S 794 — Tax Excessive CEO Pay Act of 2021

(a) Corporations in general A tax is hereby imposed for each taxable year on the taxable income of every corporation. (b) Amount of tax The amount of the tax imposed by subsection (a) shall be 21 percent of taxable income. (c) Exceptions Subsection (a) shall not apply to a corporation subject to a tax imposed by— (1) section 594 (relating to mutual savings banks conducting life insurance business), (2) subchapter L (sec. 801 and following, relating to insurance companies), or (3) subchapter M (sec. 851 and following, relating to regulated investment companies and real estate investment trusts). (d) Foreign corporations In the case of a foreign corporation, the taxes imposed by subsection (a) and section 55 shall apply only as provided by section 882.

(a) Requirements applicable to regulated investment companies The provisions of this part (other than subsection (c) of this section) shall not be applicable to a regulated investment company for a taxable year unless— (1) the deduction for dividends paid during the taxable year (as defined in section 561, but without regard to capital gain dividends) equals or exceeds the sum of— (A) 90 percent of its investment company taxable income for the taxable year determined without regard to subsection (b)(2)(D); and (B) 90 percent of the excess of (i) its interest income excludable from gross income under section 103(a) over (ii) its deductions disallowed under sections 265 and 171(a)(2), and (2) either— (A) the provisions of this part applied to the investment company for all taxable years ending on or after November 8, 1983, or (B) as of the close of the taxable year, the investment company has no earnings and profits accumulated in any taxable year to which the provisions of this part (or the corresponding provisions of prior law) did not apply to it. The Secretary may waive the requirements of paragraph (1) for any taxable year if the regulated investment company establishes to the satisfaction of the Secretary that it was unable to meet such requirements by reason of distributions previously made to meet the requirements of section 4982. (b) Method of taxation of companies and shareholders (1) Imposition of tax on regulated investment companies There is hereby imposed for each taxable year upon the investment company taxable income of every regulated investment company a tax computed as provided in section 11, as though the investment company taxable income were the taxable income referred to in section 11. (2) Investment company taxable income The investment company taxable income shall be the taxable income of the regulated investment company adjusted as follows: (A) There shall be excluded the amount of the net capital gain, if any. (B) The net operating loss deduction provided in section 172 shall not be allowed. (C) The deductions for corporations provided in part VIII (except section 248) in subchapter B (section 241 and following, relating to the deduction for dividends received, etc.) shall not be allowed. (D) The deduction for dividends paid (as defined in section 561) shall be allowed, but shall be computed without regard to capital gain dividends and exempt-interest dividends. (E) The taxable income shall be computed without regard to section 443(b) (relating to computation of tax on change of annual accounting period). (F) The taxable income shall be computed without regard to section 454(b) (relating to short-term obligations issued on a discount basis) if the company so elects in a manner prescribed by the Secretary. (G) There shall be deducted an amount equal to the tax imposed by subsections (d)(2) and (i) of section 851 for the taxable year. (3) Capital gains (A) Imposition of tax There is hereby imposed for each taxable year in the case of every regulated investment company a tax, determined as provided in section 11(b), on the excess, if any, of the net capital gain over the deduction for dividends paid (as defined in section 561) determined with reference to capital gain dividends only. (B) Treatment of capital gain dividends by shareholders A capital gain dividend shall be treated by the shareholders as a gain from the sale or exchange of a capital asset held for more than 1 year. (C) Definition of capital gain dividend For purposes of this part— (i) In general Except as provided in clause (ii), a capital gain dividend is any dividend, or part thereof, which is reported by the company as a capital gain dividend in written statements furnished to its shareholders. (ii) Excess reported amounts If the aggregate reported amount with respect to the company for any taxable year exceeds the net capital gain of the company for such taxable year, a capital gain dividend is the excess of— (I) the reported capital ...

(a) General rule If— (1) a partnership has effectively connected taxable income for any taxable year, and (2) any portion of such income is allocable under section 704 to a foreign partner, such partnership shall pay a withholding tax under this section at such time and in such manner as the Secretary shall by regulations prescribe. (b) Amount of withholding tax (1) In general The amount of the withholding tax payable by any partnership under subsection (a) shall be equal to the applicable percentage of the effectively connected taxable income of the partnership which is allocable under section 704 to foreign partners. (2) Applicable percentage For purposes of paragraph (1), the term “applicable percentage” means— (A) the highest rate of tax specified in section 1 in the case of the portion of the effectively connected taxable income which is allocable under section 704 to foreign partners who are not corporations, and (B) the highest rate of tax specified in section 11(b) in the case of the portion of the effectively connected taxable income which is allocable under section 704 to foreign partners which are corporations. (c) Effectively connected taxable income For purposes of this section, the term “effectively connected taxable income” means the taxable income of the partnership which is effectively connected (or treated as effectively connected) with the conduct of a trade or business in the United States computed with the following adjustments: (1) Paragraph (1) of section 703(a) shall not apply. (2) The partnership shall be allowed a deduction for depletion with respect to oil and gas wells but the amount of such deduction shall be determined without regard to sections 613 and 613A. (3) There shall not be taken into account any item of income, gain, loss, or deduction to the extent allocable under section 704 to any partner who is not a foreign partner. (d) Treatment of foreign partners (1) Allowance of credit Each foreign partner of a partnership shall be allowed a credit under section 33 for such partner’s share of the withholding tax paid by the partnership under this section. Such credit shall be allowed for the partner’s taxable year in which (or with which) the partnership taxable year (for which such tax was paid) ends. (2) Credit treated as distributed to partner Except as provided in regulations, a foreign partner’s share of any withholding tax paid by the partnership under this section shall be treated as distributed to such partner by such partnership on the earlier of— (A) the day on which such tax was paid by the partnership, or (B) the last day of the partnership’s taxable year for which such tax was paid. (e) Foreign partner For purposes of this section, the term “foreign partner” means any partner who is not a United States person. (f) Special rules for withholding on dispositions of partnership interests (1) In general Except as provided in this subsection, if any portion of the gain (if any) on any disposition of an interest in a partnership would be treated under section 864(c)(8) as effectively connected with the conduct of a trade or business within the United States, the transferee shall be required to deduct and withhold a tax equal to 10 percent of the amount realized on the disposition. (2) Exception if nonforeign affidavit furnished (A) In general No person shall be required to deduct and withhold any amount under paragraph (1) with respect to any disposition if the transferor furnishes to the transferee an affidavit by the transferor stating, under penalty of perjury, the transferor’s United States taxpayer identification number and that the transferor is not a foreign person. (B) False affidavit Subparagraph (A) shall not apply to any disposition if— (i) the transferee has actual knowledge that the affidavit is false, or the transferee receives a notice (as described in section 1445(d)) from a transferor’s agent or transferee’s agent that such affidavit or statement is false, or (ii) the Se...