California Senate Rejects Bill Linking Corporate Tax Rate to Pay Ratio
May 29, 2014
This week, the California state Senate voted 19-17 to reject legislation that would have imposed higher corporate income taxes in the state for any company having a ratio of CEO to other employee pay of over 100 to 1. The bill, SB 1372, introduced by Democrats Mark DeSaulnier (D-Concord) and Loni Hancock (D-Oakland) would have replaced the current 8.84% corporate income tax with a sliding scale tax that would reduce corporate income taxes to companies having a ratio of 25:1, but increase taxes to 13 percent for companies with a ratio of 400:1 or higher. Four Senators did not vote, but the result likely kills the bill for the year. Legislation tying executive compensation to taxes or other government benefits has also been introduced in Rhode Island.