The city government of Portland, Ore., is considering implementing a penalty against companies that pay CEOs many times more than average workers as part of an effort to reduce income inequality, The Huffington Post reported.
On Wednesday all five members of Portland's city council will evaluate arguments on the proposed ordinance, and a vote is scheduled for December, according to the report.
If the penalty is enacted, Portland would be the first U.S. city to take a legal stand against hefty CEO pay. Portland has already granted workers paid sick leave and the state has raised the minimum wage. However, this penalty directly targets a contributor to income inequality that affects a much broader population, according to Portland City Commissioner Steve Novick, who described the city's proposal as a "direct assault on extreme inequality."
Under the proposed ordinance, a public company that pays its CEO more than 100 times what it pays an average worker would be required to pay an additional 10 percent of the business tax it already owes the city of Portland, according to the report.
More than 500 companies with offices in Portland would be affected by the penalty, according to city officials' estimates. One of those companies is General Electric, which pays CEO Jeff Immelt $17.4 million per year — 202 times what the average GE worker makes. Take-home pay for Rupert Murdoch, CEO of 21st Century Fox, is 311 times that of the company's average worker, while Walmart pays CEO Douglas McMillon $5.1 million, or 209 times the average Walmart worker's pay, according to the report.
Officials estimate that the new tax would garner the city between $2.5 million and $3.5 million annually, which would be used to support services for the homeless.