What does Preamble of Tax Excessive CEO Pay Act of 2025 do?

This bill proposes to amend the Internal Revenue Code of 1986. It aims to impose a corporate tax rate increase. The tax increase would apply to companies with a CEO-to-median worker compensation ratio exceeding 50 to 1.

What does SHORT TITLE. of Tax Excessive CEO Pay Act of 2025 do?

This bill is formally titled the Tax Excessive CEO Pay Act of 2025.

What does CORPORATE TAX INCREASE BASED ON COMPENSATION RATIO. of Tax Excessive CEO Pay Act of 2025 do?

This section amends Section 11 of the Internal Revenue Code of 1986 to impose a penalty on corporations with a pay ratio exceeding 50 to 1. The pay ratio is defined as the ratio described in 17 CFR 229.402(u)(1)(iii), using the annualized average of compensation amounts over a five-year period. The penalty increases the 21 percent rate under subsection (b) of Section 11, with the increase varying based on the pay ratio (0.5 to 5 percentage points). Corporations not subject to certain SEC filing requirements must meet a gross receipts threshold of $100,000,000 to be subject to the pay ratio calculation and reporting requirements. The amendments apply to taxable years beginning after December 31, 2025. The Secretary of the Treasury is required to issue regulations to prevent avoidance of the purposes of these amendments, including manipulation of the compensation ratio.

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Tax Excessive CEO Pay Act of 2025

Last updated: 9/11/2025 · Introduced: 9/11/2025

Author: Rashida Tlaib (D-MI)

TL;DR (AI)

This bill increases the corporate tax rate for companies where the CEO's compensation is 50 or more times greater than the median worker's compensation.
The tax increase ranges from 0.5 to 5 percentage points, depending on the CEO-to-worker pay ratio.
Companies with gross receipts exceeding $100,000,000 are subject to the pay ratio calculation and reporting requirements.

119th Congressin committeeOfficial page

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Other Sections

Includes provisions on preamble, short title., and 1 more.

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