Bernie Sanders Proposes Tax Hike For Companies With High CEO Pay Ratios: 'Americans...Outraged By Extreme Gaps'

Sen. Bernie Sanders (I-Vt.), along with a group of Democratic lawmakers, is reportedly spearheading a bill proposing an increase in taxes for companies that pay their CEOs 50 times more than their median worker.

What Happened: The Tax Excessive CEO Pay Act has been introduced to mitigate corporate greed by imposing taxes on companies with high CEO-to-worker pay ratios. The bill could potentially impact some of the largest corporations and employers in the US, including Walmart Inc. WMT, Alphabet Inc. GOOGL, Home Depot Inc. HD, JPMorgan Chase & Co. JPM, Nike Inc. NKE, and McDonald’s Corporation MCD, reported Reuters.

“Americans across the political spectrum are outraged by the extreme gaps between CEO and worker pay,” the group said.

The legislators expect the bill to generate $150 billion in U.S. revenue over a 10-year period. The tax increase could be circumvented by companies if they opt to elevate worker pay and diminish CEO salaries.

The proposed legislation introduces a tax rate hike for companies with a CEO-to-worker pay ratio surpassing 50 to 1. The maximum tax penalty proposed is 5 percentage points for enterprises where the top executive’s salary is more than 500 times the average worker’s pay.

For the bill to pass the Senate, it requires 60 votes. Although the Democrats hold a narrow majority in the Senate, the bill is likely to face resistance in the Republican-dominated House of Representatives.

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Why It Matters: This isn’t the first time Senator Sanders has aimed at corporate greed. As documented in 2022, Sanders criticized Chipotle Mexican Grill for increasing its profits by 181% to $764 million and giving its CEO a 137% pay raise to $38 million in 2020. He attributed the rising cost of a burrito not to inflation but to “corporate greed” and “price gouging.”

In May 2023, Sanders also targeted America’s billionaires for legally paying less income tax than the average American. His consistent campaign against income disparity and corporate greed forms the backdrop for this new legislative proposal.

Photo by Evan El-Amin on Shutterstock

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