The Curtailing Executive Overcompensation (CEO) Act would impose a new federal excise tax on large corporations where chief executive officers earn significantly more than their median employees. The tax would apply to companies with at least $100 million in annual revenue and $10 million in total wages, and would be calculated as 1 percent of either a formula based on the CEO-to-median-worker pay ratio or 1 percent of the company's gross receipts, whichever is less. The tax only applies when a company's pay disparity ratio exceeds 50 to 1, meaning the CEO earns more than 50 times the median employee wage, and the bill includes inflation adjustments to these thresholds starting in 2028. The legislation would take effect for tax years beginning after its enactment and is designed to discourage extreme executive compensation relative to worker pay.
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