[Congressional Record Volume 147, Number 110 (Wednesday, August 1, 2001)]
[Extensions of Remarks]
[Page E1481]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       INCOME EQUITY ACT OF 2001

                                 ______
                                 

                         HON. MARTIN OLAV SABO

                              of minnesota

                    in the house of representatives

                         Tuesday, July 31, 2001

  Mr. SABO. Mr. Speaker, analysis of recent Congressional Budget office 
data on income trends show alarming evidence of the widening gap 
between America's highest- and lowest-paid workers. Between 1979 and 
1997, the income of the lowest 20 percent of U.S. households, in 
constant dollars, fell by $100. In contrast, the household income of 
those in the top 1 percent increased an average of $414,000. Despite 
the unprecedented economic growth of the past decade, America's lowest-
paid workers are not catching up.
  The outlook appears as dim. With passage of President Bush's tax cut 
earlier this year, the disparity between low- and high-income 
households will only widen. When fully phased in, the top 1 percent of 
households would see their income grow 6-7 percent, or $46,000-$53,000. 
However, the household income of the lowest 20 percent would rise only 
0.8 percent, and the income of those in the middle fifth would rise 
only 2.2 percent.
  To combat this troubling growth of economic inequality in America, I 
am again introducing the Income Equity Act. 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 encourage companies to 
take a closer look at how they compensate their employees at both ends 
of the income ladder.
  The Income Equity Act would place a new limit on our government's 
practice of subsidizing executive compensation through the tax code. My 
bill would enhance the current $1,000,000 cap on the tax deduction for 
executive compensation with a cap set at 25 times the company's lowest 
full-time salary. For example, if a filing clerk at a firm earns 
$18,000, then any amount of executive compensation over $450,000 would 
no longer be tax deductible as a business expense.
  I have revised the Income Equity Act for 2001 to include non-cash 
compensation such as stock options, memberships to premier health and 
sporting facilities, and higher education for executives' children. 
More and more executives are receiving compensation in forms other than 
cash, and my revised legislation addresses this trend to ensure that 
taxpayers do not inappropriately subsidize these forms of compensation.
  This bill would not restrict the freedom of companies to pay their 
workers and executives as they please. It would send a strong message, 
however, that in return for tax deductions, the American taxpayer 
expects companies to compensate their lowest-paid workers fairly.
  Mr. Speaker, my legislation alone will not completely close the ever-
widening income gap in America. However, it is an important step in 
resolving this growing problem that imposes monetary and social costs 
on all of us.

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