I 

111TH CONGRESS 

1ST SESSION H. R. 1518 

To amend the Internal Revenue Code of 1986 to impose a higher rate 

of tax on bonuses paid by businesses receiving TARP funds. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 16, 2009 

Mr. ISRAEL (for himself, Mr. BRALEY of Iowa, Mr. CHANDLER, Mrs. MCCARTHY of New York, and Mr. MASSA) 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 higher rate of tax on bonuses paid by businesses receiving TARP funds. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Bailout Bonus Tax 

5 Bracket Tax Act of 2009’’. 

6 SEC. 2. HIGHER RATE OF TAX ON BONUSES PAID BY BUSI7 NESSES RECEIVING TARP FUNDS. 

8 (a) IN GENERAL.—Section 1 of the Internal Revenue 

9 Code of 1986 (relating to tax imposed on individuals) is 


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1 amended by adding at the end the following new sub2 section: 

3 ‘‘(j) RATE OF TAX ON BONUSES PAID BY BUSI4 NESSES RECEIVING TARP FUNDS.— 

5 ‘‘(1) IN GENERAL.—In the case of any indi6 vidual who receives a TARP bonus during the tax7 able year, the tax imposed by this section shall be 

8 equal to— 

9 ‘‘(A) the tax which would be imposed by 

10 this section if the taxable income of such indi11 vidual for the taxable year were reduced by the 

12 TARP bonus of such individual, plus 

13 ‘‘(B) the amount equal to the applicable 

14 percentage of the TARP bonus. 

15 ‘‘(2) APPLICABLE PERCENTAGE.—For purposes 

16 of the subsection, the applicable percentage shall be 

17 determined under the following table: 

‘‘If the aggregate TARP bonuses received during the 

taxable year is: 

The applicable percentage is: 

Over $100,000 ............................... 100 percent. 

18 ‘‘(3) TARP BONUS.—For purposes of this sub19 section— 

20 ‘‘(A) IN GENERAL.—The term ‘TARP 

21 bonus’ means any payment in the nature of a 

22 bonus which is paid by any person if— 


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1 ‘‘(i) such person (or any predecessor 

2 of such person) received assistance under 

3 title I of division A the Emergency Eco4 nomic Stabilization Act of 2008 during the 

5 taxable year or any prior taxable year, or 

6 ‘‘(ii) such person acquired a major 

7 portion of a trade or business, or the 

8 major portion of a separate unit of a trade 

9 or business, from any person which re10 ceived such assistance with respect to such 

11 portion or unit. 

12 ‘‘(B) CONTROLLED GROUPS.— 

13 ‘‘(i) IN GENERAL.—For purposes of 

14 subparagraph (A), all persons treated as a 

15 single employer under subsection (a) or (b) 

16 of section 52 or under subsection (m) or 

17 (o) of section 414 shall be treated as one 

18 person. 

19 ‘‘(ii) INCLUSION OF FOREIGN COR20 PORATIONS.—For purposes of clause (i), in 

21 applying subsections (a) and (b) of section 

22 52 to this section, section 1563 shall be 

23 applied without regard to subsection 

24 (b)(2)(C) thereof.’’. 


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1 (b) EFFECTIVE DATE.—The amendment made by 

2 this section shall apply to taxable years ending after the 

3 date of the enactment of this Act. 

Æ 


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