Sen. JD Vance (R-Ohio), a Trump-aligned rising conservative star, and Sen. Sheldon Whitehouse (D-R.I.), a leading liberal advocate of fighting climate change, have formed the Senate’s newest odd couple by joining forces to eliminate tax breaks for corporate consolidation.

Vance and Whitehouse on Thursday unveiled the Stop Subsidizing Mergers Act, which would end the tax-free treatment for corporate mergers and acquisitions involving firms with average annual gross receipts of more than $500 million over a three-year span.

They introduced the bill in response to the dramatic increase in large corporate mergers, which have nearly doubled over the past 10 years.

Under current law, if a corporate merger is structured so that the firm making the acquisition does so by exchanging stock, the increase in value of the company being acquired is often considered tax exempt. This allows shareholders to avoid taxes on the appreciation of the acquired company’s value at the time of sale, the bill’s sponsors say.

Under their proposal, shareholders who see the value of their holdings increase in all-stock mergers would pay taxes on the gains they receive from the merger instead of waiting until they sell the new shares to pay taxes.

Vance and Whitehouse say that in practice, corporations and shareholders can escape paying any taxes by continually deferring their obligations to the federal government.

“Massive corporate mergers rarely produce their promised benefits but often leave American workers and families behind. It’s past time to close the unfair loopholes that allow these deals to escape tax liability. This commonsense, bipartisan legislation will ensure our nation’s largest corporations are held to a fair standard while preserving protections for small businesses to grow,” Vance said in a statement.

Whitehouse said “our bipartisan bill will end a massive tax giveaway for giant corporate mergers and get our government out of the business of subsidizing corporate consolidation.”

He argued that the record number of large corporate mergers have created an anti-competitive economic landscape.

“The families who get stuck paying higher prices as a result of these mega-mergers should not also have to foot the tax bill for them,” he said in his statement.

The senators say 40 percent of U.S. corporate mergers — when measured by aggregate value — since 2007 have been structured as stock exchanges.

They noted that in 2021, more than half the mergers exceeding $1 billion were tax free.

They cited Facebook’s $19 billion acquisition of WhatsApp in 2014, AT&T’s $85 billion acquisition of Time Warner in 2018, and Capital One’s $35 billion acquisition of Discover this year as prominent examples.