Rashida Tlaib and Bernie Sanders introduce the Tax Excessive CEO Pay Act

CEO pay is out of control, with the possibility of Tesla executive Elon Musk becoming the world’s first trillionaire. Meanwhile, prospects for average workers have dimmed with decades of stagnated wages and a majority of Americans living paycheck to paycheck. 

On Monday, U.S. Rep. Rashida Tlaib of Detroit and U.S. Senator Bernie Sanders of Vermont introduced the Tax Excessive CEO Pay Act to rein in what they call the “obscene salaries of America’s top executives.” 

House Resolution H.R. 5298 proposes taxing corporations at a higher rate if they pay their executives more than 50 times what their workers earn. If passed, Tesla would be forced to pay up to $100 billion more in taxes over the next decade if Musk’s massive pay package is approved.

“Working people are sick and tired of corporate greed. CEOs are now making 290 times more than their average worker,” Tlaib said in a statement. “It’s disgraceful that corporations continue to rake in record profits by exploiting the labor of their workers. Every worker deserves a living wage and human dignity on the job. I’m proud to re-introduce the Tax Excessive CEO Pay Act with Senator Bernie Sanders to address the massive income and wealth inequality in our nation. It’s time to make the rich pay their fair share.”

The Tax Excessive CEO Pay Act was first introduced by Sen. Sanders in 2019, with different versions re-introduced since then. 

Meanwhile, the wealth of the top 1% has continued to explode, hitting a record-setting $44 trillion in 2024.

“We can no longer tolerate a rigged economy that enables the richest man in the world, Elon Musk, to become the first trillionaire while 60% of Americans live paycheck to paycheck and millions work longer hours for lower wages,” said Senator Sanders. “It is unacceptable that the CEOs of the largest low-wage corporations make more than 630 times what their average workers make. This is not only morally obscene, but also insane economic policy. No society can survive when one man becomes a trillionaire while the working class is unable to afford basic necessities. At a time of record-breaking income and wealth inequality, we must demand that the wealthiest people and most profitable corporations in America finally pay their fair share of taxes and treat all employees with the respect and dignity they deserve. That’s precisely what this legislation begins to do.”

In a statement, Tlaib and Sanders note that in the 1970s, CEOs of successful firms only made 20-30 times more than their workers. 

In 2024, top CEOs made 290 times more than the average pay of their typical workers, including at Walmart ($27.4 million, or 930 times more), JPMorgan Chase ($37.7 million, or 348 times more), Home Depot ($15.6 million, or 443 times more), and Coca-Cola ($28 million, or 1,980 more).

Last year, the CEO of Starbucks made $95.8 million in 2024, or 6,666 more than the company’s workers.

Tlaib and Sanders say the legislation would have raised billions more in taxes if it was in effect in 2024, and if firms raised median worker pay to $60,000 and capped CEO pay at $3 million, they would not owe any additional taxes.

The legislation also calls for the Treasury Department to crack down on corporate tax avoidance schemes.

A 2024 poll found a staggering 83% of Americans believe income inequality between CEOs and workers is a problem, including a majority of Democrats, Republicans, and independents.

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