After some last minute amendments were announced to a bill that would address the disparity between CEO and worker pay, Senator Mark DeSaulnier was unable to pass his bill through the state senate. The bill failed in a 18-17 vote.
Here is the statement by Senator DeSaulnier:
Senator DeSaulnier Statement on CEO Compensation Bill
Earlier this week, Senator Mark DeSaulnier (D-Concord) announced amendments to SB 1372 to address the growing disparity between CEO and worker pay, while also providing funding to retain California companies and attract new businesses.
SB 1372 creates a new corporate tax table that decreases taxes for employers with sensible differences between CEO and worker pay, and increases taxes on companies with large disparities between CEO and worker pay. New amendments to SB 1372 require excess funds generated by this new corporate tax table be used by the Governor’s Office of Business and Economic Development (Go-Biz) to offer tax credits through the California Competes Tax Credit to companies that want to come to or stay and grow in California. These funds would only be available to companies in which the CEO makes no more than 100 times of the median worker salary.
The bill failed to garner the necessary votes to pass off the Senate Floor today.
“We listened to opposition and amended SB 1372 to ensure that any revenue generated by adjusting the corporate tax table would be reinvested in California companies,” Senator DeSaulnier said. “Funds generated by SB 1372 would have been aimed directly at retaining California companies or attracting new businesses with reasonable CEO pay to our state. Additionally, a quarter of this extra revenue would be dedicated to tax credits for small businesses. This bill would have helped stimulate economic development and keep good jobs in California.”
Here is a look at the SB 1372
LEGISLATIVE COUNSEL’S DIGEST
The
This
The people of the State of California do enact as follows:
SECTION 1.
Section 18410.2 of the Revenue and Taxation Code is amended to read:
18410.2.
(a) The California Competes Tax Credit Committee is hereby established. The committee shall consist of the Treasurer, the Director of Finance, and the Director of the Governor’s Office of Business and Economic Development, who shall serve as chair of the committee, or their designated representatives, and one appointee each by the Speaker of the Assembly and the Senate Committee on Rules. A Member of the Legislature shall not be appointed.
SECTION 1.SEC. 2.
Section 23151 of the Revenue and Taxation Code is amended to read:
23151.
(a) With the exception of banks and financial corporations, every corporation doing business within the limits of this state and not expressly exempted from taxation by the provisions of the Constitution of this state or by this part, shall annually pay to the state, for the privilege of exercising its corporate franchises within this state, a tax according to or measured by its net income, to be computed at the rate of 7.6 percent upon the basis of its net income for the next preceding income year, or if greater, the minimum tax specified in Section 23153.
If the compensation ratio is: | The applicable tax rate is: |
Over zero but not over 25 | 7% upon the basis of net income |
Over 25 but not over 50 | 7.5% upon the basis of net income |
Over 50 but not over 100 | 8% upon the basis of net income |
Over 100 but not over 150 | 9% upon the basis of net income |
Over 150 but not over 200 | 9.5% upon the basis of net income |
Over 200 but not over 250 | 10% upon the basis of net income |
Over 250 but not over 300 | 11% upon the basis of net income |
Over 300 but not over 400 | 12% upon the basis of net income |
Over 400 | 13% upon the basis of net income |
SEC. 3.
Section 23635 is added to the Revenue and Taxation Code, to read:
23635.
(a) For each taxable year beginning on or after January 1, 2015, in taxable years in which there is a qualified amount, there shall be allowed to each qualified taxpayer a credit against the “tax,” as defined in Section 23036, in an amount determined by the committee pursuant to subdivision (c) and approved pursuant to Section 18410.2.
SEC. 2.SEC. 4.
This act provides for a tax levy within the meaning of Article IV of the Constitution and shall go into immediate effect.