Bernie Sanders wants to tax companies that pay their CEOs way more than their workers

[Yo_Mama_Been_Loggin]

The average CEO of an S&P 500 company made 287 times more than their median employee last year, and Sen. Bernie Sanders wants to force them to change that — or pay for it.

Sanders’s presidential campaign unveiled its latest proposal to curb massive inequality in the United States Monday: An “Income Inequality Tax” on companies with massive pay disparities between the executive suite and the median worker.

The plan calls for increasing the corporate tax rate by half a percent on companies that pay their chief executives 50 times more than their median employee, and progressively hike up the corporate rate the bigger the inequality. The current corporate tax rate is 21 percent — the result of President Donald Trump’s massive corporate tax cut.

Under Sanders’s proposal, if a CEO makes more than 100 times the median employee, their corporate tax rate increases 1 percent, to 22 percent; more than 200 percent the median employee, the company pays an additional 2 percent on the corporate tax rate, and so on, up to a 5 percent increase to the corporate tax rate for companies that pay their CEOs more than 500 times the median employee.

https://www.msn.com/en-us/money/markets/bernie-sanders-wants-to-tax-companies-that-pay-their-ceos-way-more-than-their-workers/ar-AAI3PTn?li=BBnbfcN

[NurseJackie]

1. ...

[Cuthbert Allgood]

10. Typical response a Bezos Bro would make.

Or something like that. I'm not quite up to speed on who to smear like all y'all are.

But, seriously, why is this a bad idea?

[George II]

2. That is outright illegal.

[Voltaire2]

3. Why is it illegal?

[George II]

5. Because it violates the law.

[Voltaire2]

7. very good.

I didn't think you actually had a sensible argument. Thanks for confirming!

[George II]

9. I guess you missed it then.

[Voltaire2]

15. It wasn't me who missed.

lulzd

[George II]

16. He's proposing to tax people based on occupation, not income, and also not on the income itself...

...but on the ratio of one's income vs. that of others.

That's not legal.

lulzd

[Voltaire2]

17. Actually it doesn't tax people at all.

it adds a surcharge to corporate taxes if CEO to median employer salary ratios exceed certain limits.

So again, if enacted into law why would this be illegal?

More to the point why would any democrat oppose this?

[cstanleytech]

8. Laws can be rewritten. That aside I personally favor a different change which would be

raising corporate taxes on large companies that employee more than 500 people to whatever the highest level has been in the past 100 years first.
After that give the corporations a % tax break on that amount based upon the % of their workers (including temp workers) that earn more atleast 500% over the poverty level or more per year and the more workers they have that earn that amount the lower their taxes.
Hell if they pay all their workers that kind of wage I would even approve of 0% income tax for corporations.

[Cuthbert Allgood]

11. Nice circular argument.

Well played.

[Blue_true]

13. It is selective taxation, as a opposed to traditional conditional taxation.

With conditional taxation, a company or person's earnings determined the tax rate. That is legal and the outcome is predictable. With selective taxation, a tax collecting agency decides how much is owed on a rolling basis, making planning for taxation difficult. We can pass selective taxation into law, but do we really, really want that fight?

A better plan would be to refine progressive tax rates and eliminate abusive tax shelters. Such a process would provide money for universal medical coverage and free or reduced cost tuition and room and board at colleges or trade schools, effectively putting thousands of dollars tax-free into the pockets of poor and middleclass Americans.

[Voltaire2]

14. That is why you don't like it.

I’m still waiting for how the plan would be ‘illegal’ even if enacted as a law.

[Blue_true]

18. If it is law, then by definition, it would not be illegal. Constitutional is another matter.

Don't get me wrong, I believe rich people should pay more taxes, the issue is how to enact such change.

[Voltaire2]

19. There is nothing unconstitutional about it either.

[Joe941]

4. Bernie nailed it again! He is on the cutting edge of policy!

[BlueMississippi]

12. This is unworkable

Most CEOs get a base salary plus stock options which are related to the performance of the company's stock. Many upper management employees are compensated this way because for the company, it is a non-cash payment in equity.

The base salaries are usually $300K to $1M and the median salary of the workers is around $60K - so no company pays 50x to the CEO.

The second problem is that there are top-heavy companies and bottom-heavy companies which would skew the median price.

For a company like PriceWaterhouseCoopers or Goldman Sachs, people earning higher pay exceeds the people earning lower pay - so their CEO's multiple will never reach 50x. On the other end of the scale is a company like Yum Brands where an overwhelming majority of employees are fast food workers and earn less. Those companies also operate on very thin margins and this becomes a violation of equal protection clause for them because their CEO probably makes 500x of the median.

This shows a fundamental ignorance of business on the part of BS and by lumping all businesses together like this would invite legal action under the equal protections clause. It is also unamerican to tax company A at 25% and company B at 21%.

Furthermore, this will neither increase the pay of lower level employees nor reduce the pay of CEOs but it may lead to layoffs of lowest paid employees to push up the median salary.

Like most things BS, this is simply an attempt to exploit the anger some people have directed at rich people.