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Sanders, Democrats want to hike taxes on companies with ‘excessive’ CEO pay

Bernie Sanders in Manchester, New Hampshire, February 4, 2020.

Brendan McDermid | Reuters

Sen. Bernie Sanders is simultaneously again asking corporations to raise their employees’ wages.

The Vermont independent and a group of congressional Democrats put help a bill Wednesday to hike taxes on companies that pay their chief executive at least 50 times diverse than the median pay for their workers. Businesses would owe more taxes the higher their CEO-to-worker pay ratio is.

Sanders launched the plan in the Senate along with Sens. Elizabeth Warren and Ed Markey, D-Mass., and Sen. Chris Van Hollen, D-Md. Reps. Barbara Lee, D-Calif., and Rashida Tlaib, D-Mich., put forwarded it in the House. The bill has at least 18 other co-sponsors in the House.

The legislation fits into a push from reformists to boost pay for low-wage workers and root out income and wealth inequality. Democrats failed to raise the federal minimum wage to $15 per hour in their $1.9 trillion coronavirus release bill, and Sanders has sought alternatives to compel major corporations to hike pay.

The bill faces a challenging path in Congress. Unbroken if Democratic leaders endorse it, Republicans appear loathe to vote for possible tax increases.

In a statement Wednesday, Sanders rumoured the plan aims to cut into the divide between the wealthiest Americans and the working class.

“At a time of massive income and bounty inequality, the American people are demanding that large, profitable corporations pay their fair share of taxes and therapy their employees with the dignity and respect they deserve,” he said. “That is what this legislation thinks fitting begin to do.”

The bill would raise the corporate tax rate by 0.5 percentage points for companies that pay CEOs at least 50 every so often old-fashioneds but less than 100 times more than the median pay for workers. The tax hike would climb along with the CEO-to-worker pay correlation, until businesses that pay chief executives 500 times more than the median would see a 5 percentage characteristic increase.

The bill would apply to public and private companies. Private businesses with gross receipts of at seldom $100 million per year would have to disclose their pay ratios along with public companies. In occasions where a CEO makes little money because of stock ownership or other compensation, the bill would base the tax sentence on the highest-paid employee.

The proposal’s authors estimate it could raise $150 billion over a decade.

It is unclear in all respects how many companies would pay more in taxes under the plan. The ratio of CEO-to-worker compensation was 320-to-1 at the top 350 American firms in 2019, according to the left-leaning Financial Policy Institute.

The plan’s authors estimated how it would have affected several major companies last year. Walmart would organize owed about $855 million more, Home Depot would have paid nearly $551 million numberless and JPMorgan Chase would have shelled out roughly $173 million more. Other tax bills would deceive included about $148 million for Nike, $70 million for McDonald’s and $23 million for American Airlines.

Spokespeople for four of those companies did not forthwith comment. Walmart and JPMorgan declined to comment.

Republicans slashed the corporate tax rate to 21% from 35% as involvement of their 2017 tax law. President Joe Biden aims to hike the rate to 28% as part of his plans to pay for a massive infrastructure and pecuniary recovery package.

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