Statements on Introduced Bills and Joint Resolutions

Floor Speech

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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. ______

By Ms. HIRONO (for herself, Ms. Baldwin, Mr. Bennet, Mr. Blumenthal, Ms. Cantwell, Mr. Casey, Ms. Cortez Masto, Ms. Duckworth, Mr. Durbin, Mrs. Feinstein, Ms. Klobuchar, Mr. Markey, Mr. Merkley, Mrs. Murray, Mr. Ossoff, Ms. Rosen, Ms. Smith, Mr. Van Hollen, Mr. Warner, Mr. Whitehouse, and Mr. Wyden):

S. 181. A bill to posthumously award a Congressional Gold Medal to Fred Korematsu, in recognition of his dedication to justice and equality; to the Committee on Banking, Housing, and Urban Affairs.

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