SACRAMENTO — Disney heir Abigail Disney testified Wednesday before the California State Senate in support of a bill that would raise the state’s corporate income tax rates while incentivizing firms to curb CEO pay.
Disney — and the group she belongs to, Patriotic Millionaires — have been vocal advocates for reducing income inequality by raising corporate taxes, equalizing tax rates on capital gains and income, raising the federal estate tax and increasing the federal minimum wage to $15 an hour by 2024.
Last year, the Disney heir publicly criticized Disney CEO Bob Iger’s $66 million pay package, which was 1,424 times the median salary of Disney employees, according to a study from Equilar.
Currently, the California corporate income tax rate for most businesses is 8.84%. The bill would raise that rate for companies with more than $10 million in net income to somewhere between 10.84% and 14.84%, depending on a firm’s CEO-worker pay ratio. (Rates for banks would rise to between 12.84% and 16.84%.)
Most companies that pay their CEOs more than 300 times that of the median worker’s salary would be subject to the top 14.84% rate.
“Corporate profits have skyrocketed to an all-time high, and yet worker wages have barely budged. These same profitable corporations have also just reaped the benefits of a massive windfall from Trump’s 2017 tax cut. In spite of such tremendous gains, the portion of tax paid by corporations to the state of California is at nearly its lowest point in 40 years,” Patriotic Millionaires and California Voices for Progress noted in a letter to the chairman of the California Senate’s Governance and Finance Committee.
Opponents of the bill, which include the California Chamber of Commerce, refer to it as a “job killer.”
“If [the bill] passes California will have the highest corporate tax rate in the country and the highest or second highest tax rate nationally for income taxes, sales taxes, and motor vehicle fuel taxes. This will undoubtedly discourage companies from locating or further investing in the state,” the Chamber wrote in a letter to the finance committee.
It is still early in the legislative process. Wednesday’s hearing will be the first for the bill, which was originally introduced in 2018.