Unlike the House bill, the Senate bill would impose a tax both on the company giving the bonus and on the individual receiving it.
The penalty is part of a new section of the tax code clamping down on salary and bonus deferrals, executive retirement and benefit plans, severance packages, discounted stock options and even stock appreciation rights.
Among the tax options on the table, which also include a global financial transaction fee (called a "Tobin tax" after Nobel-winning economist James Tobin, who proposed a tax on foreign-currency transactions in the 1970s) and a Bonus Tax, a risk-based fee is the most efficient solution.
Last week they voted against Labour's motion on the bonus culture, greater transparency on top pay and the need for a new tax on bank bonuses to fund 100, 000 jobs for young people.
For small business owners who operate as a pass-through entity (a partnership or a sub S), the bonus depreciation deduction ultimately comes through on their individual tax returns.
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Sarkozy, a man constitutionally uncomfortable unless the spotlight is shining on him, has even threatened to walk out of the G-20 proceedings rather than sign up to anything he doesn't consider tough enough on reining back tax havens, policing hedge funds and restricting the bonus culture.
In the shorter term the political provocation of the bonus payouts is likely to increase demand for a windfall tax on bonuses or salary caps.
Because the threshold for couples is less than double that for singles, the tax imposes a marriage penalty on couples with two high earners but gives a bonus to those with a high earner and a low- or non-earner.
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An added bonus: It doesn't help raise Medicare premiums or tax on Social Security payments.
Republican Whip Jon Kyl on Thursday blocked the Senate's attempt to pass by unanimous consent a similar bonus-tax bill.
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