# Plain Language Summary: Stop Subsidizing Multimillion Dollar Corporate Bonuses Act

Right now, large corporations can deduct executive bonuses from their taxes, which effectively means taxpayers are helping to subsidize those massive paychecks. This bill closes that loophole by preventing publicly traded companies from writing off executive compensation as a business expense—but only for certain high-paid individuals.

Currently, the tax code limits deductions for executive pay at around $1 million per person per year, but there are exceptions and workarounds that allow companies to deduct much more. This bill expands who counts as a "covered individual" whose pay can't be deducted. Instead of just limiting deductions for the CEO and CFO, the new rule would apply to basically anyone working for the company who earns a lot of money, as well as anyone who was a top executive or top-three paid officer at any point since 2017. The bill also changes the definition of which companies are affected—it would now include any company that was required to file reports with the Securities and Exchange Commission (SEC) at any point during the previous three years, catching more corporations than the current rule.

The practical effect is that when a publicly traded company pays a senior executive a multimillion-dollar bonus, they can no longer deduct that full amount from their taxes. This means the company pays more in federal taxes, which increases government revenue. The bill applies to compensation paid starting in 2025. While this doesn't directly affect most workers, it could influence how corporations structure executive pay and might modestly increase tax revenue—money that could theoretically go toward other government programs or deficit reduction.