Bay Area Congressman Proposes Higher Taxes For Companies With Skyrocketing CEO Pay

MARTINEZ (CBS SF) -- A Bay Area congressman is proposing federal legislation that would tax publicly-owned companies with "excessive" CEO pay more than other companies.

Rep. Mark DeSaulnier (D-Concord) says the CEO Accountability and Responsibility Act, which he introduced Wednesday with Rep. Bonnie Watson Coleman (D-NJ), "sets the stage to stop fueling excessive income inequality."

In a statement released Wednesday, DeSaulnier provided his critique on corporate America in the wake of recent business scandals including allegations that Wells Fargo charged customers for phony accounts and that Mylan overcharged customers for Epi-Pens.

"America has a problem, as we see company after company come before Congress to apologize for bad behavior. One would ask, what has happened to our business culture?" said DeSaulnier. "Too many executives at the top are incentivized to put profits before people by catering to shareholders and padding pockets on the back of consumers. Corporations should have a moral and social responsibility to workers, consumers, and American democracy."

Former U.S. Secretary of Labor Robert B. Reich supports the legislation. Reich, now a professor of public policy at the University of California at Berkeley, said in a statement on Wednesday, "Corporations that pay their top executives vast multiples of the typical worker's wage should face higher taxes than corporations whose top pay is closer to the typical worker's. The CEO Accountability and Responsibility Act is an important and necessary step."

Reich explained his view on inequality in the U.S. in an illustrated video released by the Economic Policy Institute in 2013. In the educational video Reich maintains that inequality in the U.S. took off in the late 1970s following slashed tax rates on high incomes in the 1960s.

By Hannah Albarazi - Follow her on Twitter: @hannahalbarazi.