Senator Kerry Introduces the Compensation Fairness Act of 2008
Senator Kerry introduced this bill today. It would repeal the performance-based compensation exception to the $1 million limit on deductibility of executive compensation, which would be a dramatic departure from current law. The proposed legislation is quoted in full below.
Compensation Fairness Act of 2008 (Introduced in Senate)
S 3675 IS
October 1 (legislative day, September 17), 2008
Mr. KERRY introduced the following bill; which was read twice and referred to the Committee on Finance
- Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
- This Act may be cited as the `Compensation Fairness Act of 2008'.
SEC. 2. TREATMENT OF CERTAIN EXCESSIVE EMPLOYEE REMUNERATION.
- (a) Inflation Index of Limitation- Section 162(m) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
- `(5) INFLATION ADJUSTMENT-
- `(A) IN GENERAL- In the case of any taxable year beginning after 2008, the $1,000,000 dollar amount under paragraph (1) shall be increased by an amount equal to--
- `(i) such dollar amount, multiplied by
- `(ii) the cost of living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting `calendar year 2007' for `calendar year 1992' in subparagraph (B) thereof.
- `(B) ROUNDING- If any amount as adjusted under subparagraph (A) is not a multiple of $1,000, such amount shall be rounded to the next lowest multiple of $1,000.'.
- (b) Repeal of Exception for Remuneration Payable on Commission Basis- Section 162(m)(4) of the Internal Revenue Code of 1986 is amended by striking subparagraph (B) and by redesignating subparagraphs (C) through (G) as subparagraphs (B) through (F), respectively.
- (c) Repeal of Exception for Other Performance-Based Compensation- Section 162(m)(4) of the Internal Revenue Code of 1986, as amended by subsection (b), is amended by striking subparagraph (B) and by redesignating subparagraphs (C) through (F) as subparagraphs (B) through (E), respectively.
- (d) Timing for Determination of Certain Covered Employees- Section 162(m)(3)(A) of the Internal Revenue Code of 1986 is amended by striking `as of the close of the taxable year' and inserting `at any time during the taxable year'.
- (e) Effective Date- The amendments made by this section shall apply to taxable years beginning after December 31, 2008.
