[Congressional Record (Bound Edition), Volume 147 (2001), Part 11] [Extensions of Remarks] [Page 15603] [From the U.S. 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. ____________________