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Increased Corporate Tax for Companies with High CEO-to-Worker Pay Ratio.

This Act imposes an increase in the corporate tax rate for companies where the compensation of the CEO (or highest-paid employee) is more than 50 times the median worker compensation. The consequence is that corporations with the largest pay gaps will face higher tax burdens, potentially influencing their compensation strategies or pricing. These changes apply to tax years beginning after December 31, 2024.
Key points
Corporate Tax Hike: Companies with a pay ratio exceeding 50:1 between the highest-paid employee and the median worker will face an increased corporate tax rate.
Penalty Scale: The tax penalty increases progressively based on the pay ratio. For instance, a ratio of 500:1 or more results in a 5 percentage point tax increase.
Reporting Requirement: Large private corporations (with average annual gross receipts of at least $100 million) must calculate and report their pay ratio, even if they are not subject to SEC filing rules.
Anti-Avoidance Measures: The Treasury Secretary must issue regulations to prevent manipulation of the pay ratio, such as replacing employees with contractors.
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Additional Information
Print number: 118_S_3620
Sponsor: Sen. Sanders, Bernard [I-VT]
Process start date: 2024-01-18
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Source data: api.congress.gov
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OFFICIAL LEGAL TITLE

Tax Excessive CEO Pay Act of 2024

FREQUENTLY ASKED QUESTIONS

What is the official ID of this bill?

The official print number for this legislation is 118_S_3620.

Which chamber initiated this legislation?

This legislation was initiated in the Senate.

When did the legislative process begin?

The process officially started on 2024-01-18.

What are the main provisions?

Key points include:

  • Corporate Tax Hike: Companies with a pay ratio exceeding 50:1 between the highest-paid employee and the median worker will face an increased corporate tax rate.
  • Penalty Scale: The tax penalty increases progressively based on the pay ratio. For instance, a ratio of 500:1 or more results in a 5 percentage point tax increase.
  • Reporting Requirement: Large private corporations (with average annual gross receipts of at least $100 million) must calculate and report their pay ratio, even if they are not subject to SEC filing rules.
  • Anti-Avoidance Measures: The Treasury Secretary must issue regulations to prevent manipulation of the pay ratio, such as replacing employees with contractors.
What is the specific legal status?

The current status is Expired.

Where can I read the full text of this legislation?

The full official text is available at: View full text

Who is the primary sponsor?

The primary sponsor is Sen. Sanders, Bernard [I-VT].

What is the latest detailed status?

The latest detailed status is: Introduced in Senate

Is this summary verified?

Yes. This content was analyzed by AI and verified by the Lustra Judge System on 2025-12-26.

CATEGORIES

Taxes Economy Labor