II 

116TH CONGRESS 

1ST SESSION S. 2312 

To amend the Internal Revenue Code of 1986 to impose a surtax on 

corporations with significant disparities in employee wages. 

IN THE SENATE OF THE UNITED STATES 

JULY 30, 2019 

Mr. MERKLEY introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to impose 

a surtax on corporations with significant disparities in 

employee wages. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Equity in Compensa5 tion Act’’. 

6 SEC. 2. SURTAX ON CORPORATIONS WITH SIGNIFICANT 

7 DISPARITY IN EMPLOYEE WAGES. 

8 (a) IN GENERAL.—Part II of subchapter A of chap9 ter 1 of the Internal Revenue Code of 1986 is amended 


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•S 2312 IS

1 by redesignating section 12 as section 13 and by inserting 

2 after section 11 the following new section: 

3 ‘‘SEC. 12. SURTAX ON CORPORATIONS WITH SIGNIFICANT 

4 DISPARITY IN EMPLOYEE WAGES. 

5 ‘‘(a) IN GENERAL.—In the case of an applicable cor6 poration, there is hereby imposed (in addition to any other 

7 tax imposed by this subtitle) a tax equal to the applicable 

8 percentage of taxable income. 

9 ‘‘(b) APPLICABLE CORPORATION.—For purposes of 

10 this section, the term ‘applicable corporation’ means any 

11 corporation which— 

12 ‘‘(1) has gross revenue for the taxable year in 

13 excess of $1,000,000,000, and 

14 ‘‘(2) has a wage disparity level in excess of 

15 3,000 percent. 

16 ‘‘(c) APPLICABLE PERCENTAGE.—For purpose of 

17 this section, the applicable percentage shall be determined 

18 as follows: 

‘‘In the case of an applicable corporation with a wage disparity 

level that is— 

The applicable 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. 

19 ‘‘(d) WAGE DISPARITY LEVEL.—For purposes of this 

20 section— 


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1 ‘‘(1) IN GENERAL.—The term ‘wage disparity 

2 level’ means the ratio (expressed as a percentage) of 

3 the annual salary of highest compensated officer of 

4 the corporation to the median annual salary of all 

5 employees of the corporation. 

6 ‘‘(2) DETERMINATION OF ANNUAL SALARY.— 

7 The annual salary of any officer or employee shall 

8 be determined by taking into account the wages 

9 (within the meaning of section 3121(a), but deter10 mined without regard to any dollar limitation con11 tained in such section) paid to such officer or em12 ployee for services performed during the taxable 

13 year. In the case of any officer or employee who is 

14 not employed for the entire taxable year, the wages 

15 paid for such taxable year shall be increased by an 

16 amount equal to the product of the average daily 

17 wages paid to such employees for the number of 

18 days during the taxable year during which such em19 ployee was employed and the number of days during 

20 the taxable year during which such employee was 

21 not so employed. 

22 ‘‘(e) EXCEPTIONS; TREATMENT OF FOREIGN COR23 PORATIONS.—Rules similar to the rules of subsections (c) 

24 and (d) of section 11 shall apply for purposes of this sec25 tion.’’. 


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•S 2312 IS

1 (b) CLERICAL AMENDMENT.—The table of sections 

2 for part II of subchapter A of chapter 1 of such Code 

3 is amended by redesignating the item relating to section 

4 12 as relating to section 13 and by inserting after the item 

5 relating to section 11 the following new item: 

‘‘Sec. 12. Surtax on corporations with significant disparity in employee wages.’’. 

6 (c) EFFECTIVE DATE.—The amendments made by 

7 this section shall apply to taxable years beginning after 

8 December 31, 2019. 

Æ 


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