[Congressional Record Volume 169, Number 177 (Thursday, October 26, 2023)]
[Senate]
[Page S5216]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. REED (for himself, Mr. Blumenthal, Mr. Whitehouse, Ms. 
        Baldwin, Ms. Warren, Mr. Merkley, Mr. Van Hollen, and Mr. 
        Sanders):
  S. 3155. 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. Madam President, I am reintroducing the Stop Subsidizing 
Multimillion Dollar Corporate Bonuses Act with Senators Blumenthal, 
Whitehouse, Merkley, Baldwin, Warren, Van Hollen, and Sanders. This 
legislation would finally fully close a loophole that allows publicly 
traded corporations to deduct the cost of multimillion-dollar bonuses 
from their corporate tax bills. At a time when the gulf in pay between 
CEOs and average workers is 272 to 1, it is infuriating that U.S. 
taxpayers are being forced to subsidize lavish executive compensation 
packages, but that is what is happening.
  Under section 162(m) of the Tax Code, publicly traded corporations 
cannot deduct more than $1 million in compensation paid to their top 
executives. But section 162(m) does not cover compensation paid to all 
public company employees, and corporations have long exploited this 
loophole to claim tax deductions for executive compensation packages 
that far exceed $1 million. Indeed, publicly traded corporations are 
offering these lucrative compensation deals to ever increasing numbers 
of executives--not just a few at the very top of the organization.
  Both Republican and Democratic administrations have recognized the 
need to close loopholes in section 162(m). Indeed, both President Trump 
and President Biden signed laws based on earlier versions of my 
legislation in order to curtail the abuse of this deduction. This 
includes ensuring that performance-based compensation is actualjy 
counted as compensation under section 162(m) and increasing the number 
of highly paid executives who are subject to section 162(m). Partially 
tightening the law in these ways has saved taxpayers well over $9.2 
billion. But the full loophole has still not been closed and taxpayers 
continue to subsidize billions of dollars in extravagant compensation.
  The Stop Subsidizing Multimillion Dollar Corporate Bonuses Act would 
address the remaining gaps by applying section 162(m) restrictions to 
all employees of publicly traded corporations so that all compensation 
is subject to a deductibility cap of $1 million per employee.
  To be clear, under my bill, publicly traded corporations would still 
be able to pay their executives as much as they desire, but individual 
compensation packages above and beyond $1 million would no longer be 
subsidized through our Tax Code. This is a matter of fairness. It 
ensures that corporations and shareholders--not hard-working 
taxpayers--are shouldering the cost of the multimillion-dollar 
compensation packages they provide to their top earners.
  I thank Public Citizen, Americans for Financial Reform, the AFL-CIO, 
the International Brotherhood of Teamsters, MIT Professor Simon 
Johnson, Take On Wall Street, and the Institute for Policy Studies, 
Global Economy Project for their support. I urge our colleagues to join 
us in cosponsoring this legislation and pressing for its passage.

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