This week Democratic presidential candidate Bernie Sanders unveiled his “income inequality” plan that calls for raising taxes on companies that pay their CEOs ridiculous salaries compared to their average worker.
“The American people want corporations to invest in their workers, not just dividends, stock buybacks and outrageous compensation packages to their executives,” wrote Bernie in an introduction to the plan.
Sanders points out the the rate of CEO pay versus median employees has skyrocketed since the 1950s. In the 1950s CEOs made 20 times more than their medium employees. In 2018 the average S&P 500 CEO made 287 times their median worker pay.
Under Sanders’ plan, any company 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.”
Any company with a CEO to median worker ratio above 50 to 1 would see a tax rate increase. Tax penalties begin at 0.5 percentage points and increase by the following scale:
- Between 50 and 100: +0.5%
- Between 100 and 200: +1%
- Between 200 and 300: +2%
- Between 300 and 400: +3%
- Between 400 and 500: +4%
- More than 500: +5%
What do these percentages translate to in real money? Well, according to Sanders, if these rates had been in place last year McDonald’s would have paid up to $110.9 million more in taxes, Walmart would have paid up to $793.8 million more, and MPMorganChase would have paid up to $991.6 million more in taxes.
“At a time of massive income and wealth inequality, the American people are demanding that large, profitable corporations pay their fair share of taxes,” said Sanders. “It is time to send a message to corporate America: If you do not end your greed and corruption, we will end it for you.”
Some examples of companies that pay their CEOs exorbitant rates compared to their workers are Walmart, which paid its CEO $26.3 million last year, 1,076 times more than the median Walmart worker; JPMorganChase which paid its CEO over $30 million last year, 381 times more than the median employee, and Home Depot, which paid its CEO more than $11.4 million, 486 times the median Home Depot employee.
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