S 2312 — Equity in Compensation Act

Summary

Equity in Compensation Act This bill imposes an additional tax on the income of corporations that have gross revenues in excess of $1 billion and a wage disparity level in excess of 3,000%. A "wage disparity level" is defined as the ratio of the annual salary of the highest compensated officer of the corporation to the median annual salary of all employees of the corporation.

Bill Text

• Introduced Introduced in Senate Current html July 30, 2019

AI-generated reading aid from the bill's amendatory text — verify against the official bill.

This bill creates a new surtax on corporations with significant disparities in employee wages, specifically targeting those with gross revenues over $1 billion and wage disparity levels exceeding 3,000 percent.

• Part II of subchapter A of chapter 1 of the Internal Revenue Code of 1986

  SEC. 12. SURTAX ON CORPORATIONS WITH SIGNIFICANT DISPARITY IN EMPLOYEE WAGES. (a) In General.--In the case of an applicable corporation, there is hereby imposed (in addition to any other tax imposed by this subtitle) a tax equal to the applicable percentage of taxable income. (b) Applicable Corporation.--For purposes of this section, the term `applicable corporation' means any corporation which-- (1) has gross revenue for the taxable year in excess of $1,000,000,000, and (2) has a wage disparity level in excess of 3,000 percent. (c) Applicable Percentage.--For purpose of this section, the applicable percentage shall be determined as follows: The ``In the case of an applicable corporation with a wage applicable disparity level that is-- percentage is-- Over 3,000 percent but not over 5,000 percent.............. 2 Over 5,000 percent but not over 10,000 percent............. 3 Over 10,000 percent but not over 20,000 percent............ 4 Over 20,000 percent but not over 50,000 percent............ 5 Over 50,000 percent but not over 100,000 percent........... 6 Over 100,000 percent....................................... 10. (d) Wage Disparity Level.--For purposes of this section-- (1) In general.--The term `wage disparity level' means the ratio (expressed as a percentage) of the annual salary of highest compensated officer of the corporation to the median annual salary of all employees of the corporation. (2) Determination of annual salary.--The annual salary of any officer or employee shall be determined by taking into account the wages (within the meaning of section 3121(a), but determined without regard to any dollar limitation contained in such section) paid to such officer or employee for services performed during the taxable year. In the case of any officer or employee who is not employed for the entire taxable year, the wages paid for such taxable year shall be increased by an amount equal to the product of the average daily wages paid to such employees for the number of days during the taxable year during which such employee was employed and the number of days during the taxable year during which such employee was not so employed. (e) Exceptions; Treatment of Foreign Corporations.--Rules similar to the rules of subsections (c) and (d) of section 11 shall apply for purposes of this section.

  This adds a new surtax specifically targeting large corporations with extreme wage disparities.

• Table of sections for part II of subchapter A of chapter 1 of the Internal Revenue Code of 1986

  relating to section 12 → relating to section 13

  This updates the references in the table of sections to accommodate the new surtax section.

• The amendments made by this section shall apply to taxable years beginning after December 31, 2019.

  This establishes the effective date for the new surtax provisions.

Action History

1. July 30, 2019

   Introduced in Senate

2. July 30, 2019

   Read twice and referred to the Committee on Finance.

Sponsors

• Jeff Merkley · Primary

Subjects