[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6191 Introduced in House (IH)]
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118th CONGRESS
1st Session
H. R. 6191
To amend the Internal Revenue Code of 1986 to impose an excise tax on
excessively disparate wages paid to chief executive officers.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
November 2, 2023
Ms. Lee of California (for herself, Ms. Ocasio-Cortez, Mr. Frost, Ms.
Norton, Ms. Tlaib, Ms. Jackson Lee, Ms. Jayapal, and Mr. Bowman)
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 an excise tax on
excessively disparate wages paid to chief executive officers.
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 ``Curtailing Executive
Overcompensation (CEO) Act''.
SEC. 2. EXCISE TAX ON EXCESSIVE CHIEF EXECUTIVE OFFICER PAY DISPARITY.
(a) In General.--Subtitle D of the Internal Revenue Code of 1986 is
amended by adding at the end the following new chapter:
``CHAPTER 50B--PAY DISPARITY
``Sec. 5000E. Excessive pay disparity.
``SEC. 5000E. EXCESSIVE PAY DISPARITY.
``(a) In General.--In the case of any employer which is an
applicable employer for the calendar year, there is hereby imposed a
tax equal to the lesser of--
``(1) 1 percent of the product of--
``(A) the pay disparity factor of the applicable
employer for the calendar year, and
``(B) the excess of--
``(i) amount determined under subsection
(c)(2)(A) for such calendar year, over
``(ii) 5,000 percent of the amount
determined under subsection (c)(2)(B) for such
calendar year, or
``(2) 1 percent of the gross receipts (within the meaning
of section 448(c)) of such applicable employer.
``(b) Applicable Employer.--
``(1) In general.--For purposes of this section, the term
`applicable employer' means, with respect to any calendar year,
any employer which--
``(A) has not less than $100,000,000 in gross
receipts (within the meaning of section 448(c)) for
each of the 3 calendar years preceding such calendar
year, and
``(B) has paid wages in excess of $10,000,000 for
each calendar year in the 3-calendar-year period taken
into account under subparagraph (A).
``(2) Aggregation rule.--For purposes of this section, the
rules of subsection (a) and (b) of section 52 shall apply.
``(3) Predecessors.--For purposes of paragraph (1)(A),
rules similar to the rules of section 448(c)(3)(D) shall apply.
``(4) Inflation adjustment.--
``(A) In general.--In the case of any calendar year
after 2024, the $100,000,000 amount under paragraph
(1)(A) and the $10,000,000 amount under paragraph
(1)(B) shall each be increased by an amount equal to--
``(i) such dollar amount, multiplied by
``(ii) the cost-of-living adjustment
determined under section 1(f)(3) for such
calendar year, determined by substituting
`calendar year 2023' for `calendar year 2016'
in subparagraph (A)(ii) thereof.
``(B) Rounding.--The amount of any increase under
clause (i) shall be rounded to the nearest multiple of
$100,000.
``(c) Pay Disparity Factor.--For purposes of this section--
``(1) In general.--The term `pay disparity factor' means,
with respect to any applicable employer for calendar year, the
excess (if any) of--
``(A) the pay disparity ratio of such employer for
such calendar year, over
``(B) 50.
``(2) Pay disparity ratio.--The term `pay disparity ratio'
means, with respect to any applicable employer for calendar
year, the ratio of--
``(A) the average qualified wages for the 5-
calendar year period ending with such calendar year of
the individual who is the highest compensated employee
of the applicable employer for such calendar year, to
``(B) the median wages paid to all applicable
employees of the applicable employer for such calendar
year.
``(3) Wages; qualified wages.--
``(A) Wages.--The term `wages' has the meaning
given such term under section 3401(a), determined
without regard to paragraph (8) thereof.
``(B) Qualified wages.--
``(i) In general.--The term `qualified
wages' means wages increased by--
``(I) any elective deferrals
(within the meaning of section
402(g)(3)) not included in wages, and
``(II) any amounts described in
section 415(c)(3)(D)(ii) which are not
included in wages.
``(ii) Self-employed individuals and owner-
employees.--In the case of an employee (within
the meaning of section 401(c)(1)), the term
`qualified wages' includes the earned income
(as defined in section 401(c)(2) of such
employee, but determined without regard to any
exclusion under section 911) of such employee.
``(4) Applicable employee.--For purposes of this
subsection--
``(A) In general.--The term `applicable employee'
means any individual whose wages in connection with
services performed for the applicable employer for the
calendar year are equal to or more than $5,000.
``(B) Inflation adjustment.--
``(i) In general.--In the case of any
calendar year after 2024, the $5,000 amount
under subparagraph (A)(ii) shall be increased
by an amount equal to--
``(I) such dollar amount,
multiplied by
``(II) the cost-of-living
adjustment determined under section
1(f)(3) for such calendar year,
determined by substituting `calendar
year 2023' for `calendar year 2016' in
subparagraph (A)(ii) thereof.
``(ii) Rounding.--The amount of any
increase under clause (i) shall be rounded to
the nearest multiple of $100.
``(d) Joint and Several Liability.--If more than one taxpayer is
treated as a single employer under this section by reason of subsection
(b)(2), then each such taxpayer shall be jointly and severally liable
for the tax imposed by subsection (a).
``(e) Regulations.--The Secretary shall issue regulations as
necessary to prevent avoidance of the purposes of this section,
including regulations to prevent the manipulation of the pay disparity
factor by changes to the composition of the workforce (including by
using the services of contractors rather than employees).''.
(b) No Deduction From Income Taxes.--Section 275(a)(6) of the
Internal Revenue Code of is amended by inserting ``50B,'' after
``50A,''.
(c) Clerical Amendment.--The table of chapters for subtitle D of
the Internal Revenue Code of 1986 is amended by adding at the end the
following new item:
``Chapter 50B--Pay Disparity''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
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