Fitzpatrick and Colleagues Introduce STOP Act

Legislation Ends Taxpayer Subsidies of Sexual Misconduct in Hollywood and Other Industries

November 30, 2017

Washington, D.C. – Today, Rep. Brian Fitzpatrick (PA-08), along with Reps. Dave Brat (VA-07), Ken Buck (CO-04), Tom Garrett (VA-05), Jody Hice (GA-10), Mike Johnson (LA-04), Steve Pearce (NM-02), and Scott Taylor (VA-02), introduced H.R. 4495, the Settlement Tax Deductions are Over for Predators Act (STOP Act), legislation to prohibit the deductibility of legal settlements related to sexual assault and sexual harassment as business expenses.

“Whether it’s Hollywood, Congress or a corporate boardroom, there is no place for sexual abuse or harassment in the workplace. Just as I’m committed to protecting taxpayer dollars from being misused in Washington to cover up sexual misconduct allegations, I’m also committed to preventing private sector businesses from using tax breaks to sweep these heinous acts under the rug. This Congress must stand with the victims of this harassment and take swift action to root out those who would sexually harass any other person, regardless of position or title,” said Congressman Brian Fitzpatrick.

When we allow companies to deduct sexual assault and sexual harassment related settlements, we’re asking the American taxpayer to subsidize hush money payments that cover-up sexual misconduct,” Congressman Ken Buck stated.

“Our tax code should make it harder, not easier, for sexual misconduct to occur in the workplace,” said Congressman Scott Taylor. “Currently, the tax code allows companies to deduct sexual assault and harassment settlements. As with lawmakers using our tax dollars for settlements, this is outrageous.  These should have never been burdens the tax payer bears.”  

“There is absolutely no place for sexual harassment in the workplace or anywhere. Using taxpayer dollars to hide sexual harassment claims does nothing but protect the wrongdoer. It is shameful, and it must be stopped. I will continue to seek solutions that empower those who have fallen victim to sexual harassment and promote initiatives that combat this behavior,” stated Congressman Mike Johnson.

“This bill is long overdue. American taxpayers should not be footing the bill for settlements related to sexual assault and sexual harassment. I’m proud to work with my colleagues today to ensure no one, regardless of their wealth or power is able to write off the crimes they commit,” stated Rep. Steve Pearce.

Currently, companies can deduct as ordinary and necessary business expenses any legal settlements, fines, fees, and expenses related to sexual assault and sexual harassment cases. In allowing businesses to write off these expenses, the American taxpayer is effectively subsidizing the cost of resolving legal issues related to sexual misconduct. The STOP Act would prohibit deduction of these expenses in cases where the allegations are public or in cases involving a non-disclosure agreement.

S.1, the Tax Cuts and Jobs Act, which is being considered by the U.S. Senate today, includes similar language. The legislation offered by Buck and the original co-sponsors shows support in the House of Representatives for the inclusion of this language in a final tax bill package.