To amend the Internal Revenue Code of 1986 to adjust the rate of income tax of a publicly traded corporation based on the ratio of compensation of the corporations highest paid employee to the median compensation of all the corporations employees, and for other purposes.
Analysis under review: This bill has generated analysis that may be too generic or incomplete. Clause-level evidence remains available below.
Summary
This bill aims to discourage extreme executive pay at large publicly traded companies by raising their corporate tax rate based on how much more the CEO earns compared to the typical worker. Companies where the CEO makes more than 100 times the median employee pay would face a tax surcharge of 0.5 to 3 percentage points, depending on the ratio. Companies that also cut domestic jobs while increasing foreign or contract workers would face an additional 50% penalty on top of the surcharge. Separately, the bill gives a preference in federal government contracts to companies where the pay ratio is less than 50-to-1. The tax provisions would apply to future tax years after enactment.
Evidence Chain:
This summary is generated from the full bill text using AI analysis. Expand "Detailed Analysis" below for identified beneficiaries/burden bearers with clause-level evidence links.
At a Glance
What This Bill Does
Imposes a graduated corporate tax surcharge on publicly traded companies based on their CEO-to-median-worker pay ratio, and gives federal contracting preference to companies with pay ratios below 50-to-1.
Key Policy Areas
Tax Policy, Labor, Government Contracting
Primary Purpose
Imposes a graduated corporate tax surcharge on publicly traded companies based on their CEO-to-median-worker pay ratio, and gives federal contracting preference to companies with pay ratios below 50-to-1.
Policy Domains
Section 2 - Corporate Tax Rate Adjustment Based on Pay Ratio
Identified Gains
- Workers at publicly traded companies
- Federal tax revenue
Identified Costs
- Publicly traded corporations with high CEO pay
- CEOs and highly compensated executives
Section 3 - Federal Contracting Preference for Low Pay Ratios
Identified Gains
- Companies with pay ratios below 50-to-1
- Workers at government contractors
Identified Costs
- Large government contractors with high pay ratios
Legislative Progress
IntroducedMr. DeSaulnier introduced the following bill; which was referred to …
Impact analysis is available but no clear stakeholder effects identified. View clause-level analysis →
Bill Structure & Actor Mappings
Who is "The Secretary" in each section?
- "the_secretary"
- → Secretary of the Treasury
- "head_of_executive_agency"
- → Head of an executive agency (contracting officer)
Key Definitions
Terms defined in this bill
Total compensation as reported in SEC Summary Compensation Table per Item 402 of Regulation S-K.
Wages as defined in IRC section 3121(a) paid during the calendar year.
Ratio of the greater of CEO or highest-paid employee compensation to median compensation of all U.S. employees of the company.
We use a combination of our own taxonomy and classification in addition to large language models to assess meaning and potential beneficiaries. High confidence means strong textual evidence. Always verify with the original bill text.
Learn more about our methodology