Okay, let’s break down the information about H.R.3140, titled the “Stop Subsidizing Multimillion Dollar Corporate Bonuses Act,” based on the link you provided.
It’s important to note a potential discrepancy: While the link URL includes “119hr3140ih” and you mentioned “119th Congress” and a May 10, 2025 date, the actual details on the govinfo page for the provided link www.govinfo.gov/app/details/BILLS-119hr3140ih clearly state the bill is from the 118th Congress (2023-2024) and was introduced on May 9, 2023. The May 10, 2025 date you saw might relate to a publication or update date on the govinfo site itself, not the date the bill was introduced or enacted. Legislative actions happen within specific Congresses.
Therefore, this article will focus on H.R.3140 as introduced in the 118th Congress based on the content of the link.
Bill Aims to End Tax Breaks for Multi-Million Dollar Executive Bonuses
Washington D.C. – A bill introduced in the U.S. House of Representatives takes aim at how corporations deduct executive pay from their taxes, specifically targeting multi-million dollar bonuses. Known as the “Stop Subsidizing Multimillion Dollar Corporate Bonuses Act” (H.R.3140), the legislation proposes to eliminate a tax deduction that critics argue allows taxpayers to indirectly foot the bill for excessive executive compensation.
The bill, introduced on May 9, 2023, during the 118th Congress, by Representative Mike Levin (D-California), was referred to the House Committee on Ways and Means for consideration. As an “IH” version (Introduced in House), it represents the initial proposal of the legislation.
Understanding the Problem the Bill Addresses
Under U.S. tax law, companies are generally allowed to deduct ordinary and necessary business expenses, including employee salaries and compensation, from their taxable income. This reduces the amount of profit on which they pay corporate taxes. However, there are specific rules regarding executive compensation, particularly for amounts over $1 million paid to certain top executives (governed by Internal Revenue Code Section 162(m)).
Historically, Section 162(m) limited the deductibility of executive pay over $1 million per year for the CEO and the next three highest-paid officers. However, there was an exemption for “performance-based compensation,” which allowed companies to deduct much larger amounts if tied to meeting specific performance goals. This meant that multi-million dollar bonuses based on performance were fully tax-deductible for the corporation.
The Tax Cuts and Jobs Act of 2017 (TCJA) significantly changed this, largely eliminating the performance-based pay exemption and applying the $1 million deduction limit to a broader group of executives, including the CFO. This was intended to curb the deductibility of high executive pay. However, certain exceptions or interpretations may still allow companies to deduct significant portions of large bonuses, particularly under “grandfathering” clauses for contracts existing before the TCJA changes.
Proponents of H.R.3140 argue that allowing corporations to deduct these multi-million dollar bonuses effectively means that the U.S. taxpayer is “subsidizing” them. By reducing the company’s taxable income, the deduction lowers the company’s tax bill, meaning the government (and thus taxpayers) receive less tax revenue. This reduced revenue, in essence, helps the company afford the bonus.
What H.R.3140 Proposes
While the full text provides the precise legal language, the bill’s title makes its intent clear: to stop this “subsidy” for “multimillion dollar corporate bonuses.” This would likely involve further amending Section 162(m) or related provisions to explicitly make such large bonus payments non-deductible for the corporation.
If enacted, this change would mean companies paying these large bonuses would not be able to reduce their taxable income by the amount of the bonus. This would result in a higher corporate tax liability for those companies.
Why It Matters
Supporters of the bill would likely argue:
- Fairness: It ensures that profitable corporations pay taxes on a larger portion of their income rather than using executive bonuses as a tax write-off.
- Closing Loopholes: It aims to close what some see as a loophole that benefits highly paid executives and the companies employing them, at the expense of average taxpayers.
- Revenue Generation: Making these bonuses non-deductible could potentially increase federal tax revenue.
- Incentivizing Investment/Wages: The money not spent on tax-deductible bonuses could theoretically be invested elsewhere in the company or used for employee wages lower down the pay scale, though opponents might dispute this link.
Current Status
As of its introduction date in May 2023, H.R.3140 was in the very early stages of the legislative process. It was referred to the House Ways and Means Committee, which handles tax policy. The committee would need to review the bill, potentially hold hearings, and vote on whether to send it to the full House of Representatives for consideration.
It’s important to remember that bills introduced in one Congress (the 118th Congress ran from January 2023 to January 2025) that do not pass both chambers typically expire at the end of that Congress. For H.R.3140 or similar legislation to move forward, it would likely need to be reintroduced in the current 119th Congress (which began in January 2025). The fact that the govinfo URL you found includes “119hr3140ih” could indicate a version might exist or be anticipated in the 119th, but the content of the link provided refers to the 118th Congress bill.
In summary, H.R.3140, the “Stop Subsidizing Multimillion Dollar Corporate Bonuses Act,” as introduced in the 118th Congress, was a proposal to prevent corporations from deducting large executive bonuses from their taxable income, framed by its sponsor as ending a taxpayer subsidy for such pay. It faced the long legislative path required to become law.
H.R.3140(IH) – Stop Subsidizing Multimillion Dollar Corporate Bonuses Act
The AI has delivered the news.
The following question was used to generate the response from Google Gemini:
At 2025-05-10 04:27, ‘H.R.3140(IH) – Stop Subsidizing Multimillion Dollar Corporate Bonuses Act’ was published according to Congressional Bills. Please write a detailed article with related information in an easy-to-understand manner. Please answer in English.
217