Bernie Sanders, Democrats search to hike taxes on corporations with excessive CEO pay
Bernie Sanders in Manchester, New Hampshire, February 4, 2020.
Brendan McDermid | Reuters
Senator Bernie Sanders once again urges companies to raise their employees’ wages.
The independent Vermonter and a group of Congressional Democrats tabled a bill on Wednesday to increase taxes on companies that pay their CEOs at least 50 times the median wages for their workers. Companies would owe more taxes the higher the wage ratio between CEO and employee.
Sanders presented the plan in the Senate along with Sens. Elizabeth Warren and Ed Markey, D-Mass., And Senator Chris Van Hollen, D-Md. In front. Reps Barbara Lee, D-Calif., And Rashida Tlaib, D-Mich., Suggested it at the House. The bill has at least 18 other co-sponsors in house.
The legislation fits in with a push by progressives to raise wages for low-wage workers and eradicate income and wealth inequalities. Democrats failed to raise the federal minimum wage to $ 15 an hour in their $ 1.9 trillion coronavirus bailout, and Sanders has been looking for alternatives to force big corporations to raise their salaries.
The bill is facing a challenging path in Congress. Even if Democratic leaders are in favor, Republicans seem unwilling to vote for possible tax hikes.
In a statement on Wednesday, Sanders said the plan aims to narrow the gap between the richest Americans and the working class.
“At a time of massive income and wealth inequality, Americans are demanding that large, profitable corporations pay their fair share of taxes and treat their employees with the dignity and respect they deserve,” he said. “That is exactly what this legislation will do.”
The bill would raise the corporate tax rate by 0.5 percentage points for companies that pay CEOs at least 50 times but less than 100 times the median wage for employees. The tax hike would rise along with the CEO-to-employee ratio until companies paying directors 500 times the median saw a 5 percentage point increase.
The bill would apply to public and private companies. Private companies with gross revenues of at least USD 100 million per year would have to disclose their wage quotas together with public companies. In cases where a CEO makes little money from stock ownership or other compensation, the bill would base the tax penalty on the highest paid employee.
The proposal’s authors estimate that $ 150 billion could be raised in a decade.
It is unclear how many companies would pay more taxes under the plan. According to the left-wing Economic Policy Institute, the CEO-to-employee compensation ratio of the 350 largest American companies was 320 to 1 in 2019.
The plan’s authors estimated how this would have affected several large companies last year. Walmart would have owed about $ 855 million more, Home Depot would have paid nearly $ 551 million more, and JPMorgan Chase would have spent about $ 173 million more. Other tax charges would have included about $ 148 million for Nike, $ 70 million for McDonald’s, and $ 23 million for American Airlines.
The spokespersons for four of these companies did not respond immediately. Walmart and JPMorgan declined to comment.
Republicans cut the corporate tax rate from 35% to 21% under their 2017 tax bill. President Joe Biden plans to increase the rate to 28% as part of his plans to pay for a massive infrastructure and economic recovery package.
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