The City of Portland, Oregon Is Coming for Companies with Rich CEOs

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In April of 2010, President Obama famously said, “I do think at a certain point, you've made enough money.”

The city of Portland, Oregon, has decided that Obama was right, and is going after companies whose CEOs earn more than 100 times what their employees earn.

CBC News notes that in addition to the current 2.2% tax rate levied on companies that do business in the city, companies whose CEOs earn more than 100 times what its employees earn will be hit with a 10% surcharge. Companies paying CEOs more than 250 times worker pay will be hit with a whopping 25% surcharge.

The city expects to rake in up to an additional $3.5 million in taxes from the companies that do business in the city, such as Wells Fargo, Walmart, and General Electric. The money is earmarked to help combat homelessness in Portland.

In a press release titled, “Portland City Council Combats High CEO Pay,” City Commissioner Steve Novick is quoted as saying:

“When I first read about the idea of applying a higher tax rate to companies with extreme ratios of CEO pay to typical worker pay, I thought it was a fascinating idea—the closest thing I’d seen to a tax on inequality itself.”

Novick, a self-described “Commissioner with a hard left hook,” continues on to reference “Capital in the Twenty-First Century,” a much-debated book centered around income inequality released in 2013 by French economist, Thomas Piketty. In lockstep-left fashion, he affirms Piketty's explanations for wider income inequality in the U.S., saying:

“Extreme economic inequality is—next to global warming—the biggest problem we have in our society. “The top 1%, and especially the top one-tenth of one percent, have a far larger share of wealth and income than they did forty years ago.”

Except, that both Piketty's data and conclusions have been called into question by numerous economists.

Mark Hendrickson, a Harvard-educated economics professor at Grove City College says that Piketty lacks even the most basic understanding of capitalism. Hendrickson's book, “Problems with Piketty: The Flaws and Fallacies in Capital in the Twenty-First Century," addresses several key problems with Piketty's explanations for income inequality.

George Mason University's Mercatus Center also published a critique of Piketty's ambitious tome, noting that his conclusion “consists of rough estimations and bold projections that do not withstand scrutiny.”

But you don't need to be an economics professor to foresee that going after successful companies could lead to problems. Despite a few comments supporting the measure, Novick got pushback on Twitter:

As an alternative for those companies who may not quite agree with a city government determining their pay structure, Texas Governor Greg Abbott would like to remind everyone that low-tax Texas is open for business:

As the saying goes: “A fine is a tax for doing wrong. A tax is a fine for doing well.”

View Comments(21 comments)
Susanna Donovan(5 likes)City of Portland, Oregon is always seeking ways to Tax small businesses.  They were going impose a street tax which, because of efforts by a man who does statistics for a living, pointed out it was grossly inaccurate and biased against small business, so it was dropped.  They later implemented a fuel tax, which has led to people getting their gas outside Portland, which is no small wonder.  They don't understand that to earn more revenue you have to make the city more business friendly, but business keeps   moving out, and entrepreneurial companies won't move in.  Watch all the biggest companies move out of Portland for Tax Relief.  These guys are a bunch of nitwit socialists...Russia had to become less Socialist to survive as did China.  Strong arming big business for paying top wages to CEO's isn't going to profit the city one bit...bye bye Portland.
Ken Kaiser(3 likes)Portland and Oregon in general voted to raise the minimum wage.  That was because their electorate consists primarily of minimum wage earners because they are so unfriendly to business that no one wants to move there.  They are becoming the protest and riot captital of the nation, their streets are in horrible disrepair, (because they divert the money to bike paths), their police department is understaffed, and it goes on and on. I think that people come to Portland just to see what stupid thing they will do next.
mike6080(2 likes)watch companies realize what  the demonrats have done and start relocating to company friendly areas .