Portland Commissioner Steve Novick says he has two reasons for pushing a tax on publicly traded companies that give big salaries to their CEOs.
He thinks he may lose his re-election battle against lefty opponent Chloe Eudaly, and he says he wants to make sure he does something to tackle income inequality before his first term ends in December.
"This, for me, is a legacy issue," he says.
He's also hoping the presidential election and the nation's focus on topics such as outrageous CEO pay will bring a national spotlight to his proposal. That would encourage other cities to follow suit, he says, adding, "This would be a meaningful blow against inequality."
It's also a pretty clever way to guard against the possibility of losing, given the fact that Novick and Eudaly will battle in November for the young and progressive voters inspired by the presidential election to fill out their ballots.
The idea, which heads to the City Council for discussion on Sept. 22, is to add a surcharge to the business license tax that publicly traded local, national and international companies already owe in Portland. They would face that surcharge if they pay their CEOs more than 100 times what they pay a typical employee—information that will be disclosed publicly starting in 2017 under federal Wall Street reforms.
Novick discounts the idea that his proposal is a campaign ploy designed to draw votes away from Eudaly. The proposal wouldn't be possible without the rule change from the U.S. Securities and Exchange Commission, which is another explanation for his timing, he says.
"People are willing to listen," he says of his four colleagues on the council. "I hope I can get two people to do more than that."
Unlike the proposed 2014 street fee, which affected nearly all voters in Portland, a CEO tax strikes at a small number of companies, many of which don't keep headquarters in Portland or even Oregon.
About 25,000 entities pay Portland's business license tax.
Of those, about 545 are publicly traded, and city officials estimate that the CEO tax would affect only a portion of those. That means the tax would generate about $2.5 million a year—money that could help Portland address its homelessness problem, Novick says.
Still, business leaders, including those at the Portland Business Alliance, think the tax is a bad idea. "We're very skeptical," says Sandra McDonough, PBA president, "that doing this is going to have any effect on pay equity nationally."