Higher rate of tax on bonuses and stock profits received by certain bank executives

(a)

In general

Section 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:

(k)

Rate of tax on profits received by certain bank executives

(1)

In general

In the case of any applicable individual who receives any excluded profits during the taxable year, the tax imposed by this section shall be equal to—(A)the tax which would be imposed by this section if the taxable income of such individual for the taxable year were reduced (but not below zero) by the amount of the excluded profits received by such individual during such taxable year, plus(B)90 percent of the excluded profits described in subclause (I) of paragraph (2)(B)(i) which were received by such individual during such taxable year, plus(C)100 percent of the excluded profits described in subclause (II) of such paragraph which were received by such individual during such taxable year.(2)

Definitions

For purposes of this subsection—(A)

Applicable individual

The term applicable individual means any individual—(i)who—(I)was employed by an insured depository institution for which the Federal Deposit Insurance Corporation has been appointed conservator or receiver, and (II)served as an executive officer for such institution prior to such conservatorship or receivership, and(ii)with respect to the taxable year in which the excluded profits were received, whose adjusted gross income (reduced by the amount of such excluded profits) for such taxable year was greater than $250,000.(B)

Excluded profits

(i)

In general

The term excluded profits means, with respect to any applicable individual for any taxable year—(I)any payment in the nature of a bonus which is paid—(aa)after March 1, 2023, and(bb)by any insured depository institution within the 60-day period prior to the date on which the Federal Deposit Insurance Corporation was appointed conservator or receiver for such institution, or(II)any profit made by such applicable individual from the sale of any security of the insured depository institution that employs such applicable individual, if that sale occurs not more than 60 days before the date on which the Federal Deposit Insurance Corporation is appointed conservator or receiver with respect to the insured depository institution.(ii)

Controlled groups

(I)

In general

For purposes of clause (i), all persons treated as a single employer under subsection (a) or (b) of section 52 or under subsection (m) or (o) of section 414 shall be treated as one person.(II)

Inclusion of foreign corporations

For purposes of subclause (I), in applying subsections (a) and (b) of section 52 to this section, section 1563 shall be applied without regard to subsection (b)(2)(C) thereof.(C)

Executive officer

The term executive officer means, with respect to any insured depository institution, its president, any vice president of such institution in charge of a principal business unit, division or function (such as sales, administration or finance), any other officer who performs a policy making function or any other person who performs similar policy making functions for such institution. Executive officers of subsidiaries may be deemed executive officers of such institution if they perform such policy making functions for such institution.(D)

Insured depository institution

The term insured depository institution has the same meaning given such term under section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813).

(b)

Effective date

The amendment made by this section shall apply to taxable years ending after the date of the enactment of this Act.