San Francisco is considering a ballot measure that could expand its “overpaid executive tax,” raising rates for the wealthy in an attempt to combat income inequality.
The city’s proposed tax was approved in 2020. After it was scaled back in 2024, it could be on the ballot again in June.
While critics call it government overreach into private business, proponents say it is an attempt to address what they say is outrageous compensation.
Here are the details on the tax and the debate unfolding in California.
What the Tax Does
The “overpaid CEO tax” applied to companies with more than 1,000 employees and more than $1 billion in revenue that had top executives who earned more than 100 times the median salary of their San Francisco-based workers.
Certain nonprofits were exempt, as were businesses excluded from local taxation.
The tax was a 0.1 percent surcharge on a company’s annual gross receipts if the CEO’s pay was more than 100 times the median worker’s pay. But the rate increased as the disparity rose—for a company where CEO pay was more than 600 times the median worker’s, the charge would top out at 0.6 percent.
The city estimated the tax would raise $60 million to $140 million annually.
San Francisco voters approved the tax on Nov. 3, 2020, and it became effective Jan. 1, 2022.
But in 2024 voters approved Proposition M, which lowered tax rates on small and large businesses alike, prompting a new push to extract money from companies with high earners.
Organizers belonging to three health care unions in San Francisco submitted more than 21,000 signatures to the Department of Elections to put the Overpaid CEO Act, called Proposition D, on the June 2026 ballot.
Proposition D would calculate the ratio of executive pay to all workers, not just those based in San Francisco. The goal is to produce a lower median and make more businesses subject to the tax, while also pushing more businesses into higher brackets.
‘Pay Their Fair Share’
Proponents of the tax have adopted a “tax the rich” platform that reflects a broader national effort.
“It’s time for large corporations to pay their fair share,” said Katie Aschero, president of the Service Employees International Union 1021 SF General Hospital RN Chapter, in a press release.
Sarah Anderson, director of the Global Economy Project at the Institute for Policy Studies, said she thinks the idea of an Overpaid CEO Tax could spread to other communities.
“Many cities and states are facing budget crunches because of federal spending cutbacks, especially for public assistance programs,” Anderson said in an email to The Epoch Times. “These taxes give corporations a choice: They can narrow their pay gaps and avoid the tax or maintain huge pay divides and contribute more revenue to much-needed public investments. Either way, the result is a win-win.”
Concerns and Criticisms
The San Francisco Chamber of Commerce and Advance SF, a business-aligned nonprofit, stated in a memo that the proposed ballot measure would “materially” increase taxes on a broad range of companies.
They filed a competing ballot measure that would block the union-backed proposal and preserve the original Overpaid CEO Act passed by voters in 2020.
The San Francisco Bay Area Planning and Urban Research Association (SPUR), a nonprofit public policy organization that focuses on economic development, pointed out potential issues with the tax.
SPUR stated it could drive executive compensation “into less visible forms that are more difficult to track and regulate,” and accelerate the automation of jobs. The tax also relies on the businesses to self-report the CEO pay ratios, SPUR said.
“This is a classic example of government bureaucrats trying to dictate to other people how they should live and conduct their commercial enterprises.”
“If a firm is willing to pay someone a wage, and that person is willing to work for the wage, who is a bureaucrat to say such an arrangement is an ‘overpayment?’ The title of the legislation gives the game away in that the bureaucrats want to dictate to others what people should be paid for doing work far outside the scope of government apparatchiks.”
E.J. Antoni, chief economist for The Heritage Foundation, told The Epoch Times that bureaucrats shouldn’t dictate CEO pay. A CEO can regularly add or subtract billions of dollars worth of value from a corporation, he said.
“With that in mind, a good CEO is certainly worth millions of dollars in annual compensation. Taxing those CEOs or the companies that pay them will reduce the value of that compensation and reduce the caliber of CEO attracted by that devalued compensation,” Antoni said.
Similar Proposals Elsewhere
In 2016, Portland, Oregon, became the first city to enact a tax on companies whose CEOs are paid at a substantially higher rate than their employees. In the Portland tax, the ratio was 100-to-1.
The Fair Games Coalition, a group composed of community leaders and labor organizers, announced plans in January to put their own CEO Tax Initiative for Los Angeles on the ballot.
Their version would be levied on corporations whose CEOs earn more than 50 times their median worker in Los Angeles. The group stated it would raise an estimated $500 million a year.
California will also have the Billionaire Tax Act on the November 2026 ballot. That measure would impose a one-time 5 percent tax on individuals with a net worth of $1 billion or more.
Nationally, Rep. Rashida Tlaib (D-Mich.) introduced in September 2025 the Tax Excessive CEO Pay Act of 2025. The bill would impose a sliding corporate tax rate on companies whose highest-paid executives were paid more than 50 times the median worker’s pay. That bill is now in committee.
