Title: Equity in Compensation Act
Policy area: Taxation

Summary:
Equity in Compensation Act
This bill imposes an additional tax on the income of corporations that have gross revenues in excess of $1 billion and a wage disparity level in excess of 3,000%. A "wage disparity level" is defined as the ratio of the annual salary of the highest compensated officer of the corporation to the median annual salary of all employees of the corporation.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 2312 Introduced in Senate (IS)]

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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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Equity in Compensation Act''.

SEC. 2. SURTAX ON CORPORATIONS WITH SIGNIFICANT DISPARITY IN EMPLOYEE 
              WAGES.

    (a) In General.--Part II of subchapter A of chapter 1 of the 
Internal Revenue Code of 1986 is amended by redesignating section 12 as 
section 13 and by inserting after section 11 the following new section:

``SEC. 12. SURTAX ON CORPORATIONS WITH SIGNIFICANT DISPARITY IN 
              EMPLOYEE WAGES.

    ``(a) In General.--In the case of an applicable corporation, there 
is hereby imposed (in addition to any other tax imposed by this 
subtitle) a tax equal to the applicable percentage of taxable income.
    ``(b) Applicable Corporation.--For purposes of this section, the 
term `applicable corporation' means any corporation which--
            ``(1) has gross revenue for the taxable year in excess of 
        $1,000,000,000, and
            ``(2) has a wage disparity level in excess of 3,000 
        percent.
    ``(c) Applicable Percentage.--For purpose of this section, the 
applicable percentage shall be determined as follows:


------------------------------------------------------------------------
                                                                 The
   ``In the case of an applicable corporation with a wage     applicable
                 disparity level that is--                    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.
------------------------------------------------------------------------

    ``(d) Wage Disparity Level.--For purposes of this section--
            ``(1) In general.--The term `wage disparity level' means 
        the ratio (expressed as a percentage) of the annual salary of 
        highest compensated officer of the corporation to the median 
        annual salary of all employees of the corporation.
            ``(2) Determination of annual salary.--The annual salary of 
        any officer or employee shall be determined by taking into 
        account the wages (within the meaning of section 3121(a), but 
        determined without regard to any dollar limitation contained in 
        such section) paid to such officer or employee for services 
        performed during the taxable year. In the case of any officer 
        or employee who is not employed for the entire taxable year, 
        the wages paid for such taxable year shall be increased by an 
        amount equal to the product of the average daily wages paid to 
        such employees for the number of days during the taxable year 
        during which such employee was employed and the number of days 
        during the taxable year during which such employee was not so 
        employed.
    ``(e) Exceptions; Treatment of Foreign Corporations.--Rules similar 
to the rules of subsections (c) and (d) of section 11 shall apply for 
purposes of this section.''.
    (b) Clerical Amendment.--The table of sections for part II of 
subchapter A of chapter 1 of such Code is amended by redesignating the 
item relating to section 12 as relating to section 13 and by inserting 
after the item relating to section 11 the following new item:

``Sec. 12. Surtax on corporations with significant disparity in 
                            employee wages.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2019.
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