Sponsors (6)
The bill discourages extreme CEO pay and strengthens tax fairness by imposing an excise tax and denying deductions for taxed amounts, but it risks higher consumer prices or lower wages/returns and increases compliance costs for businesses and the IRS.
Taxpayers and workers: corporations would face an excise tax on excessive CEO-to-worker pay ratios, creating a financial disincentive that may reduce extreme CEO pay gaps.
Taxpayers and financial institutions: the bill disallows deductions for amounts subject to the excise tax, preventing a double tax benefit and increasing tax fairness and integrity of the tax code.
Workers, customers, and shareholders: companies may pass the cost of the excise tax on through lower wages, higher prices, or reduced returns, directly affecting household incomes and consumer prices.
Employees, retirees, and investors: making certain corporate expenses nondeductible could raise corporate tax liability and lead firms to cut pensions, benefits, or investment, with downstream impacts on jobs and retirement incomes.
Businesses, taxpayers, and the IRS: measuring pay ratios and collecting the excise tax would raise compliance and administrative costs for companies and the IRS, increasing regulatory burden and enforcement expense.
Based on analysis of 2 sections of legislative text.
Imposes an excise tax on excessive CEO-to-worker pay ratios and disallows related deductions for taxable years after enactment.
Imposes a new federal excise tax on excessive CEO-to-worker pay disparities and makes related compensation amounts nondeductible for tax purposes. The bill adds a new chapter to the Internal Revenue Code and changes deduction rules so corporations cannot deduct amounts tied to the excise tax. Changes apply to taxable years beginning after the date of enactment and update Subtitle D's table of chapters. No other programmatic or spending provisions are included in the two-section bill.
Official title: Amend the Internal Revenue Code of 1986 to impose an excise tax on excessively disparate wages paid to chief executive officers.
Introduced July 16, 2026 by Sheldon Whitehouse · Last progress July 16, 2026