Democrats propose CEO pay tax targeting businesses with salaries over 50 times the average worker's pay.
Tax plan aims to address income inequality, generate $150 billion in revenue over a decade.
Legislative challenges include Senate approval (60 votes needed) and potential hurdles in the Republican-controlled House
Democrats are proposing to increase taxes on businesses whose CEO salaries are at least 50 times higher than those of the average worker. They claim that this legislation is necessary to curb corporate greed.
The union-backed plan would also need Treasury Department rules to stop businesses from dodging the tax by using contractors rather than workers, the senators said in a statement on Monday. The idea may have an impact on some of the biggest corporations and employers in the country.
(Photo : by Kevin Dietsch/Getty Images)Democrats are proposing to increase taxes on businesses whose CEO salaries are at least 50 times higher than those of the average worker. They claim that this legislation is necessary to curb corporate greed.
They said that companies could avoid the tax increase by increasing worker pay and lowering CEO salaries. The bill could bring in $150 billion in revenue to the United States over a ten-year period.
According to the organization, Walmart, Google, Home Depot, JPMorgan Chase, Nike, and McDonald's may all have to pay millions or maybe billions more in taxes.
"Americans across the political spectrum are outraged by the extreme gaps between CEO and worker pay," the organization stated. Sanders is an independent who often supports Democrats in caucuses.
In order to pass the Senate, which Democrats barely control 51-49, the plan would require 60 votes. The Republican-controlled House of Representatives, which must also approve the bill before sending it to Democratic U.S. President Joe Biden for signature into law, is another possible obstacle that needs to be overcome.
The approaching November U.S. elections may also make any attempt to enact such a package more difficult, given the significant impact the economy would have on Biden's reelection campaign.
American delegates, Chamber of Commerce, the largest U.S. business lobby, did not immediately react to a request for comment on the Tax Excessive CEO Pay Act, which was presented last week.
According to the proposed law, the bill would boost the tax rate on businesses whose CEO-to-worker wage ratio was above 50 to 1. The rise would begin with a 0.5 percentage-point increase when the top executive makes 50 to 100 times more than the typical worker in the company.
A maximum tax penalty of five percentage points would be imposed on companies that pay their top executives more than 500 times the average salary of an employee.
The senators stated that the ratio would be based on the highest-paid employee if the CEO did not get the biggest salary in the company. They also said that statistics on CEO-to-worker remuneration will be released for privately owned corporations.
