I 
117TH CONGRESS 
1ST SESSION H. R. 1979 
To amend the Internal Revenue Code of 1986 to impose a corporate tax 
rate increase on companies whose ratio of compensation of the CEO 
or other highest paid employee to median worker compensation is more 
than 50 to 1, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 17, 2021 
Ms. LEE of California (for herself, Ms. TLAIB, Ms. SCHAKOWSKY, Ms. NOR-
TON, Mrs. WATSON COLEMAN, Mr. JONES, Mr. KHANNA, Mr. GARCI´A of 
Illinois, Ms. PRESSLEY, Mr. TAKANO, Ms. OCASIO-CORTEZ, Mr. 
ESPAILLAT, Mr. MCGOVERN, Mr. HASTINGS, Mr. LYNCH, Ms. OMAR, Ms. 
JAYAPAL, Ms. BUSH, Mr. HUFFMAN, and Mr. GRIJALVA) introduced the 
following bill; which was referred to the Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to impose 
a corporate tax rate increase on companies whose ratio 
of compensation of the CEO or other highest paid em-
ployee to median worker compensation is more than 50 
to 1, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Tax Excessive CEO 
Pay Act of 2021’’. 
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SEC. 2. CORPORATE TAX INCREASE BASED ON COMPENSA-
TION RATIO. 
(a) IN GENERAL.—Section 11 of the Internal Rev-
enue Code of 1986 is amended by adding at the end the 
following new subsection: 
‘‘(e) TAX INCREASE BASED ON PAY RATIO.— 
‘‘(1) IN GENERAL.— 
‘‘(A) INCREASE IMPOSED.—In the case of 
any corporation (except as provided in subpara-
graph (B)(ii)(II)) the pay ratio of which is 
greater than 50 to 1 for a taxable year, the 21- 
percent rate under subsection (b) for such tax-
able year shall be increased by the penalty de-
termined under paragraph (2). 
‘‘(B) PAY
RATIO.—For purposes of this 
subsection— 
‘‘(i) IN
GENERAL.—The term ‘pay 
ratio’ means the ratio described in section 
229.402(u)(1)(iii) of title 17, Code of Fed-
eral Regulations (or any successor there-
to), except that if the highest compensated 
employee of the corporation is not the 
principal executive officer, the ratio shall 
be determined based on the compensation 
of such highest compensated employee. 
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‘‘(ii) CORPORATIONS NOT SUBJECT TO 
SEC FILING.—In the case of a corporation 
which (without regard to this clause) is not 
subject to the authorities described in sec-
tion 229.10(a) of title 17, Code of Federal 
Regulations (or any successor thereto)— 
‘‘(I) LARGE
CORPORATIONS.—If 
the average annual gross receipts of 
such corporation for the 3-taxable- 
year period ending with the taxable 
year which precedes such taxable year 
are at least $100,000,000, such cor-
poration shall calculate and report its 
pay ratio according to the method 
which the Secretary shall prescribe by 
regulations consistent with the regula-
tion described in clause (i). 
‘‘(II) OTHER PRIVATE CORPORA-
TIONS
EXEMPT.—Subparagraph (A) 
shall not apply to any such corpora-
tion if the average annual gross re-
ceipts of such corporation for the 3- 
taxable-year period ending with the 
taxable year which precedes such tax-
able year are less than $100,000,000. 
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‘‘(2) AMOUNT OF PENALTY.—The penalty de-
termined under this paragraph is an increase, ex-
pressed in percentage points, determined in accord-
ance with the following table: 
‘‘If the pay ratio is: 
The increase is: 
Greater than 50 to 1, but not greater than 100 to 1 .................
0.5
Greater than 100 to 1, but not greater than 200 to 1 ...............
Greater than 200 to 1, but not greater than 300 to 1 ...............
Greater than 300 to 1, but not greater than 400 to 1 ...............
Greater than 400 to 1, but not greater than 500 to 1 ...............
Greater than 500 to 1 .................................................................
5.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) The following sections of the Internal Rev-
enue Code of 1986 are each amended by inserting 
‘‘applicable to the corporation (after the application 
of section 11(e))’’ after ‘‘section 11(b)’’: 
(A) Section 280C(c)(3)(B)(ii)(II). 
(B) Paragraphs (2)(B) and (6)(A)(ii) of 
section 860E(e). 
(C) Section 7874(e)(1)(B). 
(2) Section 852(b)(3)(A) of such Code is 
amended by inserting ‘‘(after the application of sec-
tion 11(e))’’ after ‘‘section 11(b)’’. 
(3) 
Paragraphs 
(1) 
and 
(2) 
of 
section 
1445(e)(1) of such Code are each amended by strik-
ing ‘‘in effect for the taxable year under section 
11(b)’’ and inserting ‘‘applicable to such corporation 
under section 11 for the taxable year’’. 
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(4) Section 1446(b)(2)(B) of such Code is 
amended by striking ‘‘specified in section 11(b)’’ and 
inserting ‘‘applicable to such corporation under sec-
tion 11 for the taxable year’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2021. 
(d) REGULATIONS.—The Secretary of the Treasury 
(or the Secretary’s delegate) shall issue regulations as nec-
essary to prevent avoidance of the purposes of the amend-
ments made by subsection (a), including regulations to 
prevent the manipulation of the compensation ratio under 
section 11(e) of the Internal Revenue Code of 1986 by 
changes to the composition of the workforce (including by 
using the services of contractors rather than employees). 
Æ 
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