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- May 8, 2008
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Portland to raise taxes on companies where CEO earns 100 times what workers do - Business - CBC News
http://www.nytimes.com/2016/12/07/business/economy/portland-oregon-tax-executive-pay.htmlPortland, Ore., city council passed a law Wednesday that will charge businesses a higher tax rate if their chief executive officer gets paid more than 100 times what the average worker at the company does.
Normally, businesses in the city pay a tax of 2.2 per cent of their net income to city hall. But the new law will slap a higher rate on any publicly traded companies in the city if their executive compensation is wildly out of line with what workers at the company earn.
It'll be interesting to see if this sticks, has any effect, or whether businesses try new ways to get around the disclosure rules to make it moot. Certainly a tax hit in one city isn't going to hurt the large companies involved like Wells Fargo, etc, but if it takes off and other cities pass similar laws it could become meaningful.The tax will take effect next year, after the Securities and Exchange Commission begins to require public companies to calculate and disclose how their chief executives’ compensation compares with their workers’ median pay. The S.E.C. rule was required under the Dodd-Frank legislation enacted in 2010.
Portland’s executive-pay surcharge will be levied as a percentage of what a company owes on the city’s so-called business license tax, which has been in place since the 1970s. City officials estimated that the new tax would generate $2.5 million to $3.5 million a year for the city’s general fund, which pays for basic public services such as housing and police and firefighter salaries.