This bill imposes a federal tax on very large companies—those with at least $100 million in annual revenue and over $10 million in wages—when their top executive earns more than 50 times the median worker. The tax is 1% of the extra CEO pay over 50 times the typical worker’s pay, and it increases as the pay gap grows wider—so the larger the gap, the higher the tax. The structure is intended to incentivize companies to raise worker pay or limit executive compensation. The bill also directs regulators to block avoidance tactics, prohibits deducting the tax from corporate income taxes, and holds related businesses jointly responsible.
