To raise revenue and reduce large and increasing Federal budget deficits due to the cost of the war in Iraq.

April 11, 2003

Mr. OWENS introduced the following bill; which was referred to the Committee on Ways and Means

To raise revenue and reduce large and increasing Federal budget deficits due to the cost of the war in Iraq.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Domestic Budget Protection Act of 2003'.

SEC. 2. FINDINGS.

The Congress finds:

(1) The Congress, after review of Congressional Budget Office estimates and other expert opinions, finds that for a prolonged period the amount of revenues collected will be substantially less than the projected Federal expenditures thereby placing burdens and constraints on the budget and appropriations decision-making process.

(2) The Congress finds that the budget/appropriations for Defense, driven by the war and occupation of Iraq, is likely to grow rapidly and uncontrollably. These obligations will place intense strains on the Budget/Appropriations process.

(3) The Congress finds that already certain vital federally funded programs are experiencing devastating federal financial assistance cuts. More specifically, assistance for Education, Public Housing, Medicaid, Medicare and Temporary Aid to Needy Families (TANF) are being subjected to unacceptable cuts.

(4) The Congress finds that there is an established precedent for the long-term financing of a U.S. War effort. A special tax on the profits of the nation's largest corporations would be in accordance with previous precedents: World War I, World War II, Korea and Vietnam.

(5) The Congress finds that in the last 25 years corporations have steadily borne less and less of the overall tax burden. The corporate share of the tax burden has dropped from a high of 35 percent in 1945 to a level of less than 3 percent in the year 2000. At the same time the individual income share of the tax burden has grown from 41 percent in 1945 to 50 percent in 2000.

(6) The Congress finds that it is necessary to suspend further reductions in assistance to domestic programs. It is also imperative that any increases in basic revenue be utilized to increase assistance to vital domestic programs.

SEC. 3. CORPORATE TAX SURCHARGE TO FUND WAR IN IRAQ.

(a) GENERAL RULE- Subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to determination of tax liability) is amended by adding at the end thereof the following new part:

`PART VIII--CORPORATE TAX SURCHARGE TO FUND WAR IN IRAQ

`Sec. 59B. Imposition of surtax.

`SEC. 59B. IMPOSITION OF SURTAX.

`(a) NORMAL TAX-

`(1) IN GENERAL- In the case of a specified corporation, the amount of the tax imposed under section 11 for any taxable year shall be increased by the applicable surtax percentage of the amount of the tax imposed under section 11 for such taxable year (determined without regard to this section).

`(2) TREATMENT OF CERTAIN TAXES- For purposes of paragraph (1), a tax shall be treated as imposed under section 11 if the amount of such tax is determined by reference to the provisions of section 11 (or by reference to any rate contained therein).

`(b) MINIMUM TAX- In the case of a specified corporation, the amount of the tentative minimum tax determined under section 55 for any taxable year shall be increased by the applicable surtax percentage of the amount of the tentative minimum tax for such taxable year (determined without regard to this section).

`(c) DEFINITIONS- For purposes of this section--

`(1) SPECIFIED CORPORATION- The term `specified corporation' means any corporation if the aggregate gross assets of the corporation (as defined in section 1202(d)) (or any predecessor thereof) at any time during the taxable year or any prior taxable year after the date of the enactment of this section exceeds $10,000,000.

`(2) APPLICABLE SURTAX PERCENTAGE- The term `applicable surtax percentage' means, with respect to a taxable year beginning in a calendar year, percentage specified by the Secretary as the amount necessary to fund the war in Iraq for such calendar year.

`(d) COORDINATION WITH OTHER PROVISIONS- The provisions of this section shall be applied--

`(1) after the application of section 1201 and 801(a)(2), but

`(2) before the application of any other provision of this title which refers to the amount of tax imposed by section 11 or 55, as the case may be.

No penalty shall be imposed by section 6655 by reason of amounts imposed by this section.

`(e) APPLICATION OF SECTION- For purposes of subsection (c)(2), there shall not be taken into account--

`(1) expenditures before March 1, 2003, and

`(2) expenditures after the earliest date that no member of the Armed Forces of the United States is serving on active duty in Iraq.'

(b) CLERICAL AMENDMENT- The table of parts for subchapter A of chapter 1 of such Code is amended by adding at the end thereof the following new item:

`Part VIII. Corporate tax surcharge to reduce deficit.'

(c) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after December 31, 2002.

END