A popular compensation perk enjoyed by top executives is in the cross-hairs of the Senate Finance Committee.
When the legislators meet on Wednesday, they will consider a $1 million annual cap on the amount that executives and other highly paid employees can place tax-free into a deferred compensation plan, reported the Washington Post.
According to the paper, if the proposal is eventually approved, it would raise taxes on hundreds of wealthy individuals by an estimated $806 million over 10 years.
The Finance Committee proposal addresses a continuing public outcry over soaring executive pay, especially in light of gargantuan severance packages like that granted to former Home Depot chairman, president, and chief executive officer Robert Nardelli. It also comes amid a growing scandal involving the backdating of stock option grants, which inflated the earnings for many executives.
The proposal on deferred compensation, added the Post, is just one of more than a dozen provisions aimed at shrinking corporate tax shelters and closing tax loopholes that will be submitted by Chairman Max Baucus (D-Mont.) at Wednesday’s committee meeting.
Altogether, the provisions could boost federal tax revenue by more than $8 billion over the next 10 years, according to the paper, which cited preliminary estimates from the committee.