U.S. Rep. Mark DeSaulnier (D-CA) introduced a bill that would increase corporate taxes on companies that have extreme disparities between CEO and worker pay.
DeSaulnier pointed out that in the 1970s, the average CEO earned roughly 20 to 30 times the compensation of a typical worker. However, that disparity has exploded with estimates placing the ratio at over 300:1 for top S&P 500 companies.
The CEO Accountability and Responsibility Act, H.R. 5019, would hike corporate taxes on companies that have extreme disparities between CEO and worker pay. He cited Starbucks and Abercrombie & Fitch, where he said the CEOs make over 6,000 times what the company’s median worker makes. If the CEO Accountability and Responsibility Act were to become law, those companies would be forced to pay millions in additional taxes.
The bill would also offer preferential treatment in federal contracts to companies with pay ratios below 50:1.
“As working Americans struggle with higher costs of living and diminished power in the workplace, ultrawealthy CEOs and large corporations are profiting hand over fist at their employees’ expense and rewarding themselves with exorbitant salaries and bonuses,” DeSaulnier said. “While Republicans bend over backwards to help their CEO friends get richer and support tariffs that make everything more expensive, I’m countering their misguided efforts to put the power back where it really belongs—with workers—to put an end to excessive corporate greed that is eroding the middle class and threatening our democracy.”
DeSaulnier said a similar policy has since been adopted in Portland, Oregon, where it generated $3.5 million in the first year. Further, a tax on CEOs that are paid at more than 100:1 ratio was passed into law in San Francisco in 2020.
This bill is supported by several organizations including the AFL-CIO, American Sustainable Business Network, Americans for Financial Reform, Center for Popular Democracy, Consumer Action, International Brotherhood of Teamsters, International Federation of Professional & Technical Engineers, Institute for Policy Studies, Global Economy Project, National Federation of Federal Employees, NETWORK Lobby for Catholic Social Justice, Patriotic Millionaires, Public Citizen, Social Security Works, and United for a Fair Economy.