Portland City Council discusses CEO surtax proposal - KPTV - FOX 12

Portland City Council discusses CEO surtax proposal

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PORTLAND, OR (KPTV) -

A new tax could be coming to some Portland businesses whose CEO's make at least 100 times the median income of their employees.

On Wednesday, a hearing on the new tax was held at City Hall.

The tax was introduced by Commissioner Steve Novick, and it's expected to generate between $2.5 and $3.5 million every year.

Commissioner Novick said he would like to see that money help fill the funding gap in the joint office of homeless services.

The tax would only apply to publicly traded companies, and it's only possible because of a new requirement from the U.S. Securities and Exchange Commission.

Starting in 2017, the SEC will require that public companies disclose the ratio of pay between the CEO and the average employee. 

In Portland, this proposal would be a surtax on the city's existing business license tax and would apply to about 540 companies.

Commissioner Novick said of the 540, only about five are actually based in Portland, the others are national companies that do enough business in Portland that they're required to pay business taxes here.

There would also be a step increase for the companies this would affect. For example, a company with a CEO making 300 times what the average employee does would pay more than a company with a 100-to-1 ratio.

Commissioner Novick said there's no excuse for a pay gap like that.

"The creation of this super class that is sucking up much of the income and wealth, and developing an unhealthy level of economic and political power, is largely the result of this huge CEO pay disparity."

Because this is based on the SEC's timeline, if city commissioners approve this tax, it will still take about two years for the City of Portland to see that new revenue coming in.

City Commissioners will vote on the new tax on December 7.

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