California Considers Taxation For Excessive CEO Pay

California lawmakers are debating a proposal to tax corporations more when their CEOs are paid more than 100x their employees.
California Considers Taxation For Excessive CEO Pay

This is California at its progressive best. I'm sure Peter Thiel and his pals are crimson with anxiety over the possibility that the legislature might pass a tax increase on the CEOs in our state.

ThinkProgress:

If California companies want to keep paying their CEO’s a hundred times better than their workers, they could face higher tax rates. A bill to impose higher tax rates on companies with excessively high CEO-to-worker pay ratios passed its first legislative hurdle on Thursday, advancing out of a state Senate committee on a 5-2 vote.

If SB1372 were to become law, which its authors told the Associated Press is unlikely, the state’s current flat-rate corporate income tax would be replaced by a sliding scale. Most companies would pay an income tax rate ranging from 7 percent to 13 percent depending on the ratio between their top executive’s earnings and what their median employee earned in the same year. Financial companies would face a scale from 9 percent to 15 percent.

I put long odds on this ever making it into law. After the Great Corruption Purge in the California Senate, Democrats no longer have a supermajority, which is what it takes to pass a tax increase in this state, thanks to Proposition 13.


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