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For Immediate Release
November, 12 2019, 11:00pm EDT
Contact:
Sanders contact: Keane_Bhatt@sanders.senate.gov
Lee contact:Â Nissa.Koerner@mail.house.gov
Tlaib contact:Â Denzel.McCampbell@mail.house.gov
Sanders, Lee, and Tlaib Partner to Combat Outrageous CEO Pay
Sen. Bernie Sanders (I-Vt.), Rep. Barbara Lee (D-Calif.) and Rep. Rashida Tlaib (D-Mich.) introduced the Tax Excessive CEO Pay Act, which rewrites the federal tax code to tackle the inequality crisis created by corporate America's unrestrained greed.
WASHINGTON
Sen. Bernie Sanders (I-Vt.), Rep. Barbara Lee (D-Calif.) and Rep. Rashida Tlaib (D-Mich.) introduced the Tax Excessive CEO Pay Act, which rewrites the federal tax code to tackle the inequality crisis created by corporate America's unrestrained greed.
The typical restaurant employee at McDonald's would have to work for more than 2,000 years to earn what the company's CEO Chris Kempczinski received last year. A retail worker at Gap Inc. would have to work for more than 3,000 years to receive the annual compensation of Gap's former CEO Art Peck. Peck's pay was increased by 33 percent in 2018, even after he presided over years of declines in sales and stock prices.
The Tax Excessive CEO Pay Act would pressure corporations to curb these outrageous pay gaps that are the norm today, by imposing graduated taxes for companies that pay their CEO more than 50 times the pay of the median worker. The tax penalties would begin at 0.5 percentage points and rise to 5 percentage points for firms compensating their chief executives at more than 500 times the rate of their workers. A recent report by the Institute for Policy Studies found that 80 percent of S&P 500 firms paid their CEOs more than 100 times the pay of their median worker.
Many of the firms lavishing multi-million-dollar compensation packages on their top executives rely on taxpayer support--through public housing, nutrition assistance, and Medicaid, for example--to assist full-time workers who struggle with poverty wages.
"In America today, ordinary workers at some of the richest corporations are making poverty wages. Meanwhile, we've got a class of corporate CEOs who make hundreds--sometimes thousands--of times more than their employees," said Sanders. "The last time I checked, corporations got by just fine when CEOs made a million bucks a year--one-tenth of what they make now. All around the world today, large, successful businesses manage to be profitable while treating their workers with dignity and not handing out obscene pay packages to their CEOs. If America's corporate boards can't understand the absurdity of paying their CEO friends--in one year--more than their workers will earn in a lifetime, then the Tax Excessive CEO Pay Act will help them figure it out."
"In the last four decades, inequality has ballooned in our nation and more and more wealth is going to those at the top while workers' wages, especially for workers of color, have remained stagnant," said Congresswoman Barbara Lee. "It is unjust and unacceptable that the CEOs of major corporations are making an average of 287 times more than their average worker - with some CEOs making upwards of 1000 times more. The Tax Excessive CEO Pay Act will incentivize companies to reduce the CEO-worker pay gaps and pay their workers the wages they deserve. Because if companies can afford to pay their CEOs tens of millions of dollars, they can afford to raise wages for their employees."
"Corporate greed is a disease that has long inflicted this country--income inequality and the pay gap between CEOs and their employees are just two of its symptoms that are harming everyday people," said Congresswoman Rashida Tlaib. "In 2018, for example, General Motors' CEO made nearly 300 times more than the median income of an employee there. We have had enough. The Tax Excessive CEO Pay Act will help ensure there is more fairness in the workplace when it comes to wages. It's common sense legislation on the path toward justice for all."
In the 1970s, the average middle-class American worker could raise a family and save for retirement with their pay. CEOs of successful U.S. corporations in the 1970s received about $1 million annually--roughly 20 to 30 times the average pay of their company's middle-class workers. At present, a CEO at a Fortune 500 firm receives about $20 million per year--200 to 300 times the average pay of a typical worker, according to research by the AFL-CIO.
Americans across the political spectrum are outraged by the extreme gaps between CEO and worker pay. According to a nationwide survey, the typical American would limit CEO pay to no more than 6 times that of the average worker. About 62% of all Americans--52% of Republicans and 66% of Democrats--favor capping CEO pay relative to worker pay.
The Tax Excessive CEO Pay Act would raise roughly $150 billion over 10 years if current compensation trends continue. The bill also requires the Treasury Department to issue regulations to prevent tax avoidance, including against companies that increase the use of contractors rather than employees. Pay-ratio data for privately held corporations would also be made public, just as publicly held corporations are required to make public under current law.
The Tax Excessive CEO Pay Act is endorsed by the AFL-CIO, Americans for Democratic Action, Campaign for America's Future, Center for Popular Democracy, Communications Workers of America, Coalition on Human Needs, EPI Policy Center, Franciscan Action Network, Institute for Policy Studies/Global Economy Project, International Brotherhood of Teamsters, International Federation of Professional & Technical Engineers, Jobs With Justice, National Council of Churches, National Federation of Federal Employees, National Health Care for the Homeless Council, NETWORK, Other98, Our Revolution, People's Action, People Demanding Action, Public Citizen, Restaurant Opportunities Centers United, Service Employees International Union (SEIU), Social Security Works, Strong Economy for All, Take on Wall Street, and the Working Families Party.
The bill was cosponsored by Representatives Schakowsky (D-Ill.), Grijalva (D-Ariz.), Norton (D-D.C.), Huffman (D-Calif.), Jayapal (D-Wash.), Khanna (D-Calif.), Thompson (D-Miss.), DeLauro (D-Conn.), Haaland (D-N.M.), Espaillat (D-N.Y.), Pressley (D-Mass.), Garcia (D-Ill.), Omar (D-Minn.), Takano (D-Calif.), Watson Coleman (D-N.J.) and McGovern (D-Mass.).
Read the bill summary here.
Read the legislative text here.
Read an FAQ here.
Read a support letter by 28 major economic justice organizations here.
Watch the bill's release video here.
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