Committee debates CEO pay tax; bill moves to finance with negative recommendation

The House Government Operations Committee on March 17 debated House Bill 431, the "CEO Pay Disparity Act," which would raise the corporate excise tax rate by 0.1% for companies whose chief executive officer makes more than 100 times the average worker pay.

Supporters said the measure would reduce the burden on taxpayers who are subsidizing low wages through public assistance programs. "If a company CEO makes more than a hundred times the average worker, then they'll be [assessed an] increase in the excise tax of 0.1%," Sponsor (Representative) said during the hearing. The sponsor cited a fiscal review estimate projecting $3.1 million in additional general‑fund revenue in FY 2025–26 and $7.9 million in FY 2026–27 and subsequent years.

The sponsor framed the bill as an incentive for large employers to raise wages. "We're not telling any corporation how much they should pay their top executives," the Sponsor said. "What this legislation is saying is that if their company will not pay their workers a living wage ... we won't continue to take on the burden as taxpayers." Representative Hardaway also supported the bill's aim, saying it was targeted at full‑time workers who still rely on public assistance.

Opponents raised concerns about how the new revenue would be used and about unintended consequences. Representative Parson said he would support the bill but warned that unspecified general‑fund revenues could later be diverted back to benefit corporate interests. "If we don't direct this money now ... it's gonna go right back to the same folks that we're taxing," Parson said. Representative Parkinson asked whether the measure taxed CEO compensation directly; the Sponsor clarified it would raise the corporate excise tax rather than impose a direct levy on individual executives.

After extended discussion and several members expressing both support and reservations, the committee voted 4 ayes and 8 noes to send HB431 to the Finance, Ways and Means Committee with a negative recommendation.

The bill's sponsor and multiple members emphasized the moral and economic arguments for addressing wage gaps during debate, while several colleagues said they would prefer specified uses for any new revenue rather than depositing it into the general fund.

Votes and next steps: HB431 advanced out of committee to Finance, Ways and Means with a negative recommendation (4–8).