child. Finally, proposal reduces their eligibility age from 25 to 21."

This shows that the total cost for FY2019 would be 141.6 billion dollars, and the cost over 10 years (FY2017-26) would be 1.385 trillion dollars.

As for the tax increases, it's difficult to say how much that would affect revenue. The 2018 Atlasian budget numbers are not broken down by bracket, so I'm not sure what I should be using as a reference here. I've done a few estimates and it seems from a very preliminary estimate that the bill does in fact pass paygo, as the tax increases outlined in the bill would generate around 170 billion dollars in extra revenue. However, there are large error bars on this estimate (+/- 40 billion) and I will try to do a more detailed analysis later.

(Here's the link to the Brown-Khanna bill, since the table in the OP is very difficult to read, and here's the link to the relevant portions of the tax code)

I'll just post this here even though progress seems to have stagnated on this bill:

Now that the tax revenue numbers are complete, a more detailed cost analysis is in order. As it turns out, the initial estimate that I posted a few weeks ago was way off. 100 billion dollars off, in fact. My new analysis shows that the tax increases outlined in this bill would only generate, at most, 73.9 +/- 5 billion dollars in new revenues, only half of the cost estimate of the RL bill (141 billion dollars).

Now here's a fun fact: in order to fund this bill in its current form, the current top marginal tax bracket would have to be taxed at a rate of 78.8%.

Another fun fact: even if the top two marginal tax rates were increased to 100%, the resulting new revenues would total 327 billion dollars, only about 60% of the current projected deficit, and only 2.3 times the per-year cost of the Brown-Khanna bill. Ultimately, not enough people make up the top two tax brackets for 'tax the rich' solutions to work as an effective source of new revenues; if income tax increases are to be used as such, then the lower bracket rates would have to be upped as well.

[MAINEiac4434]

Lmao Jesus. Motion o table.

[Former President tack50]

If we plan on saving this bill, I think the best approach would be to make a smaller enlargement of the EITC. On paper, halving the increases would be enough to cover it with the tax increases included.

However the tax increases included are too large in my opinion for the benefit Atlasian families would get back. Even if we were to increase taxes and get 73.9 billion dollars, we could spend them on many better ways.

I second the motion to table.

[Southern Senator North Carolina Yankee]

Lmao Jesus. Motion o table.

"Is the motion signed by a Senator" - Al Gore

[MAINEiac4434]

Lmao Jesus. Motion o table.

"Is the motion signed by a Senator" - Al Gore

Yes.

[Southern Senator North Carolina Yankee]

I didn't notice tack's seconding.


I do recommend bolding or otherwise differentiating such procedural actions when they appear as part of a longer post.

[Southern Senator North Carolina Yankee]

A vote is open on the motion to table the Gain Act, Senators please vote, Aye, Nay or Abstain.

[Southern Senator North Carolina Yankee]

AYE

[ON Progressive]

Aye

[Former President tack50]

Aye

[Vern]

Aye

[MAINEiac4434]

Aye

[Southern Senator North Carolina Yankee]

Vote on motion to Table the Gain Act:

Aye (5): Mainieac4434, NC Yankee, OntarioProgressive, Tack50 and Vern
Nay (0):
Abstain (0):

Didn't Vote (1): Devout Centrist.

The bill has been tabled.