Bernie Sanders targets ‘excessive’ CEO pay in corporate tax proposal

Bernie Sanders has proposed a tax on corporations where a company’s chief executive is paid more than 50 times the median worker, as the senator flexes his position as the new chair of the Senate’s Budget Committee to highlight wealth and income inequality and push for higher worker wages.

“Right now, I happen to believe that this country is on its way to an oligarchy,” the progressive Senator from Vermont told The Wall Street Journal, which first reported the proposal.

Under the Tax Excessive CEO Pay Act, co-sponsored by Senator Barbara Lee, Walmart would pay up to $855 million more in taxes, and pharmacy retailer CVS would pay up to $450 million more in taxes, according to the senators.

“The average CEO today makes up to 200-300x the average pay of their workers,” she said in a post on Twitter on Tuesday. “This kind of pay disparity exacerbates income inequality and wage stagnation.”

On Wednesday, the senator will preside over a Budget Committee hearing on income inequality, with witness testimony from an Amazon employee at the company’s fulfilment centre in Alabama, where more than 5,000 workers are voting to determine whether to join a labour union, the first in the retail giant’s history.

Mr Sanders requested Amazon chief Jeff Bezos to attend the hearing. He declined.

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“Jeff, you’re worth $182 billion – that’s a lot of money,” the senator told MSNBC on 14 March. “What is your problem with allowing workers in Alabama to organise for better wages and better working conditions? You can afford to pay them more.”

The senator told the newspaper that he plans to hold a hearing later this month on corporate tax obligations.

Last month, he held another hearing – “Should Taxpayers Subsidise Poverty Wages at Large Profitable Corporations?” – with executives from Costco and Walmart, as the senator rallied support for raising the federal minimum wage to $15 an hour and condemned large companies paying “starvation” wages that have forced workers to rely on public assistance while the companies see record profits.

“The simple truth is no one in American can live with dignity or live on $11 or $12 an hour,” he said at the hearing. “And I must say that I have talked to too many workers in this country who, with tears in their eyes, tell me the struggles they have to provide for their kids on starvation wages.”

Mr Sanders’ effort to raise the minimum wage as part of the Senate’s American Rescue Plan coronavirus relief package failed by a vote of 42-58 against. It needed 60 votes to pass. All Senate Republicans, seven Democrats and one Independent senator rejected the amendment.

The federally set minimum wage has not been raised since 2009. A hike from $7.25 to $15 an hour would lift nearly 1 million Americans out of poverty and raise wages for millions of workers, according to the Congressional Budget Office.

Its 2021 report says a wage increase could lead to 1.4 million job cuts by 2025, but it also would lift 900,000 people out of poverty and raise incomes for 17 million people, or roughly 10 per cent of the US workforce. Another 10 million workers who earn slightly more than $15 per hour would also see pay raises.