Voters want to tax outrageous CEO pay. Are lawmakers listening?

For decades, I’ve been conducting my own informal research on Americans’ views on CEO pay.

Whenever family, friends, or strangers ask me about my job, I tell them it involves investigating executive compensation. For example, last year I realized that: CEOs of America’s 100 Largest Low-Wage Employers On average, it’s more than 600 times the average employee’s income, and in many cases. thousands of Many times more.

People always see red when I share these numbers. And they are often selective in their words about the unfairness of it.

A new poll confirms my unofficial findings. Americans across the political spectrum are tired of overpaid CEOs and want something done about it.

data for progress investigation We asked voters about one possible congressional action: raising taxes on companies that pay their CEOs at least 50 times the average salary of their employees.

The policy would give companies with large internal disparities two options: reduce pay disparities or face higher IRS bills. For example, a company where half of its employees make less than $60,000 a year would have to limit CEO compensation to $3 million or less or increase employee pay to avoid higher taxes. Average compensation for S&P 500 CEOs will rise significantly in 2022 $16.7 million.

investigation resultOverall, 80 percent of participants supported the idea, including majorities across all political groups: 89 percent of Democrats, 77 percent of independents, and 71 percent of Republicans. In battleground states, 83 percent of likely voters supported the idea.

The Data for Progress results are consistent with two previous studies of tougher policy approaches. complete cap Comparison of executive pay to employee pay.Those polls will be taken one by one just capital And the other thing is Stanford Business School — found widespread public enthusiasm for such a cap, including among most Republicans.

Efforts to use tax policy to reduce corporate pay gaps have been gaining momentum for nearly a decade. His two cities in the United States— San Francisco and Portland — introduced such a tax many years ago. At the federal level, the 100-member Congressional Progressive Caucus recently convened. supported the proposal and the three Senate committee chairs express support In the same way.

With such widespread support, penalties for CEO-employee pay disparities should be squarely part of the big tax battle in 2025. At that time, several provisions of Trump’s 2017 Republican tax cuts for corporations and the wealthy would be repealed. is set to expire. This will be an important opportunity to push for bold tax changes that promote a fair and sustainable economy and reject the disastrous “trickle-down” paradigm.

Back in 2017, supporters of the Republican tax law promised that cutting the corporate tax rate at the center of the plan from 35 percent to 21 percent would lead to more and better jobs for ordinary workers. Instead, almost all the benefits of this rate cut are academic and government analysts Recently discovered funds are flowing to wealthy shareholders and executives. Employees below the top 10% of their companies experience: No trickle-down wage increases.

Reversing this failed policy should be part of the agreement emerging from the 2025 tax negotiations. And if higher corporate tax rates are combined with the widespread idea of ​​taxing the large pay gap between CEOs and employees, the chances are even higher, especially if Congress remains narrowly divided. It’s going to be expensive.

A pay gap tax for CEOs and employees may even gain support among some corporate reform advocates. extensive academic research We found that extreme pay disparities are bad for companies because they damage employee morale and productivity.

The problems of overpaid CEOs and underpaid workers will not go away on their own and are likely to get worse. Equivalence analysis Preliminary data for 2023 shows that CEO salaries at large companies increased by 11.3% last year, while the median salary for employees at these companies Dropped It increased by 9.3%.

It’s time for our government to take responsible action on the issues that have boiled the blood of Americans for far too long.

Sarah Anderson directs the Global Economy Project at the Institute for Policy Studies and co-edits Inequality.org. She is the author of her IPS Executive Excess report series on CEO compensation.