Bernie Sanders unveils 'inequality tax' targeting companies where CEOs make far more than workers
- Senator Bernie Sanders on Monday announced a new income inequality plan that would place taxes on companies that pay CEOs more than 50 times the pay of the median worker.
- The plan would raise $150 billion in a decade, which would be used to pay for Sanders' plan to eliminate medical debt.
- Companies like McDonald's, JPMorgan, and Walmart would pay hundreds of millions more in taxes if the plan had been in effect last year, the Sanders campaign said.
- Read more on Business Insider.
On Monday, Democratic presidential hopeful Sen. Bernie Sanders announced a new tax plan aimed at bridging the pay gap between the highest paid top executives and their employees.
The Income Inequality Tax Plan will place taxes on companies with "exorbitant" pay gaps between executives and typical workers.
"The American people are sick and tired of corporate CEOs who now make 300 times more than their average employees, while they give themselves huge bonuses and cut back on the healthcare and pension benefits of their employees," Sanders said in a statement. "They want corporations to invest in their workers, not just dividends, stock buybacks and outrageous compensation packages to their executives."
The plan comes on the heels of Sanders' separate wealth tax plan, which would tax the nation's ultra rich. CEO pay has become a hot topic, especially as its been increasingly called out by economists, politicians, and even activists such as Abigail Disney - she called former CEO Bob Iger's pay a "moral issue" when she testified before the US House Committee on Financial Services.
Sanders' inequality tax will raise an estimated $150 billion over the next decade, according to the campaign. The revenue generated from the tax would be used to pay for Sanders' plan to eliminate medical debt.
The plan would impose tax rate increases on companies where the ratio of pay between the CEO and median workers is above 50 to 1. If the CEO is not the highest-paid executive at the firm, the ratio will be calculated using the highest-paid employee.
The tax penalty begins at 0.5% for companies where the ratio falls between 50 and 100 and increases incrementally up a 5% tax for companies where the pay ratio is more than 500. The tax would apply to all private and publicly held corporations with annual revenue of more than $100 million, the campaign said.
Here's how much companies would have paid if the tax were in effect last year, according to the Sanders campaign:
- McDonald's would have paid up to $110.9 million more in taxes.
- Walmart would have paid up to $793.8 million more in taxes.
- JPMorganChase would have paid up to $991.6 million more in taxes.
- The Home Depot would have paid up to $538.2 million more in taxes.
- American Airlines would have paid up to $18.8 million more in taxes.
"At a time of massive income and wealth inequality, the American people are demanding that large, profitable corporations pay their fair share of taxes." Sanders said. " It is time to send a message to corporate America: If you do not end your greed and corruption, we will end it for you."
Companies would not owe any additional taxes under the plan if they increased annual median worker pay to $60,000 and curbed CEO compensation to $3 million, the Sanders campaign said.