The bill would raise the federal corporate tax rate for companies whose CEO’s or highest-paid employee’s pay is more than 50 times the median worker’s pay. It uses a five-year average to calculate the ratio. The added tax would range from 0.5 to 5 percentage points, depending on the ratio. Certain private companies with average annual gross receipts below $100 million would be exempt. The changes would apply to tax years beginning after December 31, 2025.
The bill sets no direct tax or benefit for individual workers. It would require some companies to calculate and report their pay ratios. Treasury would issue rules to prevent companies from avoiding the tax by changing their workforce makeup, including by using contractors instead of employees.
Companies subject to the increase would pay a higher corporate tax rate. No publicly available information gives an estimate of total costs or tax revenue.
No publicly available information.
No publicly available information.