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Bernie Sanders wants higher taxes on big companies that pay huge CEO salaries.
Democratic presidential contender Bernie Sanders on Monday said he would add an extra tax on companies such as Home Depot or JPMorgan that pay CEOs much higher salaries than their workers, the latest in a series of plans to shrink the pay gap between C-suite executives and average workers in an effort to help fund a vast expansion of federal social programs.
Sanders said corporations could face an additional tax of up to 5% if chief executives earned more than the 500 times the salary of a firm’s average worker. The added tax would start at 0.5 percentage points for firms whose CEOs earn 50 to 100 times more than the average employee.
“The American people are sick and tired of corporate CEOs who now make 300 times more than their average employees, while they give themselves huge bonuses and cut back on the health-care and pension benefits of their employees,” Sanders said. “It is time to send a message to corporate America: If you do not end your greed and corruption, we will end it for you.”
If the Sanders plan had been in effect in 2018, JPMorgan Chase & Co. JPM, +0.07% would have paid an additional $992 million in taxes, to cite one example.
CEO Jamie Dimon earned about $31 million last year, including about $1.5 million in salary and the rest in stock options. His salary was 381 times higher than the average bank employee, the Sanders campaign estimated.
Other big companies that would have paid sharply higher taxes include Walmart WMT, +0.47%, Home Depot HD, +0.95% and Nike NKE, +1.10%. The Sanders plan would also cover privately run companies and require them for the first time to disclose pay data just like publicly traded firms.
The extra tax would encompass any business with $100 million in annual revenue and raise $150 billion over 10 years, the Sanders plan estimates. The money would be used to reduce medical debt of American families.
Last week, Sanders unveiled a plan to go after billionaires with a wealth tax of up to 8%. He also highlighted a proposal to establish a national standard for rent control.
Sanders has rolled out a flurry of proposals after falling behind rivals Joe Biden and Elizabeth Warren in the polls. The 78-year-old U.S. senator from Vermont has often described himself as a socialist, though he ran for the Senate as an independent and caucuses with the Democrats.
If enacted, Sanders’ plans would arguably be the most aggressive among the wealthiest nations at seeking to reduce income inequality.
Yet even if Sanders were elected president, some of his proposals would have a hard, if not impossible, time getting through Congress, especially if Republicans control one or both houses. Even some Democrats would object to plans, such as Medicare for All or national rent control.
The vast majority of economists on both left and right concur that rent control is ineffective.