Bills · HR 5298
IN COMMITTEE· 119TH CONGRESS
House BillHR 5298Taxation
Tax Excessive CEO Pay Act of 2025
INTRO SEP 11· LAST ACTION SEP 11
READING
4MIN
COSPONSORS
29
READER REACTIONS0 TOTAL
NO VOTES YET · BE THE FIRST
- Introduced only
LEGISLATIVE PROGRESS
STEP 2 / 8Introduced
In Committee
Reported
Passed House
Passed Senate
Conference
To President
Became Law
WHAT THE BILL DOES
AI-writtenThis bill addresses public concerns about income inequality and what some perceive as excessive executive compensation compared to average worker pay. If passed, it would create a direct financial incentive for companies to reduce the gap between their top earners and their median workers, or else pay a higher tax rate. This could lead to companies re-evaluating their pay structures, potentially raising worker wages or adjusting executive compensation.
Voters might care because it ties corporate tax policy to social issues of fairness and economic distribution. If it becomes law, it could lead to increased tax revenue for the government and potentially shift how companies allocate their compensation budgets. If it doesn't pass, current corporate pay practices and tax structures would remain unchanged, and the debate over executive compensation and income inequality would likely continue without this specific legislative intervention.
KEY PROVISIONS
5AI-extractedPROVISION 01
Imposes an increased corporate tax rate on companies whose highest-paid employee earns more than 50 times the median worker's compensation.
This directly links corporate tax liability to a company's executive-to-worker pay ratio, creating a financial incentive to narrow the pay gap.
PROVISION 02
The 'pay ratio' is calculated using a 5-year annualized average of compensation, and if the highest-paid employee is not the CEO, their compensation is used for the ratio.
This provision clarifies how the pay gap is measured, ensuring a consistent and potentially more stable metric over time, and captures the highest earner even if they don't hold the CEO title.
PROVISION 03
Exempts private corporations with average annual gross receipts less than $100 million from the tax increase.
This ensures the tax only applies to larger companies, reducing the regulatory burden on smaller businesses.
PROVISION 04
Establishes a graduated penalty, increasing the corporate tax rate by 0.5 percentage points for ratios between 50:1 and 100:1, up to 5 percentage points for ratios above 500:1.
The tax increase scales with the severity of the pay gap, making companies with the largest disparities face the highest penalties.
PROVISION 05
Authorizes the Secretary of the Treasury to issue regulations to prevent companies from avoiding the tax increase, including by manipulating the workforce (e.g., using contractors instead of employees).
This aims to close potential loopholes and ensure the spirit of the law is upheld, preventing companies from simply reclassifying workers to lower their reported median compensation.
SPONSORSHIP
1 + 29
D· Michigan
YRS IN OFFICE
7
BILLS LED
48
COSPONSOR BREAKDOWNBIPARTISAN · 0%
DEM 29 REP 0 IND 0
ACTION TIMELINE
3 EVENTSSEP 11
Referred to the House Committee on Ways and Means.
SEP 10
Sponsor introductory remarks on measure. (CR H4168-4169)
SEP 10
Introduced in House
BILL INFO
TypeHouse Bill
NumberHR 5298
Congress119th
StatusIn Committee
IntroducedSep 11, 2025
Last actionSep 11, 2025
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IN COMMITTEE· 119TH CONGRESS · WAYS AND MEANS COMMITTEE · INTRODUCED SEP 11, 2025
House BillHR 5298Taxation
Tax Excessive CEO Pay Act of 2025
INTRODUCED SEP 11, 2025· LAST ACTION SEP 11, 2025
PASSAGE CHANCES
—%
READING
4 min
COSPONSORS
29
COMPLEXITY
Moderate
