Congress targets CEO pay excess with corporate tax penalty
S. 2818 — Tax Excessive CEO Pay Act of 2025 · Filed by Bernie Sanders (I-VT) · 5 cosponsors · Introduced Sep 16, 2025 · Referred to committee
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What it does
This bill imposes a corporate tax penalty on large companies where the CEO (or highest-paid executive) earns more than 50 times the median worker's pay. The penalty increases the corporate tax rate by 0.5–5 percentage points depending on how extreme the pay ratio is. Companies with less than $100 million in annual revenue are exempt. The goal is to discourage extreme executive compensation by making it financially costly for corporations.
Why we flagged it
The bill's core mechanism is a straightforward corporate tax increase tied to executive-to-worker pay ratios. It is not a deregulation, subsidy, or carve-out, but rather a targeted tax policy designed to address income inequality through fiscal penalty.
What the text implies
- Companies may restructure compensation (stock options, deferred pay, perks) to reduce reported pay ratios without lowering actual executive wealth, potentially rendering the tax avoidable.
- The bill exempts private companies under $100M revenue, creating a cliff where mid-market firms face sudden tax exposure upon crossing the threshold.
The full analysis lists 4 implications of this text.
Who stands to gain
U.S. Treasury (increased corporate tax revenue); Workers at high-inequality firms (potential wage pressure reduction if companies choose to compress