Referred to the Committee on Ways and Means, and in addition to the Committee on Oversight and Government Reform, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
The CEO Accountability and Responsibility Act adjusts federal income tax rates for publicly traded corporations based on the pay ratio between their highest-paid employee and median worker compensation. Companies with wider pay gaps face higher tax rates—ranging from a 0.5 percentage point increase for ratios between 100-to-1 and 150-to-1, up to a 3 percentage point increase for ratios exceeding 400-to-1. The bill also includes a penalty that increases these tax adjustments by 50 percent if a company cuts U.S. jobs by more than 10 percent while simultaneously increasing contracted or foreign workers. Additionally, the legislation gives federal contracting preference to companies with pay ratios below 50-to-1. The tax changes take effect for tax years beginning after the bill's enactment, with companies required to report compensation data annually to the Internal Revenue Service.
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