Bill · S. 2818· Senate(119-S-2818)
Tax Excessive CEO Pay Act of 2025
- Introduced
- 9/16/2025
- Last activity
- 9/16/2025 — Read twice and referred to the Committee on Finance.
- Sponsored by
- Bernie Sanders
- Cosponsors
- - 0 - 5
- Introduced
- In Committee
What this bill would do
This bill is known as the Tax Excessive CEO Pay Act of 2025. It changes the Internal Revenue Code of 1986 to increase corporate taxes on companies where the pay ratio of the CEO or highest paid employee to the median worker is greater than 50 to 1. The tax increase starts at 0.5 percentage points for ratios greater than 50 to 1 and goes up to 5 percentage points for ratios greater than 500 to 1. Private corporations with average annual gross receipts of less than $100,000,000 are exempt from this tax increase. The rules apply to taxable years beginning after December 31, 2025. The Secretary of the Treasury is directed to issue regulations to prevent companies from avoiding these rules, such as by switching to contractors instead of employees.
Yes· 3 of 13
Does this raise the taxes companies pay?+8
The bill increases corporate income tax rates for companies with high CEO-to-median-worker pay ratios exceeding 50 to 1.
Does this raise taxes on the highest earners?+6
Indirectly targets high-income executives and wealthy individuals by penalizing corporations for excessive executive compensation.
Would households on low incomes be better off under this?+5
Encourages companies to raise median worker pay or lower excessive executive compensation.
The opposite· 3 of 5
Would the very wealthiest people be better off under this?-6
Directly impacts top corporate executives and high earners through compensation-based tax penalties.
Would billionaires be better off under this?-6
Aims to curb excessive executive compensation tied to top corporate wealth.
Would people with substantial wealth be better off under this?-5
Targets ultra-high earners and corporate executives with increased corporate tax penalties.
Who it would affect, and how
Potential Positive Impacts for People
-
Section 2(a): This section imposes a tax rate increase on corporations with a pay ratio greater than 50 to 1, which might encourage companies to lower excessive executive pay or raise worker compensation to avoid the penalty.
-
Section 2(a): Smaller private corporations with average annual gross receipts of less than $100,000,000 are explicitly exempt from the tax increase under section 1(e)(1)(B)(ii)(II), protecting smaller businesses from this specific penalty.
Potential Negative Impacts for People
- Section 2(d): This provision instructs the Secretary of the Treasury to issue regulations to prevent workforce manipulation, such as using contractors rather than employees, which could potentially impact how workers are hired or classified by corporations attempting to comply with the law.
Groups and Interests Ranking
Every group the model scored this bill for, from -10 to +10. Hover a score for the reason it gave.
- Economy And Finance
- Increases Corporate Taxes+8Increases Wealthy Taxes+6Improves Small Business Support+4Improves Fiscal Responsibility+2Reduces National Debt+2Improves Economic Growth+1
- Demographic And Interest Groups
- Good For Low Income Households+5Good For Middle Class Households+4Good For Union Workers+3Good For Young Adults+2Good For Billionaires-6Good For Ultra High Net Worth Individuals-6Good For High Net Worth Individuals-5Good For High Income Households-4Good For Business Owners-2
- Governance And Ideology
- Improves Government Transparency+4Increases Federal Power+3
- Social Issues And Justice
- Improves Poverty Reduction+3
- 10/3/2025
- 1 Cosponsor added.
- 9/16/2025
- Read twice and referred to the Committee on Finance.
- 4 Cosponsors added.
- Introduced in Senate
One bill Congress.gov lists as related to this one — companions in the other chamber, earlier versions, and bills this one absorbed or was folded into.
Edward MarkeyDemocrat · Massachusetts
Jeff MerkleyDemocrat · Oregon
Chris Van HollenDemocrat · Maryland
Peter WelchDemocrat · Vermont
Elizabeth WarrenDemocrat · Massachusetts