A sign from an Occupy Wall Street protest against income inequality in 2011. (Photo: a.mina/flickr/cc)
Dec 08, 2016
The city of Portland, Oregon on Wednesday took a bold step towards addressing the national scourge of extreme pay inequality with the passage of a landmark tax penalty to be imposed on companies whose CEO makes more than 100 times the average worker's salary.
"This is as close as I've ever [come] to a tax on inequality itself," said outgoing commissioner Steve Novick, who proposed the tax, which was approved by the City Council 3-1.
The tax will target publicly-traded companies using "compensation data the federal Securities and Exchange Commission will report," beginning January 2018, according to Oregon Live. Officials expect that as much as $3.5 million could be raised each year, which will go towards the city's homeless services.
According to the Institute for Policy Studies (IPS), "the city has identified more than 500 corporations that do enough business in Portland to be affected by the surtax, including many that regularly dominate the highest-paid CEO lists, such as Oracle, Honeywell, Goldman Sachs, Wells Fargo, and General Electric."
And Novick and other proponents are hopeful that it will inspire other cities to take local steps to tackle the nation's gross inequality epidemic. A report published by the national AFL-CIO union in May found that the average CEO of an S&P 500 company made 335 times more money than the average rank-and-file worker.
Under the plan, "a company with a CEO-to-worker ratio of at least 100-to-1 will pay a surcharge equal to 10 percent of the amount it pays for Portland's business tax," Oregon Live explains. "A company with a 250-to-1 ratio or greater would pay a 25 percent surcharge."
"This path-breaking policy tackles a key driver of our growing inequality," said IPS veteran executive compensation analyst Sarah Anderson. "I predict this will spark a wave of similar actions, much like the local living wage campaigns that have spread like wildfire across the country," she added, referring to the national Fight for $15 minimum wage movement.
"Indeed," Anderson wrote in Nation op-ed on Thursday, "we may look back at the Oregon vote as the dawn of a new 'pay ratio politics.'"
She continued:
Cities and states across the country may soon be scrambling for every extra dime they can find. President-elect Donald Trump's current tax plan would lavish $6.2 trillion in tax breaks on the rich and the corporations they run over the next 10 years, a giveaway that would almost certainly lead to draconian cuts to social safety-net programs and services.
If officials outside the D.C. Beltway want to help lessen that pain, they'll need to find innovative new revenue sources. A tax penalty on extreme pay ratios could top that list.
As Portland Mayor Charlie Hales said after the vote, "It falls to cities to do creative, progressive policymaking, and this is exactly what this is."
"Income inequality is real, it is a national problem and the federal government isn't doing anything about it," Hales told the New York Times in a phone interview. "We have a habit of trying things in Portland; maybe they're not perfect at the first iteration. But local action replicated around the country can start to make a difference."
Join Us: News for people demanding a better world
Common Dreams is powered by optimists who believe in the power of informed and engaged citizens to ignite and enact change to make the world a better place. We're hundreds of thousands strong, but every single supporter makes the difference. Your contribution supports this bold media model—free, independent, and dedicated to reporting the facts every day. Stand with us in the fight for economic equality, social justice, human rights, and a more sustainable future. As a people-powered nonprofit news outlet, we cover the issues the corporate media never will. |
Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.
Lauren McCauley
Lauren McCauley is a former senior editor for Common Dreams covering national and international politics and progressive news. She is now the Editor of Maine Morning Star. Lauren also helped produce a number of documentary films, including the award-winning Soundtrack for a Revolution and The Hollywood Complex, as well as one currently in production about civil rights icon James Meredith. Her writing has been featured on Newsweek, BillMoyers.com, TruthDig, Truthout, In These Times, and Extra! the newsletter of Fairness and Accuracy in Reporting. She currently lives in Kennebunk, Maine with her husband, two children, a dog, and several chickens.
The city of Portland, Oregon on Wednesday took a bold step towards addressing the national scourge of extreme pay inequality with the passage of a landmark tax penalty to be imposed on companies whose CEO makes more than 100 times the average worker's salary.
"This is as close as I've ever [come] to a tax on inequality itself," said outgoing commissioner Steve Novick, who proposed the tax, which was approved by the City Council 3-1.
The tax will target publicly-traded companies using "compensation data the federal Securities and Exchange Commission will report," beginning January 2018, according to Oregon Live. Officials expect that as much as $3.5 million could be raised each year, which will go towards the city's homeless services.
According to the Institute for Policy Studies (IPS), "the city has identified more than 500 corporations that do enough business in Portland to be affected by the surtax, including many that regularly dominate the highest-paid CEO lists, such as Oracle, Honeywell, Goldman Sachs, Wells Fargo, and General Electric."
And Novick and other proponents are hopeful that it will inspire other cities to take local steps to tackle the nation's gross inequality epidemic. A report published by the national AFL-CIO union in May found that the average CEO of an S&P 500 company made 335 times more money than the average rank-and-file worker.
Under the plan, "a company with a CEO-to-worker ratio of at least 100-to-1 will pay a surcharge equal to 10 percent of the amount it pays for Portland's business tax," Oregon Live explains. "A company with a 250-to-1 ratio or greater would pay a 25 percent surcharge."
"This path-breaking policy tackles a key driver of our growing inequality," said IPS veteran executive compensation analyst Sarah Anderson. "I predict this will spark a wave of similar actions, much like the local living wage campaigns that have spread like wildfire across the country," she added, referring to the national Fight for $15 minimum wage movement.
"Indeed," Anderson wrote in Nation op-ed on Thursday, "we may look back at the Oregon vote as the dawn of a new 'pay ratio politics.'"
She continued:
Cities and states across the country may soon be scrambling for every extra dime they can find. President-elect Donald Trump's current tax plan would lavish $6.2 trillion in tax breaks on the rich and the corporations they run over the next 10 years, a giveaway that would almost certainly lead to draconian cuts to social safety-net programs and services.
If officials outside the D.C. Beltway want to help lessen that pain, they'll need to find innovative new revenue sources. A tax penalty on extreme pay ratios could top that list.
As Portland Mayor Charlie Hales said after the vote, "It falls to cities to do creative, progressive policymaking, and this is exactly what this is."
"Income inequality is real, it is a national problem and the federal government isn't doing anything about it," Hales told the New York Times in a phone interview. "We have a habit of trying things in Portland; maybe they're not perfect at the first iteration. But local action replicated around the country can start to make a difference."
Lauren McCauley
Lauren McCauley is a former senior editor for Common Dreams covering national and international politics and progressive news. She is now the Editor of Maine Morning Star. Lauren also helped produce a number of documentary films, including the award-winning Soundtrack for a Revolution and The Hollywood Complex, as well as one currently in production about civil rights icon James Meredith. Her writing has been featured on Newsweek, BillMoyers.com, TruthDig, Truthout, In These Times, and Extra! the newsletter of Fairness and Accuracy in Reporting. She currently lives in Kennebunk, Maine with her husband, two children, a dog, and several chickens.
The city of Portland, Oregon on Wednesday took a bold step towards addressing the national scourge of extreme pay inequality with the passage of a landmark tax penalty to be imposed on companies whose CEO makes more than 100 times the average worker's salary.
"This is as close as I've ever [come] to a tax on inequality itself," said outgoing commissioner Steve Novick, who proposed the tax, which was approved by the City Council 3-1.
The tax will target publicly-traded companies using "compensation data the federal Securities and Exchange Commission will report," beginning January 2018, according to Oregon Live. Officials expect that as much as $3.5 million could be raised each year, which will go towards the city's homeless services.
According to the Institute for Policy Studies (IPS), "the city has identified more than 500 corporations that do enough business in Portland to be affected by the surtax, including many that regularly dominate the highest-paid CEO lists, such as Oracle, Honeywell, Goldman Sachs, Wells Fargo, and General Electric."
And Novick and other proponents are hopeful that it will inspire other cities to take local steps to tackle the nation's gross inequality epidemic. A report published by the national AFL-CIO union in May found that the average CEO of an S&P 500 company made 335 times more money than the average rank-and-file worker.
Under the plan, "a company with a CEO-to-worker ratio of at least 100-to-1 will pay a surcharge equal to 10 percent of the amount it pays for Portland's business tax," Oregon Live explains. "A company with a 250-to-1 ratio or greater would pay a 25 percent surcharge."
"This path-breaking policy tackles a key driver of our growing inequality," said IPS veteran executive compensation analyst Sarah Anderson. "I predict this will spark a wave of similar actions, much like the local living wage campaigns that have spread like wildfire across the country," she added, referring to the national Fight for $15 minimum wage movement.
"Indeed," Anderson wrote in Nation op-ed on Thursday, "we may look back at the Oregon vote as the dawn of a new 'pay ratio politics.'"
She continued:
Cities and states across the country may soon be scrambling for every extra dime they can find. President-elect Donald Trump's current tax plan would lavish $6.2 trillion in tax breaks on the rich and the corporations they run over the next 10 years, a giveaway that would almost certainly lead to draconian cuts to social safety-net programs and services.
If officials outside the D.C. Beltway want to help lessen that pain, they'll need to find innovative new revenue sources. A tax penalty on extreme pay ratios could top that list.
As Portland Mayor Charlie Hales said after the vote, "It falls to cities to do creative, progressive policymaking, and this is exactly what this is."
"Income inequality is real, it is a national problem and the federal government isn't doing anything about it," Hales told the New York Times in a phone interview. "We have a habit of trying things in Portland; maybe they're not perfect at the first iteration. But local action replicated around the country can start to make a difference."
We've had enough. The 1% own and operate the corporate media. They are doing everything they can to defend the status quo, squash dissent and protect the wealthy and the powerful. The Common Dreams media model is different. We cover the news that matters to the 99%. Our mission? To inform. To inspire. To ignite change for the common good. How? Nonprofit. Independent. Reader-supported. Free to read. Free to republish. Free to share. With no advertising. No paywalls. No selling of your data. Thousands of small donations fund our newsroom and allow us to continue publishing. Can you chip in? We can't do it without you. Thank you.