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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YouKnowWho
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YouKnowWho

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.

Hadenoughalready
Guest

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?

lynnmccrann
Guest
lynnmccrann

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.

Hadenoughalready
Guest

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.

lynnmccrann
Guest
lynnmccrann

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?

James
Guest
James

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

Longknife 21
Guest
Longknife 21

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.

Hadenoughalready
Guest

Too bad we can’t tax “stupid”…..or can we?

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Kevin Lankford
Member
Kevin 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.

lynnmccrann
Guest
lynnmccrann

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.

Steven Broiles
Member

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… Read more »

Zorro
Guest
Zorro

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.

aroamingcatholicny
Guest

#The Portlandia Socialist Soviet Republic!

edwitness
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edwitness

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

Darcy Davis
Guest
Darcy Davis

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… Read more »

Pattiann Wilk
Guest
Pattiann Wilk

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… Read more »

Dave
Editor
Dave

Good luck with that, komrades. 😀