Sign in Subscribe
Workers

CEO Accountability and Responsibility Act Introduced to Address Income Inequality and Corporate Greed

Strategic Insights

— 1 min read

Congressman Mark DeSaulnier (CA-10) has introduced the CEO Accountability and Responsibility Act (H.R. 5019) to address the growing income inequality and corporate greed in the United States. The bill aims to limit corporate power, invest in working Americans, and reduce the income disparity between CEOs and workers. The proposed legislation would increase corporate taxes on companies with extreme disparities between CEO and worker pay, and offer preferential treatment in federal contracts to companies with pay ratios below 50:1.

Key Takeaways:

  • The CEO Accountability and Responsibility Act would increase corporate taxes on companies with pay ratios exceeding 300:1, as seen in top S&P 500 companies.
  • The bill aims to address the growing income inequality, where the average CEO earns over 300 times the compensation of a typical worker, up from 20 to 30 times in the 1970s.
  • Companies like Starbucks and Abercrombie & Fitch would be forced to pay millions in additional taxes if the CEO Accountability and Responsibility Act were to become law, given their CEOs' pay ratios are over 6,000 times the company's median worker pay.
  • Similar policies have been adopted by Portland, Oregon, and San Francisco, generating $3.5 million and implementing a tax on CEOs paid at more than 100:1 ratio, respectively.
  • The bill is supported by numerous organizations, including AFL-CIO, American Sustainable Business Network, and United for a Fair Economy (UFE).
  • Congressman DeSaulnier first introduced a version of this bill during his time in the California State Senate.

Statistics:

  • The average CEO earns over 300 times the compensation of a typical worker, up from 20 to 30 times in the 1970s.
  • The CEOs of Starbucks and Abercrombie & Fitch make over 6,000 times what the company's median worker makes.
  • A similar policy in Portland, Oregon, generated $3.5 million in the first year.
  • A tax on CEOs paid at more than 100:1 ratio was passed into law in San Francisco in 2020.

Sources:

  • Congressman Mark DeSaulnier (CA-10) news release, no date available
  • AFL-CIO, American Sustainable Business Network, Americans for Financial Reform, Center for Popular Democracy, Consumer Action, International Brotherhood of Teamsters, International Federation of Professional & Technical Engineers, Institute for Policy Studies, Global Economy Project, National Federation of Federal Employees, NETWORK Lobby for Catholic Social Justice, Patriotic Millionaires, Public Citizen, Social Security Works, and United for a Fair Economy (UFE)

Read more