[Congressional Record Volume 143, Number 17 (Tuesday, February 11, 1997)]
[Extensions of Remarks]
[Page E217]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       INCOME EQUITY ACT OF 1997

                                 ______
                                 

                         HON. MARTIN OLAV SABO

                              of minnesota

                    in the house of representatives

                       Tuesday, February 11, 1997

  Mr. SABO. Mr. Speaker, a year ago at this time, one couldn't open a 
newspaper or magazine without reading about the widening gap between 
the rich and poor in our Nation. Today, however, these articles are 
difficult to find. Although income inequality has declined slightly 
from its high point in 1993, we are still in the midst of a long-term 
rise in inequality that has persisted since the late 1960's.
  While the income gap persists, working Americans are finding it even 
harder to make ends meet. Though our economy continues to grow, most 
American families have not returned to the income levels they had 
before the 1989 recession. In fact, in 1994 more than 16 percent of 
full-time workers could not support their families above the four-
person poverty level--compared to 12 percent in 1979.
  Although many forces lie behind the growing inequality of income and 
wealth in America, it is clear that both Government and corporate 
America have roles to play in narrowing the gap. For this reason, I am 
introducing the Income Equity Act of 1997. This legislation addresses 
the problem by encouraging corporate responsibility. For too many 
years, the trend in corporate America has been to pay top executives 
lavishly, while thinking of other employees as an expense or not 
thinking of them at all. My legislation will force companies to take a 
close look at how they compensate their employees at both ends of the 
income ladder.
  The Income Equity Act would end our Government's practice of 
subsidizing excessive executive pay through the Tax Code by denying tax 
deductions for executive compensation that exceeds 25 times the 
company's lowest paid full-time employee. For example, if a filing 
clerk at a firm earns $10,000, then any amount of executive salary over 
$250,000 would no longer be tax deductible as a business expense. This 
bill will not restrict the freedom of companies to pay their workers 
and executives as they please. It will send a strong message, however, 
that in return for tax deductions, the American taxpayer expects 
companies to compensate their lowest paid workers fairly.
  Economic inequality is a problem that will, if not addressed, rend 
the fabric of our society. Our Government has every reason, and every 
right, to encourage responsible corporate citizenship. The Income 
Equity Act is not the ultimate answer to the widening gap between the 
rich and the poor, but it is an important step toward ensuring that all 
Americans can share in our Nation's prosperity.

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