Large corporations could owe more federal tax if top pay is more than 50 times typical worker pay. The bigger the gap, the bigger the tax increase, up to 5 extra percentage points.
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Tax Excessive CEO Pay Act of 2025 is a House bill in committee. The latest recorded action: Referred to the House Committee on Ways and Means.
Latest action on H.R. 5298: Referred to the House Committee on Ways and Means.
Who this affects: This bill mainly affects large corporations with very high top-to-worker pay gaps. Public companies would use pay-ratio reporting they already provide to the Securities and Exchange Commission, the federal agency that oversees public company disclosures. Large private companies would face new reporting if they meet the $100 million receipts test. Corporate boards, executives, investors, workers, labor groups, and tax officials could all feel the effects in different ways.
Why this matters: This bill matters because it would attach a tax cost to very large gaps between top pay and typical worker pay. Companies over the 50-to-1 line could face lower after-tax profits unless they change pay practices. The bill may affect executive pay, worker pay, staffing choices, or prices, but the exact effects would depend on how companies respond. It also gives tax officials new work because they must define reporting rules and stop avoidance.
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