A new congressional bill would deliver heftier IRS bills to corporations that overpay their top executives at the expense of their workers.
Institute for Policy Studies experts have advocated for such policies since the 1990s, the decade CEO pay at big U.S. corporations began soaring into the stratosphere.
A recent IPS report finds that 80 percent of S&P 500 firms last year paid their CEO over 100 times their median employee pay. At 50 publicly held firms, workers would have to toil at least 1,000 years to make as much as their boss made in just one.
The new legislation, introduced November 13 by Senator Bernie Sanders and Representatives Rashida Tlaib and Barbara Lee, would impose graduated tax increases on corporations based on the size of the gaps between their CEO and median worker pay.
Under the Tax Excessive CEO Pay Act, the tax hikes start at 0.5 percentage points on companies with gaps of 50 to 1 and top out at five percentage points on firms that pay their CEO more than 500 times median worker pay.
“If companies can afford to pay their CEOs tens of millions of dollars, they can afford to raise wages for their employees,” said Rep. Lee in a joint statement with Tlaib and Sanders.
Tlaib, who represents Detroit, pointed out that the CEO of GM made nearly 300 times median income at the company last year. This fall, pay disparities provoked a strike among GM workers that was the longest in the auto industry over the past 50 years. This new bill “will help ensure there is more fairness in the workplace when it comes to wages,” Tlaib said. “It’s common sense legislation on the path toward justice for all.”
Original co-sponsors of the bill include Senator Elizabeth Warren (D-Mass.) and 16 House Democrats
Twenty-nine leading labor, anti-poverty, and other economic justice organizations issued a statement in support of the bill.