Jake Johnson: Progressive Lawmakers Unveil Bill to Attack ‘Disease’ of Corporate Greed

Published originally at Common Dreams on January 22, 2024 under Creative Commons CC BY-NC-ND 3.0 license

Sen. Bernie Sanders, Rep. Barbara Lee, and other progressives in the U.S. Congress have introduced legislation to raise taxes on corporations that pay their top executives over 50 times more than their median workers—a change that would require Walmart, Google, and other major companies to pay hundreds of millions of dollars more in taxes each year.

The Tax Excessive CEO Pay Act would incrementally hike a company’s tax rate based on the size of its CEO-to-median-worker pay ratio.

For companies that pay their chief executives more than 50 times as much as their median workers but less than 100 times more, the corporate tax rate would go up by 0.5 percentage points. If a company’s ratio is more than 500 to 1, its tax rate would go up by 5 percentage points.

According to the AFL-CIO’s executive pay tracker, more than 40 U.S. companies have CEO-worker pay ratios over 1,000 to 1, including Apple (1,177 to 1) and McDonald’s (1,224 to 1).

The AFL-CIO is one of more than 20 organizations backing the Tax Excessive CEO Pay Act.

Sanders’ office estimated that a typical McDonald’s worker would have to work for more than 1,200 years to make nearly $17.8 million, which is what CEO Chris Kempczinski was paid in total compensation in 2022. If the Tax Excessive CEO Pay Act had been in place that year, McDonald’s would have paid up to $92 million more in taxes.

The new bill is an updated version of legislation that Sanders first introduced in 2021.

“The American people understand that today we are moving toward an oligarchic form of society where the very rich are doing phenomenally well, while working families continue to struggle to put a roof over their heads, feed their families, and pay for the basic necessities of life,” Sanders (I-Vt.) said in a statement.

“The American people are sick and tired of CEOs making nearly 350 times more than their average employees while over 60% of Americans live paycheck to paycheck,” Sanders added. “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. That is what this legislation will begin to do.”

The latest available executive pay data, as analyzed by the Economic Policy Institute (EPI), shows that top U.S. CEOs on average were paid 344 times more than their typical employees in 2022. Between 1978 and 2022, EPI found, top executive pay skyrocketed by 1,209.2% while worker pay grew by just 15.3%.

Supporters of the Tax Excessive CEO Pay Act argue that it would, if passed, put pressure on companies to raise worker pay. The legislation would also bring in an estimated $150 billion in federal revenue over the next decade, according to a summary.

“New reports from Oxfam International indicate that if current trends persist, poverty will not be eradicated for another 229 years,” said Lee (D-Calif.), who is running for the U.S. Senate. “With the shareholder class raking in greater profits than ever in history, I refuse to accept this future.”

“As elected officials, we have a moral obligation to address this corrosive inequality at the source,” Lee continued. “I urge my colleagues to support workers who are fighting for a fair share of the fruits of their labor by endorsing the Tax Excessive CEO Pay Act.”

The bill was introduced last week with several backers in the Senate—Sens. Elizabeth Warren (D-Mass.), Ed Markey (D-Mass.), Chris Van Hollen (D-Md.), and Sanders—and 13 co-sponsors in the House, including Reps. Cori Bush (D-Mo.) and Rashida Tlaib (D-Mich.).

“Corporate greed is a disease that has long afflicted our country,” Tlaib said in a statement. “It’s disgraceful that corporations continue to rake in record profits by exploiting the labor of their workers. Working families deserve to live with human dignity. I’m proud to join my colleagues in reintroducing the Tax Excessive CEO Pay Act to address the massive income and wealth inequality in our nation. It’s time for the rich to pay their fair share.”