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US Congress Receives Bill To Cancel CEO Tax Breaks
Source:
tax-news.com
- Jan 17, 2017
Legislation has been introduced in Congress to stop the unlimited US corporate tax deductions allowed for performance-based executive pay.
Lloyd Doggett (D - Texas), a member of the House of Representatives Ways and Means Committee, senator Jack Reed (D - Rhode Island), and Richard Blumenthal (D - Connecticut) introduced the Stop Subsidizing Multimillion Dollar Corporate Bonuses Act.
It was pointed out that, under current tax law, a publicly traded corporation is generally permitted to deduct the cost of compensation from its revenues, with limits up to USD1m for each of the company's most senior executives. However, that limit does not include performance-based compensation, which can generally be deducted without any limit. For example, "if a CEO receives USD1m in cash compensation and USD14m in a performance-based bonus in a given year, the public corporation's taxable income would decline by USD15m."
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Category: General Business
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