Vermont Sen. Bernie Sanders introduced legislation Wednesday that would targeting companies who pay executives 50 times more than their median worker.
The legislation, titled the Tax Excessive CEO Pay Act, aims to combat corporate greed and “end outrageous CEO pay,” Sen. Bernie Sanders said in a press release Wednesday. Sens. Elizabeth Warren, Ed Markey and Chris Van Hollen, along with Reps. Barbara Lee and Rashida Tlaib, joined Sanders in introducing the bill.
“At a time of massive income and wealth inequality, the American people are demanding that large, profitable corporations pay their fair share of taxes and treat their employees with the dignity and respect they deserve,” Sanders said in a statement. “That is what this legislation will begin to do.”
Warren said the bill was a good start in an effort to decrease rising income inequality in the U.S. The Massachusetts senator added that workers can be credited for the profits generated by corporations, but executives have reaped the benefits. (RELATED: These Mega Corporations Pay Their Employees So Little They Need To Rely On Government Handouts, Report Finds)
Corporations that pay their CEO, or top-paid employee, between 50 and 100 times more than their median employee would be hit with a 0.5% tax increase under the legislation. The penalty steadily increases based on how much more a corporations’ top employee makes than the median worker until it reaches 5% for corporations that pay their top employee more than 500 times the amount they pay their median employee.
“Corporate greed is a disease that has long afflicted this country—but the COVID-19 pandemic highlighted the gross income inequality and pay gap between CEOs and their employees in a way it never has been before,” Tlaib said in a statement.
If companies that currently have these pay patterns didn’t alter their executive compensations, the legislation would raise $150 billion in tax revenue over the next ten years. The tax increase would be tacked onto companies’ current corporate tax rate.
The legislation would penalize Walmart $854.9 million, Home Depot $550.8 million, JPMorgan Chase $172.8 million and Nike $147.7 million if the companies maintain their current executives compensation, Sanders’ office said in the press release.
The Tax Excessive CEO Pay Act also would give the Treasury Department the ability to make rules preventing tax avoidance and would make private companies’ pay-ratio data available for the public.
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