Bill > HR5298

This bill, known as the "Tax Excessive CEO Pay Act of 2025", proposes to increase corporate tax rates for companies with high CEO-to-median-worker compensation ratios. Specifically, the bill would incrementally raise the corporate tax rate for companies where the highest-paid employee's compensation exceeds the median worker's compensation by more than 50 to 1. The tax increase is structured as a sliding scale: corporations with a pay ratio between 50-100 to 1 would face a 0.5 percentage point increase, while those with ratios over 500 to 1 would face a 5 percentage point increase. The bill applies to corporations with annual gross receipts of at least $100 million and requires companies to calculate their pay ratio using a 5-year average of compensation. Large corporations not already subject to SEC filing requirements would be required to calculate and report their pay ratio according to regulations prescribed by the Treasury Secretary. The purpose of the bill appears to be discouraging extreme income inequality within corporations by creating a financial disincentive for significant pay disparities. The tax rate changes would take effect for taxable years beginning after December 31, 2025, and the Treasury is directed to create regulations to prevent companies from manipulating their workforce composition to avoid the new tax provisions.

Budget and Finance

https://www.congress.gov/bill/119th-congress/house-bill/5298/all-info