Page 757 - Bruce Ellig - The Complete Guide to Executive Compensation (2007)

742 The Complete Guide to Executive Compensation

1993 Family and Medical Leave Act
• Required employers with more than 50 employees to give up to 12 weeks of unpaid leave to
care for a newborn child or medical emergency of a family member
• Also required continuation of medical coverage while on leave
1993 Revenue Reconciliation Act, also called the Omnibus Budget Reconciliation
Act (OBRA)
• Set corporate tax rate at 35%
• Created new top marginal tax rate of 36% as well as 10% surtax on income over $82,150,
resulting in 39.6% maximum tax on income over $250,000 for single filer
• Set capital gains tax at 28%
• Introduced Section 162(m) limiting pay deductions to $1 million for proxy-named executives
unless linked to performance
• Removed limits on Medicare taxable earnings (was $135,000)
• Raised the alternative minimum tax to 28% (was 24%)
• Established limit of $150,000 credible earnings for pension calculations
• Taxable portion of social security benefit increased to 85% (was 50%) for upper-income recipients
• Increased tax withholding on bonuses to 28% (was 20%)
• Reduced tax deductibility of business meals and entertainment to 50% (was 80%)
• Removed 10% luxury tax on all items except cars
1994 Uniformed Services Employment and Reemployment Rights Act
• Clarified and supplemented coverage of 1974 VEVRRA
1994 Retirement Protection Act
• Made administrative changes on cashout values, mortality table, and underfunded plans
1995 Consolidated Omnibus Budget Reconciliation Act (COBRA)
• Required continuation of medical expense coverage for terminated employees and certain
dependents
1995 Private Securities Litigation Act
• Plaintiffs (not lawyers) are responsible for directing class action lawsuits
1996 Family and Medical Leave Act of 1996 (FMLA)
• Required up to 12 weeks’ unpaid leave per year for specified personal problems
1996 Health Insurance Portability and Accountability Act
• Eliminated eligibility discrimination of health-related factors
• Liberalized coverage of preexisting conditions
• Provided favorable tax treatment for qualified long-term care
• Introduced medical savings accounts
• Loan interest resulting from borrowing to buy corporate-owned life insurance no longer tax
deductible
• Added COBRA clarifications
1996 Congressional Accountability Act
• Required members of Congress to apply employment laws to their staffs
1996 Source Tax
• Prohibited states from taxing much of the income earned while working in that state by indivi-
duals who have since moved elsewhere (affects pension payments and other deferred compensation)
1996 Taxpayer Bill of Rights, also called Small Business Job Protection Act
• Introduced Savings Incentive Match Plan for Employees (SIMPLE) for small businesses
• Excluded from income accelerated death benefits from life insurance contracts for terminally ill