To cap maximum income, and for other purposes.
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This act may be cited as the “Forty-to-One Act.”
(b) TABLE OF CONTENTS.—
Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Definitions.
Sec. 4. Amending the Internal Revenue Code of 1986.
Sec. 5. Amending the Fair Labor Standards Act of 1938.
Sec. 6. Effective Date.
SEC. 2. FINDINGS
(a) FINDINGS. Congress finds that—
(1) over the past decades, the top 1 percent of American earners have nearly doubled their share of national income;
(2) in 2019, the richest 1 percent of households in the United States averaged more than 84 times as much income as the bottom 20 percent;
(3) between 2009 and 2019 the top 1 percent of wage earners grew their wages by 20.4 percent, as compared to wage growth of just 8.7 percent for the bottom 90 percent;
(4) the top 1 percent of households owns 38 percent of wealth in the United States in 2018, up from 28 percent in 1989;
(5) the top 1 percent of households is responsible for 23% of global carbon emissions growth between 1990 and 2019, while the bottom 50% is responsible for only 16% of emissions growth;
(6) the United States set tax rates for the top income bracket at 94% during World War 2;
(7) the tax rates on the top income tax bracket fell from 91 percent in 1963 to 39.6 percent currently;
(8) excessive income inequality is not in the interest of the United States.
SEC. 3. DEFINITIONS.
In this Act—
(1) “Employer” means any person acting directly or indirectly in the interest of an employer in relation to an employee and includes a public agency, but does not include any labor organization (other than when acting as an employer) or anyone acting in the capacity of officer or agent of such labor organization.
(2) “Executive” means the president, any vice president in charge of a principal business unit, division or function (such as sales, administration or finance), any other officer who performs a policymaking function, or any other person who performs similar policymaking functions for the issuer. Executive officers of subsidiaries may be deemed executive officers of the issuer if they perform such policymaking functions for the issuer.
(3) “Employee” shall mean any individual employed by an employer.
SEC. 4. AMENDING THE INTERNAL REVENUE CODE OF 1986.
(a) GENERAL RULE.— Section 26 of title 1, United States Code (26 U.S.C. 1 et seq) is amended by:
(1) striking “Over $250,000” from subsections (a) through (c) and inserting “over $600,000”;
(2) striking “39.6% of the excess over 250,000” from subsections (a) through (c) and inserting “100.00% of the excess over $600,000”;
(3) striking “Over $125,000” from subsection (d) and inserting “over 300,000”;
(4) striking “39.6% of the excess over 125,000” from subsection (d) and inserting “100.00% of the excess over $300,000”; and
(5) striking “39.6%” from subsection (e) and inserting “100.00%” of the excess over $300,000”;
SEC. 5. AMENDING THE FAIR LABOR STANDARDS ACT OF 1938.
(a) GENERAL RULE.— Title 29 of the Fair Labor Standards Act is amended by:
(1) redesignating sections (208) through (219) as sections (209) through (2020) and
(2) inserting after section (208) the following new section:
“(208). MAXIMUM WAGE ON FEDERAL CONTRACTS.
(a) Every employer providing any contract services under a contract with the United States or any subcontract thereunder shall compensate the employer’s highest paid executive equal to forty (40) times or less than the median compensation and/or salary paid to its non-executive employees.
(b) The Secretary of the Treasury (or the Secretary’s delegate) shall issue regulations as necessary to prevent avoidance of the purposes of the amendments made by subsection (a), including regulations to prevent the manipulation of the compensation ratio under section 11(e) of the Internal Revenue Code of 1986 by changes to the composition of the workforce (including by using the services of contractors rather than employees).”
SEC. 6. EFFECTIVE DATE.
(a) EFFECTIVE DATE. —The amendments made by this Act shall apply to taxable years beginning after December 31, 2024.