[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 687 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 687

    To amend the Internal Revenue Code of 1986 to deny employers a 
           deduction for payments of excessive compensation.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           February 11, 1997

Mr. Sabo (for himself, Mr. Conyers, Mr. Olver, Ms. Norton, Mr. Hinchey, 
Mr. Sanders, Mr. Towns, Mr. Martinez, Mr. Vento, Ms. Velazquez, and Ms. 
  McKinney) 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 deny employers a 
           deduction for payments of excessive compensation.

    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 ``Income Equity Act of 1997''.

SEC. 2. DENIAL OF DEDUCTION FOR PAYMENTS OF EXCESSIVE COMPENSATION.

    (a) In General.--Section 162 of the Internal Revenue Code of 1986 
(relating to deduction for trade or business expenses) is amended by 
inserting after subsection (h) the following new subsection:
    ``(i) Excessive Compensation.--
            ``(1) In general.--No deduction shall be allowed under this 
        chapter for any excessive compensation with respect to any 
        full-time employee.
            ``(2) Excessive compensation.--For purposes of this 
        subsection, the term `excessive compensation' means, with 
        respect to any employee, the amount by which--
                    ``(A) the compensation for services performed by 
                such employee during the taxable year, exceeds
                    ``(B) an amount equal to 25 times the lowest 
                compensation for services performed by any other full-
                time employee during such taxable year.
            ``(3) Definitions and special rules.--For purposes of this 
        subsection--
                    ``(A) Compensation.--
                            ``(i) In general.--The term `compensation' 
                        means salary, wages, and bonuses.
                            ``(ii) Part-year employees.--In the case of 
                        any part-year employee, the compensation of the 
                        employee shall be computed on an annualized 
                        basis.
                    ``(B) Employer.--All persons treated as a single 
                employer under subsection (a) or (b) of section 52 or 
                subsection (m) or (o) of section 414 shall be treated 
                as 1 employer.''
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after the date of the enactment of this Act.
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