In a move that is sure to alarm anyone who knows anything about the history of income tax laws in the United States, Sen. Bernie Sanders is now calling for an “income inequality tax” that would force companies to pay extra income taxes if the CEO and company executives earn significantly more than average employees.
The Income Inequality Tax proposal would raise taxes by .5% on companies whose top executive earn more than 50 times the median salary of workers. This rate rises to 5% for firms where executives and CEOs earn more than 500 times the median worker pay.
At present, the proposed income inequality tax would only apply to public and private companies that earn more than $100 million in revenue per year. However, once the proposal is in place, it wouldn’t take much to “adjust” the number of companies that would be affected, the pay difference for low-level employees and top executives, and other numbers. This is exactly what happened with income tax laws, resulting in almost everyone who holds a job having to pay Federal taxes every year.
There is no telling just how effective the new law would be in generating revenue for the federal government. One source has noted that, under the new law, Apple alone would have had to pay a whopping $1.4 billion more in taxes last year alone. Sen. Sanders obviously has high hopes for the law as his campaign has noted that he expects it to bring in $150 billion over the next decade, money which can then be used to eliminate medical debt throughout the United States.
Sen. Sanders is obviously not counting on the fact that wealthy corporations have large teams of accountants and lawyers who specialize in getting around pesky tax laws. Such a law would speed up the AI revolution as companies invest in algorithms and robots to handle tasks that would have previously been taken on by low-wage employees.
The Income Inequality Tax proposal goes against everything that a free nation is supposed to stand for. Allowing the government to dictate how much a company can pay its employees gives federal officials far too much power, and would wreak havoc on the economy as business owners either avoid hiring low-wage employees or let go of the ones they already have.
