Portland will tax public companies where CEO pay is 100 times employee average

Demorats being demorats.

 

liberal nonsense

From the Seattle Times: Moving to address income inequality on a local level, the City Council in Portland, Oregon, voted Wednesday to impose a surtax on publicly traded companies whose chief executives earn more than 100 times the median pay of their rank-and-file workers.

The surcharge, which Portland officials said is the first in the nation linked to chief executives’ pay, would be added to the city’s business tax for those companies that exceed the pay threshold. Currently, roughly 550 companies that generate significant income on sales in Portland pay the business tax.

Under the new rule, public companies doing business in Portland must pay an additional 10 percent in taxes if their chief executives receive compensation greater than 100 times the median pay of all their employees. Companies with pay ratios greater than 250 times the median will face a 25 percent surcharge.

The tax will take effect next year, after the Securities and Exchange Commission begins to require public companies to calculate and disclose how their chief executives’ compensation compares with their workers’ median pay. The SEC rule was required under the Dodd-Frank legislation enacted in 2010.

Portland’s executive-pay surcharge will be levied as a percentage of what a company owes on the city’s so-called business license tax, which has been in place since the 1970s. City officials estimated that the new tax would generate $2.5 million to $3.5 million a year for the city’s general fund, which pays for basic public services such as housing and police and firefighter salaries.

Criticism of how much chief executives are paid has risen in recent years as their compensation has grown substantially. In 2015, the median compensation for the 200 highest-paid executives at U.S. public companies was $19.3 million, up from $9.6 million five years earlier.

Comparing such compensation with how much lower-level employees earn is likely to show a very wide gulf. A 2014 study by Alyssa Davis and Lawrence Mishel at the Economic Policy Institute, a liberal-leaning advocacy group in Washington, found that chief executive pay compared with the earnings of average workers had surged from a multiple of 20 in 1965 to almost 300 in 2013.

thomas-piketty

Thomas Piketty (a French economist), a professor at the Paris School of Economics and an authority on income inequality who wrote “Capital in the Twenty-First Century,” said he favored the Portland tax as a first step. “This is certainly part of the solution,” Piketty wrote in an email, “but the tax surcharge needs to be large enough; the threshold ‘100 times’ should be substantially lowered.”

Steve Novick

Steve Novick

Taxing companies that dole out outsize executive pay in Portland was the idea of Steve Novick, a former environmental lawyer who has been a Portland city commissioner since January 2013. “When I first read about the idea of applying a higher tax rate to companies with extreme ratios of CEO pay to typical worker pay, I thought it was a fascinating idea,” Novick, a Democrat, said in a telephone interview. “It was the closest thing I’d seen to a tax on inequality itself.”

Novick, who lost a bid for re-election last month, said he had begun weighing such a tax about a year ago but did not discuss it publicly until September.

Portland Mayor Charlie Hales

Portland Mayor Charlie Hales

Another supporter of the tax is Charlie Hales, the mayor of Portland.  “Income inequality is real; it is a national problem, and the federal government isn’t doing anything about it,” Hales, a Democrat, said in a telephone interview. “We have a habit of trying things in Portland; maybe they’re not perfect at the first iteration. But local action replicated around the country can start to make a difference.” Hales, who did not seek re-election, will leave office at the end of the month.

Portland officials said other cities that charge business-income taxes, such as Columbus, Ohio, and Philadelphia, could easily create their own versions of the surcharge. Several state legislatures have recently considered bills structured to reward companies with narrower pay gaps between chief executives and workers. In 2014, a bill in California proposed reducing taxes for companies whose executives were paid less than 100 times above the median worker. The bill did not pass.

Among those objecting to the new tax was the Portland Business Alliance, a group of 1,850 companies that do business locally. Alliance officials have predicted that the measure would not have the desired result of reducing income inequality.

“We see it as an empty gesture,” Sandra McDonough, the alliance’s president and chief executive, said in a telephone interview. “We think they’d be far better off trying to work with business leaders to create more jobs that will lift people up and improve incomes.” Publicly traded companies, she added, are “an easy group to pick on.”

Hales conceded that the pay ratio is “an imperfect instrument” with which to solve the problems of income inequality. “But it is a start.”

government solve all problems

DCG

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20 responses to “Portland will tax public companies where CEO pay is 100 times employee average

  1. What the? If it ain’t illegal it outa be. typically liberal instead of getting on the bandwagon they’re trying to pull people off. Ya ain’t equal till you’re all poor and equal.

    Liked by 1 person

  2. Here’s a thought: Levy an additional 25% tax on anyone working in the public sector making more than the minimum wage.
    That should “equalize” matters, right?

    Liked by 1 person

    • I think this policy is socialistic. But, and a big but, if the company is a necessary provider of utilities and a monopoly of sorts then the government might be justified for such action being that the extreme incomes of the top officers of that company pay is a cost increase for the consumer who has no choice but to buy from that company.

      Like

      • How a company, private or public, pays its employees should be of little concern PROVIDED they remain within federal wage limits and contract parameters and cost over-runs are NOT allowed.

        This is precisely why there’s a mandatory bidding process (which should be open to the public’s viewing – no “sealed bids”) and monopolies should be outlawed.

        Like

    • If this taxation policy were to be instituted then how does that work for the Hollywood types and the pro sports people who definitely make millions more than a minimum wage earner?

      Liked by 1 person

      • Those types are exempt, don’t you know that?
        Sure, the Hollyweirdo’s and the unpatriotic Sportsmen are NOT included.
        They just believe everyone else should be.

        BOYCOTT SF 49’s until Kaper donk stands up

        Liked by 2 people

    • I like it!
      And while they are at it, why not tax “Poverty”? If you want to get rid of something, TAX it, right?
      The Lib/Prog solution to anything they don’t like is to tax it. So they must love “poverty”, they keep subsidising it and encouraging people to stay poor, and indoctrinating kids into behaviors that will guarantee they stay poor.

      Liked by 1 person

  3. Pingback: Portland will tax public companies where CEO pay is 100 times employee average — Fellowship of the Minds | kommonsentsjane

  4. Kevin J Lankford

    They would all do the common working man, or woman, a big justice just to go back to school, study our Constitution, and learn the difference in the definitions of “income” and “wage”. But then a simple glance at a dictionary could do as well.

    When governments presume the authority to tax the common workers wage, that amounts to a claim on our labor. That being the definition of slavery.

    Liked by 1 person

    • Heck Kevin, ignorant Americans think we are a democracy instead of the Republic created by our founders.
      The income tax is not legal in the first place. It was never ratified which is a constitutional requirement.

      Liked by 1 person

  5. The prescription is wrong but the sentiment is correct: White collar crime thrives in the board room, and costs society just as much—if not more—than street crime. The hippies in the 1960’s began beating the drum for prosecution of white collar crime. Had the government under LBJ done so (FAT CHANCE!) maybe a monster like George Soros could have been thwarted.
    But I am daydreaming. I believe it was Cicero who asked, rhetorically, “Who will watch the watchers?” As long as there’s a GRAVY TRAIN to be had, the answer shall be “No One!”

    I find it OBSCENE that the CEO of the Nestle’s Corporation can make 1,000 times my wage and BUY TWO lakes in California for less than a penny on the dollar, have his Company earn $200 million, and pay himself for years on that money—all in the middle of the worst drought in the State’s history!

    Like

  6. This tax is on par with the lunacy from Ayn Rand’s “Atlas Shrugged”.
    Only liberals in Portland would come up with a scheme to penalize success.

    Liked by 1 person

  7. #The Portlandia Socialist Soviet Republic!

    Liked by 1 person

  8. By definition income taxes, and especially a system that graduates taxes according to income, are unconstitutional.

    Liked by 1 person

  9. What’s wrong with taxing CEO’s that make obscene amounts of money, while their workers can barely get by? Shame on you! You justify greed and condone exploitation of everyday Americans, while politicizing the issue and blaming it on liberals and calling the whole idea socialist. Meanwhile, YOU will never see that much money in your lifetime working for these same CEO’s. Yes, most of these CEO’s support and vote for republican candidates. But it’s because they don’t want any government oversight knowing just how greedy and unethical THEY really are and how they are slowly turning this country into one giant plantation. When the profits start to go down, they’ll sell out or ship the company overseas! Wake up!

    When does the left/right rhetoric stop and common decency and most importantly, common sense kick in? Down here in Florida, retirees who worked their whole lives and are in their 80’s, are pushing brooms in Mcdonalds or bagging groceries for a lousy $8/hour because they can’t afford to pay their health insurance deductibles and eat too. I suppose they’re just whiny socialists though, right? In case you’ve forgotten, Trump already has plans and the balls to tax these insanely wealthy people into oblivion, while leaving the wage earners and the working poor alone. And rightfully so! Does that make him a progressive libtard too?

    Like

    • “What’s wrong with taxing CEO’s that make obscene amounts of money, while their workers can barely get by?” If you want to tax CEOs who make an “obscene” amount of money, have at it. Just don’t expect to draw a lot of businesses to your tax jurisdiction. And if a worker can barely get by, they are certainly free to look for employment elsewhere or obtain higher-paying skills or more education.

      “You justify greed and condone exploitation of everyday Americans, while politicizing the issue and blaming it on liberals and calling the whole idea socialist.” The greedy one here is the government, which has never met a tax they didn’t like. Save the drama of exploitation for countries that truly do exploit workers. We have state and federal laws to protect workers.

      “When does the left/right rhetoric stop and common decency and most importantly, common sense kick in?” The rhetoric never stops with the left. And their common sense doesn’t exist.

      “…because they can’t afford to pay their health insurance deductibles…” I can’t afford my health insurance premiums (thanks to Obamacare) which increases EIGHTY PERCENT next year. Thankfully, the republicans plan to gut that disastrous monster.

      Where did you read that Trump will tax the insanely rich? From his plan:

      “Propose, pass, and sign into law a massive TAX CUT for all working Americans and unleash the jobs-creating power of our small businesses.”

      https://fellowshipoftheminds.com/2016/10/24/trumps-gettysburg-address-what-he-will-do-in-first-100-days/

      “But it’s because they don’t want any government oversight knowing just how greedy and unethical THEY really are and how they are slowly turning this country into one giant plantation. When the profits start to go down, they’ll sell out or ship the company overseas!” Talk about rhetoric. Repubs and CEOs don’t want oversight? You mean like in Flint? They go overseas? Like so many proggie high techs have done? Nice talking points though..

      Liked by 1 person

    • And Darcy, your comments combined with your email address (exdem@xxx.com), indicate your aren’t an “ex dem.” Your shaming of “greed’ and use of words such as plantation, exploitation, oversight, unethical, blah, blah, blah, shows you have a long way to go before you leave the democrat platform. Sounds like you are more of a #NeverTrump fan more than an ex-demorat.

      Liked by 1 person

  10. These Portland officials are either idiots or are playing the people there. More of this communistic goal of creating income equality will just destroy the Portland economy as well as the peoples’ income. The only thing income equality produces is the end result of very low income for everyone, a dead economy and lifestyle, and is forcing everyone to have the same karma of poverty. Liberals who believe that the wealthy are going to pay for being wealthy are fooling themselves and they must be ignorant of the wealthy. They will just move their company out of Portland and there goes more jobs from Portland and the executives keep their great wealth – they didn’t become wealthy by being stupid. The only people being affected by it will be us! What will get through to the liberals and wake them up to reality??? I really wonder!

    Liked by 1 person

  11. Good luck with that, komrades. 😀

    Liked by 1 person

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