08:56 AM EDT, 03/21/2024 (MT Newswires) -- US legislators are drafting a proposal that would remove companies' ability to create big tax-free mergers such as the ongoing Capital One Financial ( COF ) and Discover (DFS) transaction, the Wall Street Journal reported Thursday.

Sens. Sheldon Whitehouse - Democrat, Rhode Island - and J.D. Vance - Republican, Ohio - are drafting a bill that would require shareholders receiving stock through such mergers to immediately be charged capital-gains taxes under the proposed law, instead of deferring taxes until they sell their shares, the Journal said.

AT&T's ( T ) Time Warner deal and Canadian Pacific's (CP) purchase of Kansas City Southern could be affected by the proposal, the report said. The rule would reportedly exempt companies with annual revenue of below $500 million.

The legislators plan to introduce the bill on Thursday, the report said.

Offices of both Whitehouse and Vance did not immediately respond to MT Newswires' requests for comment.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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