Portland proposes a special tax on companies where CEOs make 100X more than median employee

Environmental lawyer-turned-Portland City Commissioner Steve Novick has a cool use for the new SEC rules requiring companies to disclose executive pay starting in 2017: he's going to impose special taxes on businesses where the ratio of CEO pay to median worker pay exceeds 100:1 — an increase of 10% for 100:1 companies, and 25% for 250:1 companies.

A similar measure failed to pass in California in 2014. Novick was inspired in part by Thomas Piketty's magesterial Capital in the 21st Century, which traced the rise of income inequality using a painstakingly assembled data-set spanning 300 years.

He said that he was "95% confident" that he had the three votes needed to pass the measure through the five-person council.

"What I find quite interesting is that it seems [to be] the first tax that targets inequality as such," said Branko Milanović, a former lead economist at the World Bank and a professor at New York University who specializes in income inequality.

For Milanović, the idea was novel because "it treats inequality as having a negative externality like taxing carbon emissions".

Portland to vote on taxing companies if CEO earns 100 times more than staff
[Nicky Woolf/The Guardian]

(via Naked Capitalism)