I 
111TH CONGRESS 
1ST SESSION H. R. 1594 
To amend the Internal Revenue Code of 1986 to limit the deductibility 
of excessive rates of executive compensation. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 18, 2009 
Ms. LEE of California (for herself, Ms. WOOLSEY, Mr. COHEN, and Mr. FIL-
NER) 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 limit the 
deductibility of excessive rates of executive compensation. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Income Equity Act 
of 2009’’. 
SEC. 2. DENIAL OF DEDUCTION FOR PAYMENTS OF EXCES-
SIVE COMPENSATION. 
(a) IN GENERAL.—Section 162 of the Internal Rev-
enue Code of 1986 (relating to deduction for trade or busi-
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ness expenses) is amended by inserting after subsection 
(h) the following new subsection: 
‘‘(i) EXCESSIVE COMPENSATION.— 
‘‘(1) IN GENERAL.—No deduction shall be al-
lowed under this chapter for any excessive com-
pensation with respect to any full-time employee. 
‘‘(2) EXCESSIVE
COMPENSATION.—For pur-
poses of this subsection, the term ‘excessive com-
pensation’ means, with respect to any employee, the 
amount by which— 
‘‘(A) the compensation for services per-
formed by such employee during the taxable 
year, exceeds 
‘‘(B) the greater of— 
‘‘(i) an amount equal to 25 times the 
lowest compensation for services performed 
by any other full-time employee during 
such taxable year, or 
‘‘(ii) $500,000. 
‘‘(3) DEFINITIONS AND SPECIAL RULES.—For 
purposes of this subsection— 
‘‘(A) COMPENSATION.— 
‘‘(i) IN
GENERAL.—The term ‘com-
pensation’ includes wages, salary, deferred 
compensation, 
retirement 
contributions, 
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options, bonuses, property, and any other 
form of compensation or bonus that the 
Secretary of the Treasury determines is 
appropriate. 
‘‘(ii) PART-YEAR EMPLOYEES.—In the 
case of any part-year employee, the com-
pensation of the employee shall be com-
puted on an annualized basis. 
‘‘(B) EMPLOYER.—All persons treated as a 
single employer under subsection (a) or (b) of 
section 52 or subsection (m) or (o) of section 
414 shall be treated as 1 employer. 
‘‘(4) REPORTING.—Each employer who provides 
compensation in any taxable year to any employee in 
an amount which is more than 25 times the amount 
of the lowest-compensated full-time employee, shall 
file a report with the Secretary containing— 
‘‘(A) the compensation of the lowest-com-
pensated full-time employee, 
‘‘(B) the average pay of all non-managerial 
employees, 
‘‘(C) the average pay of all executive staff, 
and 
‘‘(D) the exact compensation of the top 5 
employees of the company. 
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Any such report shall be filed at such time and in 
such manner as the Secretary may require.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
Æ 
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