CEO Accountability and Responsibility Act
Summary
The "CEO Accountability and Responsibility Act" aims to amend the Internal Revenue Code of 1986 by adjusting the corporate income tax rate based on the ratio of CEO compensation to median employee compensation. It also introduces a contracting preference for entities with lower pay ratios. The bill seeks to incentivize companies to reduce the disparity between executive and employee pay.
Expected Effects
The bill would likely lead to changes in corporate compensation strategies. Some companies may choose to reduce executive compensation or increase median employee pay to lower their tax rate. The contracting preference could shift government contracts towards companies with lower pay ratios.
Potential Benefits
- Potentially reduces income inequality by incentivizing fairer pay distribution.
- May encourage companies to invest more in their workforce.
- Could lead to increased government revenue from corporations with high pay ratios.
- The contracting preference could support companies with more equitable pay structures.
- Increased transparency in corporate compensation practices.
Most Benefited Areas:
Potential Disadvantages
- May lead to companies artificially manipulating compensation ratios to avoid higher taxes.
- Could create unintended consequences for executive recruitment and retention.
- Increased complexity in tax code and potential for compliance challenges.
- May disproportionately affect certain industries or business models.
- Potential for companies to outsource jobs to lower the median employee compensation.
Most Disadvantaged Areas:
Constitutional Alignment
The bill's alignment with the Constitution is primarily based on Congress's power to tax and regulate commerce. Article I, Section 8 grants Congress the power to lay and collect taxes, duties, imposts, and excises. The bill uses this power to influence corporate behavior regarding compensation.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).