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119-hr-5019119th CongressWALLET

CEO Accountability and Responsibility Act

Sponsored By: Representative DeSaulnier, Mark [D-CA-10]

Introduced

Summary

Ties public corporations' federal tax rate to their CEO-to-median-worker pay ratio. This bill would link the top corporate income tax rate to a company's pay gap and give federal contracting preference to firms with low pay ratios.

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  • Publicly traded corporations would see their top tax rate adjusted based on a calculated compensation ratio, with rate increases that range from +0.5 to +3.0 percentage points as the ratio rises. Companies must use SEC-reported CEO pay and median U.S. employee wages and file reports to the IRS.
  • If a company reduces U.S. full-time employees by more than 10% while increasing contracted or foreign full-time staff, the tax adjustment would be increased by 50%. New businesses count the prior year as zero for the workforce test.
  • For federal procurement, companies with a prior-year compensation ratio below 50-to-1 would receive a bidding preference when competing for contracts.

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Bill Overview

Analyzed Economic Effects

2 provisions identified: 1 benefits, 1 costs, 0 mixed.

Higher taxes for big CEO pay gaps

If enacted, publicly traded corporations would face a higher top corporate tax rate when their CEO-to-worker pay gap is large. The bill would add 0.5 to 3.0 percentage points to the top rate based on the company’s pay ratio, measured as the higher of CEO or top earner pay divided by the median U.S. worker’s pay from the prior year. If U.S. full-time staff falls by over 10% while contracted or foreign full-time staff rises, that year’s increase would be 50% larger. Affiliated companies would be counted together, and companies would need to report pay data to the IRS. These rules would apply to tax years that start after enactment.

Contract preference for fair pay ratios

If enacted, federal agencies would give a bid preference to companies with a CEO-to-worker pay ratio under 50-to-1 for the prior year. The ratio would use the same definition as the tax rule and would be measured for the calendar year before the contract year. This is a preference during evaluation, not a guarantee of an award. It would take effect upon enactment.

Sponsors & CoSponsors

Sponsor

DeSaulnier, Mark [D-CA-10]

CA • D

Cosponsors

  • Del. Norton, Eleanor Holmes [D-DC-At Large]

    DC • D

    Sponsored 10/10/2025

  • Rep. Goldman, Daniel S. [D-NY-10]

    NY • D

    Sponsored 11/7/2025

Roll Call Votes

No roll call votes available for this bill.

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