July 25, 2019 - Issue: Vol. 165, No. 126 — Daily Edition116th Congress (2019 - 2020) - 1st Session

[Pages S5110-S5111]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. REED (for himself, Mr. Blumenthal, Mr. Whitehouse, Mr. 
        Merkley, Ms. Baldwin, Ms. Warren, Mr. Van Hollen, and Mr. 
        Brown):
  S. 2268. A bill to amend the Internal Revenue Code of 1986 to expand 
the denial of deduction for certain excessive remuneration, and for 
other purposes; to the Committee on Finance.
  Mr. REED. Mr. President, I am introducing the Stop Subsidizing 
Multimillion Dollar Corporate Bonuses Act with Senators Blumenthal, 
Whitehouse, Merkley, Baldwin, Warren, Van Hollen, and Brown. This 
legislation would end special tax deductions for huge executive bonuses 
by closing a loophole that still allows publicly traded corporations to 
deduct the cost of multimillion-dollar bonuses from their corporate tax 
bills. U.S. taxpayers shouldn't have to subsidize these massive 
bonuses.
  Under section 162(m) of the tax code as amended by the 2017 Trump tax 
law (TCJA), when a publicly traded corporation calculates its taxable 
income, it is generally permitted to deduct the cost of compensation 
from its revenues, with limits up to $1 million for some of the firm's 
most senior executives.
  In the last Congress, the TCJA closed some of the pre-existing 162(m) 
loopholes by incorporating provisions from my Stop Subsidizing 
Multimillion Dollar Corporate Bonuses Act, including removing the 
exemption for performance-based compensation, which previously 
permitted compensation deductions above $1 million when executives met 
performance benchmarks set by the corporation's Board of Directors.
  In addition, a technical correction from my bill to ensure that all 
publicly traded corporations that are required to provide quarterly and 
annual reports to their investors under Securities and Exchange 
Commission rules and regulations are subject to section l62(m) was also 
included in the TCJA. Previously, this section of the tax code only 
covered some publicly traded corporations who are required to provide 
these periodic reports to their shareholders.
  While these were positive steps, even more should have been done, 
such as applying section 162(m) to all employees of publicly traded 
corporations so that all compensation is subject to a deductibility cap 
of $1 million. This was the lone provision from my Stop Subsidizing 
Multimillion Dollar Corporate Bonuses Act from the 115th Congress that 
was not incorporated into the Trump tax law.
  Partially closing these 162(m) loopholes saved taxpayers $9.2 billion 
according to the Joint Committee on Taxation (JCT), but according to 
Americans for Tax Fairness, ``Extending the $1 million deductibility 
cap to all forms of compensation for all employees might generate about 
$20 billion over 10 years. This is based on JCT's original $50 billion 
revenue estimate, discounted to $30 billion because of the 40% 
corporate tax cut, and subtracting the $9.2 billion already being 
raised by the TCJA's partial reform.''
  This is why we are introducing a revised version of the Stop 
Subsidizing Multimillion Dollar Corporate Bonuses Act to finish what 
was started. Our legislation would extend section 162(m) to all 
employees of publicly traded corporations so that all compensation is 
subject to a deductibility cap of $1 million. Publicly traded 
corporations would still be permitted to pay their executives as much 
as they desire, but compensation above and beyond $1 million would no 
longer be subsidized by other hardworking taxpayers through our tax 
code.
  Our legislation tackles this issue head on by ending the public 
subsidy of excessive executive compensation. This is simply a matter of 
fairness, ensuring that corporations--and not hardworking taxpayers who 
face their own challenges in this economy--are paying for the multi-
million dollar bonuses corporations have decided to dole out to their 
senior executives.
  We need to prioritize tax breaks that grow our economy and strengthen 
the middle class, and this bill helps eliminate some of the unfairness 
in the tax code.
  I thank Public Citizen, the Institute for Policy Studies, Global 
Economy Project, Americans for Financial Reform, the AFL-CIO, and MIT 
Professor Simon Johnson for their support. I also want to thank Senator 
Blumenthal for working with me on this issue, and I urge our colleagues 
to join us in cosponsoring this legislation.
                                 ______
                                 
      By Ms. HIRONO (for herself and Mr. Tillis):
  S. 2281. A bill to amend chapter 11 of title 35, United States Code, 
to require the voluntary collection of demographic information for 
patent applications, and for other purposes; to the Committee on the 
Judiciary.
  Ms. HIRONO. Mr. President, I rise today to introduce the Inventor 
Diversity for Economic Advancement Act of 2019. I thank my colleague 
from North Carolina, Senator Tillis, for working with me on this 
important piece of legislation, which serves as a first step to closing 
the diversity gap in our patent system by collecting demographic data 
on patent applicants.
  Women and racial minorities have made some of the most significant 
inventions in this country's history. The $75 billion home security 
industry grew from an initial home security system invented by Marie 
Van Brittan Brown. The computer would never have become the multimedia 
device it is today without the microcomputer system invented by Mark 
Dean. The genetic revolution would still be science fiction if not for 
the CRISPR gene-editing tool discovered by Jennifer Doudna--raised on 
Hawaii's Big Island.
  We should celebrate these inventors and the many others like them who 
have contributed to innovation in this country. But we must also 
recognize the hard truth that women, racial minorities, and many other 
groups are greatly underrepresented in the U.S. patent system.
  The Patent and Trademark Office's recent report on women inventors 
shines a spotlight on one part of this problem. The PTO found that only 
21 percent of U.S. patents list a woman as an inventor and that women 
make up only 12 percent of all inventors. This is true even though 
women held 43 percent of all full-time jobs in 2016 and 28 percent of 
STEM jobs in 2015.
  Other reports highlight racial and income patent gaps. For example, a 
report by the Institute for Women's Policy Research found that the 
percentage

[[Page S5111]]

of African American and Hispanic college graduates who hold patents is 
approximately half that of their white counterparts. Another report 
found that children born into families with incomes below the median 
U.S. income are 90 percent less likely to receive a patent in their 
lifetimes than those born into wealthier families.
  Closing these gaps would turbocharge our economy. According to a 
study by Michigan State University Professor Lisa Cook, including more 
women and African Americans in the ``initial stage of the process of 
innovation'' could increase GDP by as much as $640 billion. Another 
study by the National Bureau of Economic Research found that 
eliminating the patent gap for women with science and engineering 
degrees alone would increase GDP by over $500 billion.
  It's simply good policy and good business to want to fully integrate 
people of all types into our innovation economy.
  But if we have any hope of closing the various patent gaps, we must 
first get a firm grasp on the scope of the problem.
  Studies of the demographic makeup of patentees, like the ones I 
described, are few and far between. The reason is a simple one. A lack 
of data. The PTO does not collect any data on applicants beyond their 
first and last names and city, state, and country of residence. As a 
result, those wishing to study patent gaps between different 
demographic groups are forced to guess the gender of an applicant based 
on his or her name, determine the race or income status of an applicant 
by cross-referencing census data, or explore a number of other options 
that are time-consuming, unreliable, or both.
  The IDEA Act solves this problem. It would require the PTO to collect 
demographic data--including gender, race, military or veteran status, 
and income level, among others--from patent applicants on a voluntary 
basis. It would further require the PTO to issue reports on the data 
collected and, perhaps more importantly, make the data available to the 
public with appropriate protections for personally identifiable 
information. Outside researchers could therefore conduct their own 
analyses and offer insights into the various patent gaps in our 
society.
  Let me be clear. Closing the information gap facing researchers alone 
will not solve the patent gap facing women, racial minorities, and so 
many others. But it is a critical first step. I therefore encourage my 
colleagues to support the IDEA Act.

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