March 21 (Reuters) - Two U.S. senators are planning to

introduce a proposal that would eliminate the ability of

companies to do tax-free mergers, the Wall Street Journal

reported on Thursday.

Under the bill put forth by Democrat Sheldon Whitehouse and

Republican J.D. Vance, shareholders who receive stock in a deal

would owe capital-gains taxes immediately, the report said,

citing statements from the lawmakers.

Typically, capital gains taxes are deferred until

shareholders sell their stock.

Raising tax on corporations and billionaires has long been a

part of the Biden administration's agenda. In his State of the

Union address earlier this month, President Joe Biden announced

plans to hike corporate minimum taxes and cut deductions for

executive pay and corporate jets.

The bill also marks a rare effort at bipartisan legislation

in an otherwise divided Congress, which has led to impasses over

some key policy matters.

The senators plan to introduce the legislation on Thursday,

the report said, adding that the bill would have exceptions for

companies that make less than $500 million in annual revenue.

Credit card issuer Capital One's $35.3 billion

all-stock deal for Discover Financial is among the

recently announced mergers that could be affected by the bill.

Whitehouse's office did not immediately respond to a Reuters

request for comment, while Vance could not be reached.

(Reporting by Niket Nishant in Bengaluru; Editing by Arun

Koyyur)