Now, as the gap between CEO pay and the median worker wage increases each year, is a great time to enact CEO TAXES across the state and the nation.
As Julie Conley reported on Common Dreams about the AFL-CIO Executive Payroll Watch report, “Starbucks, which has made headlines in recent years both for its store employees’ fight to unionize across the United States and for its executives’ illegal union-busting tactics, had far-and-away the largest gap between CEO and median worker pay in 2024, with CEO Brian Niccol taking home $95.8 million and the median employee earning just $14,674. That makes the wage gap 6,666-to-1 at the coffee chain.”
But gaps of at least 1000 to 1 or more are also reported for CEOs and median worker pay at Coca-Cola, General Electric, Ross Stores, YUM! Brands, Chipotle and more. The pay gap ratio for Coca-Cola – 1995:1, for Ross Stores – 1770:1, for YAM! Brands – 1440:1; General Electric – 1279:1. On the lower edge of the list is Kroger Co – 457:1 and Home Depot – 443:1; Boeing – 183:1; and going on down to the good guys like Berkshire Hathaway – 4:1; and Redfin Corp – 3:1. Accoding to this AFL-CIO report, “In 2024, CEO pay at S&P 500 companies increased 7% from the previous year – to an average of $18.9 million in total compensation. Meanwhile the median US worker made just $49,500, a 3% bump over the previous year.
What is a CEO Tax? What is it’s purpose? A CEO TAX is a surcharge on corporate taxes and is determined by the gap size between CEO pay and median worker pay for the CEO’s corporation. The higher the pay gap, the higher the tax on the corporation. The AFL-CIO Executive Payroll Watch report on this gap found that the average S&P 500 executive made an eye-popping 285 times more than their median worker did, up from a 268-to-1 ratio in 2023.
The purpose of the tax is two fold:
1. increase the revenue funding the government entity enacting the CEO TAX
2. Decreasing the size of the gap between CEO’s wage and the median worker wage.
Where has it been enacted? Only two cities have enacted such a tax, Portland OR, via the a City Council vote in 2016, and later San Francisco enacted such a tax via an initiative campaign, receiving a more than 65% positive vote. The enacted taxes are different, the Portland OR tax only is imposed on public corporations whereas the San Francisco tax is imposed on both public and private corporations.
Who get taxed? This is not a tax on individuals. It is a tax imposed on corporations doing business in particular locations but only those corporations with an excessive gap between CEO pay and median worker pay.
How much is the tax? The amount of the tax can vary. In Portland, the tax is 10% of the corporation’s Business License Tax liability if the gap is at least 100 to 1 and increased to 25% if the gap is 250 to 1; the Portland tax was expected to raise $2.5 million in the first year. In fact, the first year it generated over $3 million and increased each year through 2022, when in generated over $7 million.
The San Francisco tax, enacted in 2020, generated $206 million in fiscal year 2023 alone. A company whose highest paid employee earns 200 times more than its median San Francisco worker will get an extra 0.2% charge on its gross receipts. For companies whose CEO makes 300 more, the charge jumps to 0.3% and so on. The tax caps at 0.6%, and only companies with gross receipts over $1.17 million will be targeted.
At the Federal level, Sen. Sanders has introduced a proposed CEO Tax (S2818, Tax Excessive CEO Pay Act of 2025) on those corporations with a CEO Median Worker pay gap over 50:1. Gap of 50:1 is .5%; gap is 100:1, tax is 1%; greater than 200:1, tax is 2%; greater than 300:1, 3 % tax; greater than 400:1, tax is 4%; greater than 500:1, tax is 5%. The tax is applied to a corporation’s federal flat tax (21% of taxable revenues). These surtax will not be applied to corporations with annual gross receipts of less than $100,000,000.
The other Senate co-sponsors of S2818 include OR Senator Merkley.
The identical federal proposal has also been introduced in the US House of Representative as HR5298. 25 Representatives are listed as co-sponsors; no Oregon Representative is listed as co-sponsoring at this time. Time to make some calls and state your support and your desire that they sign on as co-sponsors.
What action should I take? Contact your US Representative and Senator, asking that they co-sponsor the federal bills, and contact your OR state representative and senator and ask that they support the creation of a CEO TAX at the state level. (I will be asking Rep. Rob Nosse and Sen. Khanh Pham to introduce this into the Oregon legislature). And then contact your local city council members and ask that they enact such a tax at the local level.
To learn the name of your OREGON state representative/senator go to https://tinyurl.com/ORRepsSenators
To learn the name of your OR US Representative/Senators: https://tinyurl.com/leg-reps
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