L.A. unions push new tax on companies with ‘overpaid’ CEOs

A gaggle of Los Angeles labor unions is proposing a poll measure they are saying would fight earnings inequality within the metropolis by elevating taxes on corporations whose chief govt officers make at the least 50 occasions greater than their median-paid worker.

The so-called Overpaid CEO Tax initiative was introduced Wednesday at a rally outdoors Elon Musk’s Tesla Diner in West Hollywood, and featured union employees holding indicators that learn “Taxing greed to pay for what we’d like,” and a cartoon cutout of a boss carrying cash luggage and puffing a fats cigar.

“It’s excessive time the wealthy paid extra taxes,” mentioned Kurt Petersen, the co-president of Unite Right here Native 11, which represents airport and lodge staff.

The proposal is sponsored by the Honest Video games Coalition, a group of labor teams that features the Los Angeles academics union, and comes on the heels of a statewide poll proposal for a one-time 5% wealth tax on California billionaires that might elevate cash for healthcare for essentially the most weak.

Revenues raised by the CEO tax could be earmarked for particular functions and never go on to town’s normal fund.

Based on proponents, 70% would go to the Working Households Housing Fund; 20% would go to the Avenue and Sidewalk Repairs Packages and 5% would go each to the After-College Packages Fund and the Recent Meals Entry Fund.

To be able to place the measure on the November poll, supporters should accumulate 140,000 signatures within the subsequent 120 days.

Critics say the proposal is misguided and would drive enterprise away from town.

“It could encourage corporations which have minimal contact and enterprise in Los Angeles to fully pull out,” mentioned Stuart Waldman, head of the Valley Business & Commerce Assn. “You’ll by no means see one other lodge inbuilt Los Angeles. It’s only one thing more that may drive enterprise away.”

He added that $350 million for reasonably priced housing would create about 350 items of reasonably priced housing per yr, which might not do a lot to have an effect on town’s housing disaster.

“That does nothing to assist individuals. However quite the opposite, that tax would do extra to harm individuals by pushing companies out of Los Angeles and pushing jobs out of Los Angeles,” he mentioned.

United Lecturers-Los Angeles President Cecily Myart-Cruz mentioned academics assist the proposal as a result of it will not solely elevate cash for after-school applications, but additionally assist academics discover housing in L.A.

“They’ll’t reside the place we train, as a result of the costs are out of attain,” Myart-Cruz mentioned.

Supporters argue that the tax is not going to chase companies out of Los Angeles.

Kurt Petersen, co-president of Unite Right here Native 11, speaks in favor of a measure that might improve taxes on corporations whose chief govt officers make at the least 50 occasions greater than their median paid worker.

(Genaro Molina / Los Angeles Instances)

“Positive in the event that they wish to go away the second largest market within the nation, go for it. However nobody’s leaving that,” Petersen mentioned.

The ordinance, if handed by voters, would impose a further tax of as much as 10 occasions the corporate’s common enterprise tax, based mostly on the pay distinction between the highest-paid worker on the firm and the bottom, the initiative mentioned.

Based on the coalition, the present metropolis enterprise tax is between 0.1% and 0.425% of gross receipts.

If a high supervisor at an organization makes between 50 and 100 occasions the median worker, the corporate pays an “Overpaid CEO tax” equal to the enterprise tax in any other case paid by the corporate. If the highest supervisor makes higher than 500 occasions the median worker, the enterprise could be required to pay a further tax of 10 occasions the enterprise tax in any other case owed.

“The larger the hole, the upper the tax,” Petersen mentioned.