The new GOP tax bill has been making headlines for weeks. The relative pros and cons of the bill have been a subject of heated debate in Washington. For the passive onlooker, it can all be a bit too much to make sense of.
However, a new proposal has been added to the bill recently, and it addresses a subject you might not expect. In the wake of the myriad sexual harassment allegations that have been popping up against high-profile people across the country, U.S. senator Robert Menendez has proposed an amendment to the bill that is aimed at removing tax subsidies for sexual predators.
The proposal adds a stipulation prohibiting business-related tax deductions on payouts or attorney’s fees associated with sexual harassment/abuse cases involving a nondisclosure agreement (NDA). Without an NDA, the savings a business stands to save in sexual harassment-related tax deductions is considerable. If, for instance, a company settles a sexual abuse case for $10 million, it could receive $2.1 million back in taxes. With an NDA, the company is liable for the full $10 million.
While the proposal may seem like a step forward in penalizing perpetrators of sex crimes, critics say the amendment doesn’t go far enough. They claim that many big businesses may still be motivated to pursue an NDA—even if it results in a higher tax bill. They argue that the reputational damage risked in the absence of an NDA could lead to financial loss that far exceeds the additional tax expense that comes with an NDA in place.