This bill would add a new tax rule to the Internal Revenue Code. If a corporation's ratio of the compensation of its chief executive officer (or its highest paid employee) to its median worker pay is greater than 50 to 1, the company's 21% corporate tax rate would be raised by a small percentage amount. The increase grows as the pay ratio rises (0.5 percentage points for 50–100 to 1, up to 5 percentage points for ratios greater than 500 to 1). The pay ratio is to be calculated using the method in SEC regulation 229.402(u)(1)(iii), but using a 5-year average of the compensation amounts and using the highest-paid employee if that person is not the CEO. Corporations that are not SEC filers but have average annual gross receipts of at least $100 million for the prior three years must calculate and report a pay ratio under Treasury rules. Private corporations with average annual gross receipts under $100 million are exempt. The rule would apply to taxable years beginning after December 31, 2025. The Secretary of the Treasury must issue regulations to prevent avoidance, including rules about changes in workforce composition and use of contractors. The bill was introduced in the House on September 11, 2025, by Representative Rashida Tlaib with many cosponsors and was referred to the House Ways and Means Committee.
No publicly available information on estimated federal revenue gains, budget scores, or projected compliance costs is included in the bill text or metadata provided.
The bill text and title show it is intended to impose higher corporate tax rates on companies with large CEO-to-median-worker pay gaps. Sponsors introduced the bill to target corporations with what the title calls "excessive CEO pay," using scaled tax increases tied to the size of the pay ratio. The bill also directs Treasury to write rules to prevent avoidance.
No publicly available information on specific opponents, formal objections, or floor debate positions is included in the provided text or metadata.