Stop Subsidizing Giant Mergers Act

Key Points

• This bill would end the tax-free treatment of large corporate mergers and acquisitions by amending the Internal Revenue Code. Currently, big companies can restructure through mergers without paying taxes on the transaction, which critics say gives them an unfair advantage.
• The new rules kick in when the companies involved in a deal have combined average annual gross receipts exceeding $500 million over the prior three tax years. Deals below that threshold would still qualify for existing tax-free treatment.
• The bill carves out exceptions for companies that are already under the same corporate ownership or control, meaning internal reorganizations within existing corporate families would not be affected.
• The $500 million threshold would be adjusted for inflation each year starting after 2026, rounding to the nearest $1 million, so that the law continues to target only the largest deals over time.
• The bill has bipartisan sponsorship from Sen. Whitehouse (D-RI) and Sen. Hawley (R-MO), which is notable because tax policy rarely attracts cross-party support. It was referred to the Senate Finance Committee upon introduction.
• The changes would apply to all qualifying mergers and transfers completed after the bill is signed into law, with no phase-in period or delayed effective date.