• Discounts and special offers
  • Subscriber-only articles and interviews
  • Breaking news and trending topics

Already a subscriber?

By signing up, you accept Moneywise's Terms of Use, Subscription Agreement, and Privacy Policy.

Not interested ?

The Tax Excessive CEO Pay Act

The bill, which Sanders introduced in the Senate on Jan. 18, would hit corporate giants with a tax rate increase of 0.5% to 5%, depending on the severity of their pay disparity.

Companies that pay their top executives between 50 and 100 times more than what a typical worker makes would face a 0.5% tax increase, while those whose CEO pay ratio is more than 500 to 1 would face the maximum penalty of 5%.

According to the press release, a CEO at the largest 350 U.S. publicly-owned firms makes close to 344 times the average pay of a typical worker, and if current pay patterns continue, the rates would generate $150 billion in revenue for the government over 10 years.

The proposed law would include measures to stop companies from dodging the tax penalties by using contractors rather than employees, and it would require private companies to make their CEO-to-worker pay data public.

Don't miss

Does this bill stand a chance?

This is a tough time to take on corporate America.

With U.S. elections fast approaching, lawmakers are treading carefully on how they tackle the nation’s deep economic challenges. The presidential candidates, in particular, will be wary of provoking big businesses, who have a lot of political influence.

To clear the Senate — which Democrats narrowly control at 51-49 — Sanders’ bill would need 60 votes. It would then have to get through the Republican-controlled House of Representatives, where its chances of success are slim.

What to read next

Bethan Moorcraft is a reporter for Moneywise with experience in news editing and business reporting across international markets.


The content provided on Moneywise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.