[Congressional Record Volume 167, Number 19 (Tuesday, February 2, 2021)]
[Senate]
[Page S251]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. REED (for himself, Mr. Blumenthal, Mr. Whitehouse, Mr. 
        Brown, Mr. Van Hollen, Mr. Merkley, Ms. Baldwin, and Ms. 
        Warren):
  S. 178. A bill to amend the Internal Revenue Code of 1986 to expand 
the denial of deduction for certain excessive employee remuneration, 
and for other purposes; to the Committee on Finance.
  Mr. REED. Mr. President, I am reintroducing the Stop Subsidizing 
Multimillion Dollar Corporate Bonuses Act with Senators Blumenthal, 
Whitehouse, Merkley, Baldwin, Warren, Van Hellene, and Brown. This 
legislation fully closes a loophole that has allowed publicly traded 
corporations to deduct the cost of multimillion-dollar bonuses from 
their corporate tax bills. U.S. taxpayers shouldn't continue to have to 
subsidize these massive bonuses.
  Under section 162(m) of the tax code as amended by the 2017 Trump tax 
law (TCJA), when a publicly traded corporation calculates its taxable 
income, it is generally permitted to deduct compensation costs from its 
revenues, with limits up to $1 million for some of the firm's most 
senior executives.
  In the 115th Congress, the TCJA got rid of some of the prior 162(m) 
loopholes by taking provisions from my Stop Subsidizing Multimillion 
Dollar Corporate Bonuses Act, including removing the exemption for 
performance-based compensation, which previously permitted compensation 
deductions above $1 million when executives met performance benchmarks,
  While these steps were a start, even more should have been done, such 
as applying section 162(m) to all employees of publicly traded 
corporations so that all compensation is subject to a deductibility cap 
of $1 million. This was the only provision from my Stop Subsidizing 
Multimillion Dollar Corporate Bonuses Act from the l15th Congress that 
was not incorporated into the Trump tax law.
  Partially closing these 162(m) loopholes saved taxpayers $9.2 billion 
according to the Joint Committee on Taxation (JCT), but last Congress, 
the JCT estimated that fully closing the loophole along the lines of 
the legislation I am reintroducing today would save taxpayers an 
additional $27 billion dollars.
  Under this legislation, publicly traded corporations would still be 
permitted to pay their executives as much as they desire, but 
compensation above and beyond $1 million would no longer be subsidized 
through our tax code. This is simply a matter of fairness, ensuring 
that corporations--and not hardworking taxpayers who face their own 
challenges in this economy--are paying for the multi-million dollar 
bonuses corporations have decided to dole out to their senior 
executives. Instead of showering corporations with additional benefits 
they certainly don't need, we should be doing everything within our 
power to help more families, who are barely surviving, make it to the 
other side of this public health emergency.
  I thank Public Citizen, the Institute for Policy Studies--Global 
Economy Project, Americans for Financial Reform, the AFL-CIO, 
International Brotherhood of Teamsters, and MIT Professor Simon Johnson 
for their support. I urge our colleagues to join us in cosponsoring 
this legislation and pressing for its passage.
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