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[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4414 Introduced in House (IH)]

111th CONGRESS
  2d Session
                                H. R. 4414

 To amend the Internal Revenue Code of 1986 to impose a 75 percent tax 
       on bonuses paid by certain financial and other businesses.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                            January 12, 2010

   Mr. Kucinich (for himself, Ms. Watson, Ms. Norton, Mr. Clay, Mr. 
    Ellison, and Mr. Hare) 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 75 percent tax 
       on bonuses paid by certain financial and other businesses.

    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 ``Responsible Banking Act of 2010''.

SEC. 2. FINDINGS.

    The Congress hereby finds:
            (1) Excessive use of financial leverage contributed to the 
        ongoing U.S. financial and economic crisis.
            (2) The largest U.S. banks remain severely 
        undercapitalized.
            (3) U.S. banks have failed to recognize losses from 
        imprudent investments, particularly in assets linked to home 
        mortgages and commercial real estate, and the resulting 
        economic uncertainty and household indebtedness are major 
        impediments to U.S. economic recovery.
            (4) Multiple large public subsidies have been extended to 
        the financial services industry in the form of cost-free access 
        to capital, low-cost Federal loans and guarantees, Federal 
        purchases of troubled assets, and other exceptional actions 
        taken and policies put in place since January 2008.
            (5) These public subsidies represent an extraordinary 
        benefit to all industry participants in the financial 
        marketplace, regardless of whether they have received direct 
        Federal assistance.
            (6) A short-term focus on compensation has encouraged 
        banking decision-makers to underestimate business risks, has 
        undermined effective corporate risk management, and has thereby 
        contributed to excessive systemic risk.
            (7) Existing regulatory rules and institutions have proven 
        inadequate to protect the American people from ineffective and 
        imprudent risk management.
            (8) The flow of credit to small and medium-sized businesses 
        and to households continues to contract, impeding overall 
        economic recovery.
            (9) Enhanced capital adequacy is urgently needed to restore 
        the health of the U.S. banking system.
            (10) The use of profits to pay bonuses rather than 
        recapitalize financial institutions delays recovery of 
        financial institutions and impedes recovery in the real 
        economy.

SEC. 3. TAX ON BONUSES PAID BY CERTAIN FINANCIAL AND OTHER BUSINESSES.

    (a) In General.--Subtitle D of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new chapter:

   ``CHAPTER 48--TAX ON BONUSES PAID BY CERTAIN FINANCIAL AND OTHER 
                               BUSINESSES

``Sec. 5000A. Bonuses paid by certain businesses.

``SEC. 5000A. BONUSES PAID BY CERTAIN BUSINESSES.

    ``(a) Imposition of Tax.--There is hereby imposed a tax equal to 75 
percent of any bonus paid for services performed in any specified 
business.
    ``(b) Liability for Tax.--The tax imposed by subsection (a) shall 
be paid by the person paying the bonus.
    ``(c) Specified Business.--For purposes of this section, the term 
`specified business' means--
            ``(1) the Federal National Mortgage Association,
            ``(2) the Federal Home Loan Mortgage Corporation,
            ``(3) any business as a financial institution, insurance 
        company, hedge fund, financial adviser, or a broker or dealer 
        in securities, and
            ``(4) any lending or finance business.
    ``(d) Termination.--This section shall not apply to bonuses paid 
more than 5 years after the date of the enactment of this section.''.
    (b) Tax Not Deductible.--Paragraph (6) of section 275(a) of such 
Code is amended by inserting ``48,'' after ``46,''.
    (c) Clerical Amendment.--The table of chapters for subtitle D of 
such Code is amended by adding at the end the following new item:

   ``Chapter 48. Tax on Bonuses Paid by Certain Financial and Other 
                             Businesses.''.

    (d) Effective Date.--The amendments made by this section shall 
apply to bonuses paid after the date of the enactment of this Act.
                                 <all>
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