Sen. Bernie Sanders (I-VT) rolled out another aggressive tax proposal on Monday as he aims to address “income inequality” by taxing companies that demonstrate “large gaps between their CEO and median worker pay.”
Sanders is proposing to close the “income inequality” gap by punishing companies that have CEOs making 50 times more than the average employee via additional progressive corporate taxes.
“Americans are sick and tired of corporate CEOs making hundreds of times what their workers make,” Sanders tweeted.
“We say to corporate America: If you don’t end your greed and corruption, we will end it for you,” he added:
Americans are sick and tired of corporate CEOs making hundreds of times what their workers make.
Walmart: 1,076 to 1
The Home Depot: 486 to 1
Nike: 379 to 1
We say to corporate America: If you don't end your greed and corruption, we will end it for you. https://t.co/0fW4y4rALS
— Bernie Sanders (@BernieSanders) September 30, 2019
“Under the new Sanders plan, companies with large gaps between their CEO and median worker pay would see progressively higher corporate tax rates with the most unequal companies paying five percentage points more in corporate taxes,” Sanders’ plan states.
The plan does not just apply to CEOs. Rather, the ratio is based on whoever is the highest-paid employee at the company, and it penalizes them accordingly.
“You have CEOs making 500 or 1,000 times more than the median income worker — that’s a signal of a lot of what is wrong in this country,” Sanders told the Washington Post.
“We want to make clear that’s bad policy, and we will impose taxes on the most egregious examples,” he added.
The plan states:
The tax penalties would begin at 0.5 percentage points for companies that pay their top executives between 50 and 100 times more than their typical workers. The highest penalty would kick in for companies that pay top executives over 500 times worker pay. These rates, if current corporate pay patterns continue, would raise around $150 billion over 10 years.
“This plan would apply to all private and publicly held corporations with annual revenue of more than $100 million,” his plan notes.
The Sanders campaign boasts of the additional revenue the government would have generated if his progressive penalization were in effect.
- 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.
However, critics say Sanders’ proposal would hurt companies overall by “forcing them to hire less talented CEOs, reducing the overall competitiveness of U.S. firms,” the Washington Post reported:
Brian Riedl, a budget expert at the conservative think tank the Manhattan Institute, said such a tax could dramatically affect industries like fast food or retail that naturally pay lower wages, while leaving others — such as Silicon Valley — relatively unscathed.
“I trust the market to set salaries more than I trust Bernie Sanders,” Riedl said.
Kyle E. Pomerleau, chief economist at the conservative-leaning Tax Foundation, also questioned whether the plan would simply force large companies to reclassify employees as independent contractors as a means of avoiding the tax.
Sanders claims the revenue generated from the plan would fund his proposal to eliminate $81 billion in medical debt.
The latest progressive tax proposal comes on the heels of an “extreme wealth tax,” which Sanders rolled out last week after declaring that “billionaires should not exist”:
Billionaires should not exist. https://t.co/hgR6CeFvLa
— Bernie Sanders (@BernieSanders) September 24, 2019