Sanders, Democrats want to hike taxes on companies with 'excessive' CEO pay
- Sen. Bernie Sanders and a group of congressional Democrats are introducing a bill to increase corporate taxes for companies paying CEOs at least 50 times more than the median pay for their workers.
- Republicans are unlikely to sign off on potential tax increases.
- Republicans slashed corporate taxes as part of their 2017 law, and President Biden has proposed reversing part of the cut.
Sen. Bernie Sanders is once again asking corporations to raise their employees' wages.
The Vermont independent and a group of congressional Democrats put forward a bill Wednesday to hike taxes on companies that pay their chief executive at least 50 times more than the median pay for their workers. Businesses would owe more taxes the higher their CEO-to-worker pay ratio is.
Sanders introduced the plan in the Senate along with Sens. Elizabeth Warren and Ed Markey, D-Mass., and Sen. Chris Van Hollen, D-Md. Reps. Barbara Lee, D-Calif., and Rashida Tlaib, D-Mich., proposed it in the House. The bill has at least 18 other co-sponsors in the House.
The legislation fits into a push from progressives to boost pay for low-wage workers and root out income and wealth inequality. Democrats failed to raise the federal minimum wage to $15 per hour in their $1.9 trillion coronavirus relief bill, and Sanders has sought alternatives to compel major corporations to hike pay.
The bill faces a challenging path in Congress. Even if Democratic leaders endorse it, Republicans appear loathe to vote for possible tax increases.
In a statement Wednesday, Sanders said the plan aims to cut into the divide between the wealthiest Americans and the working class.
"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," he said. "That is what this legislation will begin to do."
The bill would raise the corporate tax rate by 0.5 percentage points for companies that pay CEOs at least 50 times but less than 100 times more than the median pay for workers. The tax hike would climb along with the CEO-to-worker pay ratio, until businesses that pay chief executives 500 times more than the median would see a 5 percentage point increase.
The bill would apply to public and private companies. Private businesses with gross receipts of at least $100 million per year would have to disclose their pay ratios along with public companies. In cases where a CEO makes little money because of stock ownership or other compensation, the bill would base the tax penalty on the highest-paid employee.
The proposal's authors estimate it could raise $150 billion over a decade.
It is unclear exactly how many companies would pay more in taxes under the plan. The ratio of CEO-to-worker compensation was 320-to-1 at the top 350 American firms in 2019, according to the left-leaning Economic Policy Institute.
The plan's authors estimated how it would have affected several major companies last year. Walmart would have owed about $855 million more, Home Depot would have paid nearly $551 million more and JPMorgan Chase would have shelled out roughly $173 million more. Other tax bills would have included about $148 million for Nike, $70 million for McDonald's and $23 million for American Airlines.
Spokespeople for four of those companies did not immediately comment. Walmart and JPMorgan declined to comment.
Republicans slashed the corporate tax rate to 21% from 35% as part of their 2017 tax law. President Joe Biden aims to hike the rate to 28% as part of his plans to pay for a massive infrastructure and economic recovery package.