Tax Excessive CEO Pay Act of 2025
Sponsored By: Representative Rep. Tlaib, Rashida [D-MI-12]
Introduced
Summary
Penalizes corporations with high CEO-to-worker pay ratios by raising the federal corporate tax rate when the ratio exceeds 50 to 1. The bill sets step‑up tax penalties tied to how large the pay gap is and adds rules for measuring and reporting that ratio.
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Bill Overview
Analyzed Economic Effects
3 provisions identified: 0 benefits, 2 costs, 1 mixed.
Higher corporate taxes for big pay gaps
If enacted, corporations with a CEO-to-worker pay ratio over 50:1 would pay a higher tax rate. The 21% rate would rise by: 0.5 points for >50–100:1; 1 point for >100–200:1; 2 points for >200–300:1; 3 points for >300–400:1; 4 points for >400–500:1; and 5 points for >500:1. Private companies not covered by SEC rules would be exempt if their three-year average receipts are under $100,000,000. Private companies at $100,000,000 or more would need to compute and report a pay ratio. These rules would first apply to tax years beginning after December 31, 2025.
Five-year average to measure pay ratio
If enacted, the pay ratio would be measured using a five-year average of pay. If the highest-paid worker is not the CEO, the ratio would use that person’s pay. These rules could change whether a company crosses the 50:1 threshold for the surcharge.
Anti-avoidance rules and start date
If enacted, Treasury would write rules to stop companies from dodging the pay-ratio tax. Rules could address shifting workers to contractors or changing workforce mix to lower the ratio. The changes would apply to tax years starting after December 31, 2025. The bill would also update code cross-references so other tax rules use the post-surcharge corporate rate.
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Sponsors & CoSponsors
Sponsor
Rep. Tlaib, Rashida [D-MI-12]
MI • D
Cosponsors
Pallone
NJ • D
Sponsored 9/11/2025
Rep. Lee, Summer L. [D-PA-12]
PA • D
Sponsored 9/11/2025
Jackson (IL)
IL • D
Sponsored 9/11/2025
Randall
WA • D
Sponsored 9/11/2025
Mfume
MD • D
Sponsored 9/11/2025
Casar
TX • D
Sponsored 9/15/2025
Del. Norton, Eleanor Holmes [D-DC-At Large]
DC • D
Sponsored 9/15/2025
Thanedar
MI • D
Sponsored 10/3/2025
Brownley
CA • D
Sponsored 10/8/2025
Pingree
ME • D
Sponsored 9/11/2025
Huffman
CA • D
Sponsored 9/11/2025
Ramirez
IL • D
Sponsored 9/11/2025
McGovern
MA • D
Sponsored 9/11/2025
Omar
MN • D
Sponsored 9/11/2025
Khanna
CA • D
Sponsored 9/11/2025
Meng
NY • D
Sponsored 9/11/2025
Simon
CA • D
Sponsored 9/11/2025
Garcia (IL)
IL • D
Sponsored 9/11/2025
Rep. Jayapal, Pramila [D-WA-7]
WA • D
Sponsored 9/11/2025
Deluzio
PA • D
Sponsored 9/11/2025
Watson Coleman
NJ • D
Sponsored 9/11/2025
Clarke (NY)
NY • D
Sponsored 9/11/2025
Balint
VT • D
Sponsored 9/11/2025
Pressley
MA • D
Sponsored 9/11/2025
Cohen
TN • D
Sponsored 10/21/2025
Goldman (NY)
NY • D
Sponsored 12/3/2025
Rep. Foushee, Valerie P. [D-NC-4]
NC • D
Sponsored 12/18/2025
Dexter
OR • D
Sponsored 4/14/2026
Roll Call Votes
No roll call votes available for this bill.
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