01-09-2017, 10:18 AM
This was passed in December, but I didn't see it posted.
I understand the thought behind it, but I think they'll force jobs out of the area.
That or CEO's will use loopholes, like a $1 salary and the rest dividends, ect..
https://www.google.com/amp/www.forbes.com/sites/kellyphillipserb/2016/12/19/portland-plans-to-tax-companies-who-pay-ceos-100-times-more-than-workers/
I understand the thought behind it, but I think they'll force jobs out of the area.
That or CEO's will use loopholes, like a $1 salary and the rest dividends, ect..
https://www.google.com/amp/www.forbes.com/sites/kellyphillipserb/2016/12/19/portland-plans-to-tax-companies-who-pay-ceos-100-times-more-than-workers/
Quote:Portland Plans To Tax Companies Who Pay CEOs 100 Times More Than Workers
Kelly Phillips Erb , FORBES STAFF
The Portland skyline is visible through trees on the east bank of the Willamette River in Portland, Ore., Wednesday, Dec. 3, 2014. (AP Photo/Don Ryan)
Are chief executive officers (CEOs) paid too much? Nearly 3 in 4 Americans believe that CEOs are paid too much compared to the average worker , according to a 2016 survey from the Rock Center for Corporate Governance at Stanford University. Most Americans believe that even as they underestimate how much CEOs are actually paid. Pay for a Fortune 500 CEO is ten times what the average American believes those CEOs earn : the typical American believes that a Fortune 500 CEO earns about $1.0 million per year even though median compensation is closer to $10.3 million.
One of the reasons that typical Americans can’t keep track of CEO compensation? While CEOs have historically been paid well, over the past few decades, pay for CEOs has grown much faster than all other workers. According to the Economic Policy Institute, in 1965, CEOs of large, public companies earned 20 times more than a typical worker; by 2014, that ratio hit 303.4 to 1. Put another way, from 1978 to 2014, inflation-adjusted CEO compensation increased 997% – nearly 1000% – while a typical employee’s compensation grew just 10.9% over the same period.
Steve Novick, a city commissioner in Portland, Oregon, believes that those levels of income inequality should be addressed. That’s why he spearheaded efforts in Portland to impose a surtax on companies whose chief executive officers earn more than 100 times the pay of their workers. Those efforts resulted in the first such tax in the country.
The tax works like this: companies who pay the city’s business license tax are subject to a 10% additional tax if CEO pay is greater than 100 times to the median pay of the company’s employees. If CEO pay is greater than 250 times the median pay of a company’s employees, the company will be subject to a 25% additional tax. In terms of dollars, that means if a company pays $100,000 in taxes, it will pay an additional $10,000 surtax if its CEO pay is greater than 100 times the median pay of the company’s employees or an additional $25,000 surtax if its CEO pay is greater than 250 times the median pay of the company’s employees.
To figure the surtax, the city will rely on compensation data found in Securities and Exchange Commission (SEC) reports. That data wasn’t previously widely available. However, under the Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law in 2010, public companies are required to report pay ratios of CEO-to-employees to the SEC beginning next year. That poses a potentially tricky problem: if President-elect Donald Trump successfully guts Dodd-Frank, as he’s said he will do, the data will not be available to figure the tax.
Assuming the data is available, the surtax could affect approximately 500 publicly traded companies who do business in the city, including Wells Fargo and Walmart, beginning in January 2018. The additional tax revenue is expected to bring in between $2.5 million to $3.5 million each year to the city’s general fund.
Novick, who introduced the new tax in Portland, is an environmental lawyer turned Portland City Commissioner. He says that he was inspired to pursue the measure after reading an article in 2014, describing a similar effort in the California State Senate. That effort, California SB 1372, would have reduced the corporate tax rate in California for a company with CEO pay weighing in less than 100 times the median pay of the company’s employees to 7% as an incentive to close the gap. The measure would have gradually increased the corporate tax rate based on the CEO-to-employee pay ratio, hitting 13% for those companies who pay their CEOs more than 400 times the median pay of the company’s employees. That effort failed by a 19-17 vote.
In Portland, however, the result was different. According to Novick, it wasn’t hard to get others on board with the idea. “The Mayor and Commissioner Fritz share my concern about income inequality,” he explained. “I also think the Mayor liked the idea of Portland being the first jurisdiction to adopt the concept. And the City faces a budget deficit next year, so Commissioner Fritz was happy to support additional revenue.”
Novick claims that 70% of Portlanders support the concept of the tax even though he says that it received little attention in the media. There was some vocal opposition, however. Ahead of the vote, the Portland Business Alliance testified before City Council that it opposed the ordinance “based on the lack of nexus between CEO pay and a company’s sales in Portland, inequities within the rule and the inability of this proposal to impact the stated goal of addressing income inequality.” Nonetheless, the measure passed in City Council by a vote of 3-1.
Novick lost his bid for re-election this year but remains optimistic that the tax will stay in place after he leaves office. He says that “the City faces a budget deficit next year, and I don’t think anyone will be excited about cutting police, fire, parks and housing more than they have to.”
There are, he points out, two Council members who were opposed to the measure: both are up for reelection in 2018. Each of them, he says, “has voted for numerous regressive taxes. If they vote to repeal a progressive tax, opponents could easily tar them as only wanting to tax the middle class.”
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