Two U.S. senators are planning to introduce a proposal that would eliminate the ability of companies to do tax-free mergers, the Wall Street Journal reported on Thursday.
Under the bill put forth by Democrat Sheldon Whitehouse and Republican J.D. Vance, shareholders who receive stock in a deal would owe capital-gains taxes immediately, the report said, citing statements from the lawmakers.
“Typically, capital gains taxes are deferred until shareholders sell their stock.”
Raising tax on corporations and billionaires has long been a part of the Biden administration’s agenda. In his State of the Union address earlier this month, President Joe Biden announced plans to hike corporate minimum taxes and cut deductions for executive pay and corporate jets.
The bill also marks a rare effort at bipartisan legislation in an otherwise divided Congress, which has led to impasses over some key policy matters.
The senators plan to introduce the legislation on Thursday, the report said, adding that the bill would have exceptions for companies that make less than $500 million in annual revenue.
Credit card issuer Capital One’s $35.3 billion all-stock deal for Discover Financial is among the recently announced mergers that could be affected by the bill.
Whitehouse’s office did not immediately respond to a Reuters request for comment, while Vance could not be reached.
