[Congressional Record Volume 142, Number 45 (Thursday, March 28, 1996)]
[Extensions of Remarks]
[Pages E478-E479]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                   THE GROWING INCOME GAP IN AMERICA

                                 ______


                         HON. MARTIN OLAV SABO

                              of minnesota

                    in the house of representatives

                       Wednesday, March 27, 1996

  Mr. SABO. Mr. Speaker, I rise today to express my continued deep 
concern over the growing income gap in America. Last week, I stated 
that we must address this problem now, by enacting policies that 
encourage responsible corporate citizenship. Today, I would like to 
offer one example of how we can do so.
  It is clear from our recent budget debates that all Members want the 
legislation we pass to expend Government resources wisely, getting the 
most value for our Federal dollars and granting the benefits of Federal 
policy to those who truly deserve them.
  Americans from across the political spectrum have decried high CEO 
pay and perks,

[[Page E479]]

which seem only to increase while layoffs grow and worker pay 
stagnates. Many of our constituents may be surprised to learn, however, 
that our Government allows corporations generous tax deductions for 
corporate pay. Meanwhile, the lowest paid worker in the company could 
be earning the minimum wage and be below the poverty level.
  In granting such tax deductions, our Government is implicitly 
encouraging this type of excessive compensation. I believe that in 
giving business this tax deduction, we should expect something in 
return. This is why I introduced the Income Equity Act, H.R. 620. My 
bill would restrict the amount of executive pay that is tax deductible 
by linking the tax deduction of those who make the most at a company 
with the salaries of those who make the least. H.R. 620 would limit the 
tax deductibility of executive pay to 25 times that of the lowest paid 
full-time worker. For example, if the lowest paid worker in a company 
is a janitor who is paid $10,000 per year, then any amount of salary 
paid to the CEO above $250,000 would no longer be tax deductible as a 
cost of doing business.
  My bill will not restrict the freedom of companies to pay its workers 
and executives as they please. H.R. 620 will, however, send a strong 
message that companies should look out for those at the bottom as well 
as those at the top of the income ladder. H.R. 620 would also raise the 
minimum wage from the current $4.25 to $6.50 per hour, making up for 
the loss in buying power the minimum wage has experienced.
  The Income Equity Act would be an important first step in crafting 
Government policies that encourage responsible corporate citizenship. I 
do not seek to burden businesses, but they must realize that we all 
have roles to play in bridging the income gap. Today, I ask your 
support for the Income Equity Act, which is just one piece of what must 
be a comprehensive plan to restore working Americans' faith in our 
economy.

                          ____________________