[Congressional Record Volume 171, Number 73 (Thursday, May 1, 2025)]
[Senate]
[Pages S2738-S2739]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. REED (for himself, Mr. Blumenthal, Ms. Baldwin, Ms. 
        Warren, Mr. Merkley, Mr. Van Hollen, Mr. Sanders, and Mr. 
        Whitehouse):
  S. 1576. 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.

[[Page S2739]]

  

  Mr. REED. Mr. President, I am proud to join Senators Blumenthal, 
Whitehouse, Merkley, Baldwin, Warren, Van Hollen, and Sanders in 
introducing the Stop Subsidizing Multimillion Dollar Corporate Bonuses 
Act. Our 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 disparity in 
pay between CEOs and average workers is 290 to 1, there is no 
justification for forcing U.S. taxpayers to foot the bill for 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. Section 162(m), however, does not apply to all employees, 
and corporations are exploiting this loophole to claim tax deductions 
for compensation packages for uncovered employees 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--even when revenue 
growth for these companies slows.
  Both Republican and Democratic administrations have recognized the 
need to close loopholes in section 162(m). In fact, both President 
Trump and President Biden signed laws based on earlier versions of my 
legislation to curtail the abuse of this deduction. This includes 
ensuring that performance-based compensation is actually 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 billions of dollars. But 
until the loophole is fully closed, taxpayers will continue to be 
forced to subsidize 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, subjecting all 
compensation to a deductibility cap of $1 million per employee. The 
Joint Committee on Taxation has estimated that closing this loophole 
would save taxpayers nearly $80 billion over 10 years. In other words, 
taxpayers are currently paying around $8 billion each year to subsidize 
exorbitant executive pay packages.
  To be clear, our bill does not prevent publicly traded corporations 
from being able to pay their executives as much as they want. These 
corporations simply won't be able to deduct the portion of the 
compensation package that exceeds $1 million. This is a matter of 
fairness. It ensures that corporations and shareholders--not 
taxpayers--are shouldering the cost of the multimillion dollar 
compensation packages.
  I thank Public Citizen, Americans for Financial Reform, the AFL-CIO, 
the International Brotherhood of Teamsters, MIT Professor and Nobel 
Prize Winner Simon Johnson, Take On Wall Street, Americans for Tax 
Fairness, 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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