Legislature Finding More Ways to Drive Companies from State

Members of the CA Legislature think that some company CEOs make too much money and want to punish them for being successful. Here are some detailes from the Mercury News.

SACRAMENTO — Noting that America’s middle class has lost its distinction as the wealthiest in the world, two Bay Area lawmakers say they’re attacking income inequality with legislation that would link a company’s tax rate to the gap between executive pay and average employee wages.

It would be the first law of its kind in the nation at a time when the growing plight of the middle class is becoming a major issue in this year’s midterm elections.

Three decades ago, chief executives made a little more than 40 times as much money as an average worker. Now, CEOs of elite companies like Silicon Valley’s eBay and Oracle earn average compensation that’s more than 350 times greater than what middle-class workers earn.


Under SB1372, if the CEO of a publicly traded company doing business in California makes more than 100 times the pay of an average employee, that company’s tax rate will go up from 8.8 percent to as high as 13 percent. Companies with relatively little disparity will get a tax break, according to the bill, sponsored by Sens. Mark DeSaulnier, D-Concord, and Loni Hancock, D-Berkeley.

What greater incentive could the Legislature come up with to drive companies from the State — setting CEO salaries? More liberal tinkering with the free market system that will damage the states economy.  When will they ever learn?

About Russ Steele

Freelance writer and climate change blogger. Russ spent twenty years in the Air Force as a navigator specializing in electronics warfare and digital systems. After his service he was employed for sixteen years as concept developer for TRW, an aerospace and automotive company, and then was CEO of a non-profit Internet provider for 18 months. Russ's articles have appeared in Comstock's Business, Capitol Journal, Trailer Life, Monitoring Times, and Idaho Magazine.
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4 Responses to Legislature Finding More Ways to Drive Companies from State

    • Russ Steele says:

      Interesting, bastions of liberalism screwing their workers. I thought it was only corporations and wealthy conservatives that did that, not kind hearted liberals. But, life does teach hard lessons regardless of the mushy socialist crap they are teaching in the class room.


  1. Sean says:

    There are so many ways a system like this can be gamed. Imagine a company that had a large number of low wage people doing manual labor at $10 – $12 an hour. It would not take long to realize you could transfer all that work to a subcontractor. How much of the low end could be subcontracted that way so it looks like you company pays pretty well when in fact most of employees are virtual? It’s kind of like private pension legislation a little more than a decade ago. Government regulators made a lot of heavy handed rules for defined benefit pension plants to guarantee they would be fully funded when employees retired. The upshot was to accelerate the end of defined benefit plas and replace them with 401K plans where all the liability and risk now rests with the employees.


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