LANSING, Mich. – State Representative Dylan Wegela (D-Garden City) is seeking to limit the amount of money CEOs earn in the state of Michigan.
That’s why he’s co-sponsoring a bill in Lansing, he hopes will start to even the playing field.
“I think people know that the system right now is not favoring working-class people; it is favoring the wealthy few,” Wegela, a first-term Democrat, said on Thursday. “We have three people who make more wealth in the bottom 50% of the country combined. Right now, we have 41 percent of families that are struggling to meet their basic needs.”
This bill, House Bill 4603, is co-sponsored by four other Democrats and is currently on the committee in Lansing.
It was first introduced during the previous session by former State Rep. and current Washtenaw County Commissioner Yousef Rabhi.
Michigan is home to numerous major publicly traded companies, including Ford, General Motors, Kellogg’s, Ally Financial, and Whirlpool.
The bill seeks to impose a tiered tax structure for businesses that pay their CEOs more than 50 times the median salary of their employees.
“Right now, there are at least 30 publicly traded companies in Michigan that pay their CEOs a greater than 50:1 ratio to their median worker, with one as high as 1,659:1,” Wegela said. “This is twice as many companies as we counted last year.”
Here’s how the system would work. Under the proposed legislation, tax surcharge rates would be based on the following tiers:
• If the pay ratio is 50 to 1 or less, there is no tax surcharge,
• between 50 and 100 to 1, a 5% tax surcharge,
• between 100 and 200 to 1, a 10% tax surcharge,
• between 200 and 300 to 1, a 20% tax surcharge,
• between 300 and 400 to 1, a 30% tax surcharge,
• between 400 and 500 to 1, 40% tax surcharge,
• above 500 to 1, 50% tax surcharge.
“The CEO class keeps taking more and more while the rest of the working class are carrying them on our backs,” Wegela said.
The bill is currently in committee in Lansing, and Wegela knows it could struggle to get a hearing in the Republican-led House, but he feels this will help working families in the state.
“Hopefully, it will encourage or either force our corporations to start paying workers their fair share for the profits that they are creating.”
The business community is opposed to this bill.
In a statement to Local 4, the Michigan Chamber of Commerce said:
“If the Michigan legislature sets policy like this, it would simply drive out corporate jobs and investments and further weaken our state’s competitiveness and business climate.
We should instead be focusing on addressing critical issues like road funding, boosting educational achievement, and fostering population and economic growth and opportunity for all."
Randy Gross, Senior Director of Legislative Affairs for the Michigan Chamber of Commerce
