Via Bernie Sanders
In the 1950s, CEOs made 20 times more than their median employees. Last year, the average S&P 500 CEO made 287 times their median worker pay. Workers in this country should not be paid totally inadequate wages while CEOs make outrageously high compensation packages.
Bernie’s Income Inequality Tax Plan raises taxes on companies with exorbitant pay gaps between their executives and typical workers.
Today, the SEC requires companies to disclose their CEO-to-median-worker pay ratios. As a result, we now know that:
- Walmart’s CEO made $23.6 million last year, 1,076 times more than the median Walmart worker’s $21,952.
- Jamie Dimon made over $30 million last year, 381 times more than the median JPMorganChase employee’s $78,923.
- Home Depot’s CEO made more than $11.4 million, 486 times more than the median Home Depot employee’s $23,389.
- Nike’s CEO was paid over $9.5 million in 2018, 379 times more than the median Nike employee’s earnings of $24,955.
- American Airlines’ CEO made almost $12 million last year, 195 times more than the median American Airlines employee’s $61,527.
Under the new Sanders plan, companies with large gaps between their CEO and median worker pay would see progressively higher corporate tax rates with the most unequal companies paying five percentage points more in corporate taxes.
Specifically, this plan would impose tax rate increases on companies with CEO to median worker ratios above 50 to 1. If the CEO did not receive the largest paycheck in the firm, the ratio will be based on the highest-paid employee. The tax penalties would begin at 0.5 percentage points for companies that pay their top executives between 50 and 100 times more than their typical workers. The highest penalty would kick in for companies that pay top executives over 500 times worker pay. These rates, if current corporate pay patterns continue, would raise around $150 billion over 10 years.
How companies’ corporate taxes would increase if their compensation ratio is:
- Between 50 and 100: +0.5%
- Between 100 and 200: +1%
- Between 200 and 300: +2%
- Between 300 and 400: +3%
- Between 400 and 500: +4%
- More than 500: +5%
If this plan had been in effect last year:
- McDonald’s would have paid up to $110.9 million more in taxes.
- Walmart would have paid up to $793.8 million more in taxes.
- JPMorganChase would have paid up to $991.6 million more in taxes.
- The Home Depot would have paid up to $538.2 million more in taxes.
- American Airlines would have paid up to $18.8 million more in taxes.
This plan would apply to all private and publicly held corporations with annual revenue of more than $100 million. The Treasury Department will be required to issue regulations to prevent tax avoidance, including by changing the composition of a firm’s workforce. In addition, the pay ratio data for privately held corporations will be made public in the same manner that it is currently disclosed for publicly held corporations.
The revenue generated from this income inequality tax will be used to pay for Bernie’s plan to eliminate medical debt. But the goal of this income inequality tax is not just to raise more revenue. It is to send a message to corporate America: stop paying your workers inadequate wages while CEOs make outrageous compensation packages.
The American people want corporations to invest in their workers, not just dividends, stock buybacks and outrageous compensation packages to their executives. That’s what this plan is all about.
Unclear how effective this plan would be in practice (I tend to think it would be a net positive), but it’s certainly not a pieceof bureaucracy that adds to costs via compliance monitoring etc. In reality, this plan would boost corporate profits if executive comp comes down, or be good for the economy if worker compensation came up.
Whether you agree with him or he scares you to death, gotta love Bernie for his bold ideas and sheer motivation to solve the multiple HUGE crises we face.
Is there really any question that workers need a bigger slice of the economic pie? I’d approve of any corporate tax policies that rewarded investments in workers and job growth.
It’s funny too, I saw a Twitter reply that said: “Good thing this loon will never be president”.
And I’m thinking: “What do you think the chances of that particular tweeter being a CEO are?”
Obviously zero. Americans have been so indoctrinated that they vote/speak/act against their own self-interest in a mindless allegiance to a version of capitalism that looks a lot more like kleptocracy/serfdom than it does “healthy, market-based economy”
Just look at the baby boomers working themselves into disability with no pathway for the career longevity required to fully fund even a sparse retirement. How could you muster the painful day in and day out grind without some type of delusion.
It is similar stockholm syndrome. They are captives to the system, and they support their captors. The future may be bleak with millions of people unable to work anymore limping along with a paucity of income and still voting against the interests of workers.
The biggest core problem is the ceo’s of walmart and home depo like companies that exploit low end people in poverty. Lots of states are looking at raising min wages — but then the ceo’s just increase prices for goods to offset the loss in their pockets, as such, that loss to ceo’s exploiting workers should become a penalty attached to ceo compensation. The plantation mentality of paying workers less and less while ceo’s make more and more is a destructive economic function that impacts gdp and future value — consolidating profits into the hands of a few does not stimulate growth!
Bernie has been winning the war of ideas for some time now. It it prevails, one wonders how the people in power recently will avoid going down in history as the toadies of the Coolidges and Hoovers of this century.
Since CEO’s get huge bundles of stock during their tenure could companies get around Bernies CEO tax via stock price manipulation?