H.R. 1572 – Reading Mode

111th CONGRESS

1st Session

H. R. 1572

IN THE HOUSE OF REPRESENTATIVES

March 17, 2009

Mr. Thompson of California introduced the following bill; which was referred to the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to impose a 90 percent tax on bonuses paid by business that receive TARP assistance.

Short title

This Act may be cited as the Taxpayer Protection Act.

90 percent tax on bonuses paid by businesses that receive TARP assistance

(a)

In general

Section 1 of the Internal Revenue Code of 1986 (relating to tax imposed on individuals) is amended by adding at the end the following new subsection:

(j)

90 percent tax on bonuses paid by businesses that receive TARP assistance

(1)

In general

In the case of any individual who receives a bonus during the taxable year from a TARP business, the tax imposed by this section shall be equal to—

(A)

the tax which would be imposed by this section if the taxable income of such individual for the taxable year were reduced by such bonus, plus

(B)

the amount equal to 90 percent of such bonus.

(2)

TARP business

For purposes of this subsection—

(A)

In general

The term TARP business means any person (or any predecessor of such person) who received assistance under title I of division A the Emergency Economic Stabilization Act of 2008 during the taxable year or any prior taxable year.

(B)

Controlled groups

(i)

In general

For purposes of subparagraph (A), all persons treated as a single employer under subsection (a) or (b) of section 52 or under subsection (m) or (o) of section 414 shall be treated as one person.

(ii)

Inclusion of foreign corporations

For purposes of clause (i), in applying subsections (a) and (b) of section 52 to this section, section 1563 shall be applied without regard to subsection (b)(2)(C) thereof.

(3)

Bonus

For purposes of this subsection, a bonus does not include any amount payable to an individual for services performed by such individual at a regular hourly, daily, weekly, monthly, or similar periodic rate, and does not include payments to an employee as commissions, welfare and fringe benefits, or expense reimbursements.

(4)

Application

Paragraph (1) shall not apply to any bonus paid by a TARP business after the date on which such business has repaid to the United States all of the assistance such business received under title I of division A the Emergency Economic Stabilization Act of 2008.

(b)

Effective date

The amendment made by this section shall apply to taxable years beginning after December 31, 2008.