Bernie Sanders' income inequality tax would cost Apple $1.4B
Sen. Bernie Sanders unveiled a new plan on Monday to levy taxes on companies with huge pay disparities between CEOs and their employees — a proposal that, if passed, would cost Apple $1.4 billion.
The Democratic presidential candidate’s plan — the Income Inequality Tax Plan — would raise corporate tax rates on companies with CEO to median work ratios above 50 to 1, beginning with an additional 0.5 percentage point penalty for businesses that pay their chief executive 50 to 100 times more than their average worker.
The tax penalty would peak at 5 percent for companies whose CEOs earn 500 times that of the typical employee, Sanders’ campaign said. Companies with an annual revenue under $100 million would be exempt from the tax.
While most big tech companies would largely be exempt from the tax because they tend to pay employees big salaries (in 2018, the median employee pay at Microsoft was $167,689), Apple is one exception, as first reported by CNBC.
That’s in large part because of the high number of retail workers that Apple employs to run its more than 500 stores, with employ 70,000 people.
And according to a regulatory filing last year, median worker compensation in 2018 was $55,426, compared to CEO Tim Cook’s $15,682,219 paycheck — a ratio of 283 to 1. All public companies are required to disclose this information.
The huge gap between Cook’s paycheck and that of the median worker would place an additional 2 percent tax on the iPhone-maker under Sanders’ proposal, which calls for that tax on companies with a pay disparity between 200 and 300.
Under its taxable income of $72.9 billion, a 2 percent levy on top of the 18.3 percent it already paid would result in an extra $1.4 billion payout.
Other companies would also be required to pay more: Sanders’ campaign said McDonald’s would have paid up to $110.9 million more in taxes, while JPMorgan Chase would be hit with a $793.8 million tax bill.
The 2020 hopeful, who’s trailing Sen. Elizabeth Warren, D-Mass., and former Vice President Joe Biden in the polls, said the revenue from the taxes would go toward eliminating all medical debt in the U.S.