1. Close the "Performance Pay" Loophole

The more corporations pay their executives, the less they pay in federal taxes, thanks to a tax code loophole that lets corporations deduct unlimited amounts of executive compensation from their taxable income -- as long as they label the pay "performance-based." This loophole stems from a 1993 Clinton administration reform meant to address widespread public outrage over runaway CEO pay. The reform -- Section 162(m) of the federal tax code -- placed a $1 million cap on the deductibility of executive compensation. But by exempting "performance pay," the reform invited an explosion of executive compensation in the form of deductible stock options, performance shares, and other bonuses designed to meet the exemption criteria.

A recent Institute for Policy Studies analysis has found that America's top 20 banks paid out more than $2 billion in fully deductible performance bonuses to their top five executives between 2012 and 2015, a windfall that translates into a taxpayer subsidy worth more than $725 million, or $1.7 million per executive per year.

Senators Jack Reed and Richard Blumenthal and Rep. Lloyd Doggett have recently introduced the Stop Subsidizing Multimillion Dollar Corporate Bonuses Act (S. 82 and HR 399), which would eliminate the "performance pay" loophole. The Joint Committee on Taxation estimates this legislation would generate $50 billion over 10 years. READ MORE