Could a “Maximum Wage” Combat Billionaire Power?
Nearly a decade after Portland passed a landmark law to reign in CEO pay, social movements should aim to replicate the city’s success across the country.
Celeste Pepitone-Nahas
In the first year of President Donald Trump’s second term, the power of the extremely wealthy over public policy has never been more evident. As Sen. Bernie Sanders (I-Vt.) has asserted, “Trump has… said it loudly and clearly: we are a government of billionaires.” The troubling extent to which we are ruled by the rich is hardly debatable. The real question is, what can we do about it?
One solution that has been proposed in the past is implementing a “maximum wage.” Such a cap would limit the amount any individual can earn over a given period.
There are a couple different ways that this limit could be accomplished. One way would be to use tax policy: We could simply levy a 100% tax rate on income over a particular level. President Franklin Delano Roosevelt proposed such a measure during his administration in the 1940s. Although he did not reach his goal, the U.S. Congress passed the highest ever federal tax rate of 94% on top earners during World War II, and it kept the rate above 90% for the two decades that followed. (This is a far cry from the reality today, when the highest tax rate is 37%, and when few mainstream Democrats have supported Rep. Alexandria Ocasio-Cortez’s [D-N.Y.] proposal to raise the tax on the top bracket to 70%.)
Another approach to creating a “maximum wage” would be to implement regulations that set an acceptable ratio between the salary of those at the top of a business and those at the bottom. These measures might say, for example, that a CEO can only make 10 times the amount of the lowest-paid worker at a firm, lest the business face penalties. If the lowest-paid workers at a business were making $35,000 per year, the maximum salary for the boss would be $350,000.
A 10:1 ratio might still sound like an extreme gap between rich and poor. But, in fact, even a 100:1 ratio would serve as a major restriction on CEO pay. A new “Executive Excess” report released by the Institute for Policy Studies in August revealed that, among the 100 S&P 500 companies with the lowest median worker pay, the CEO-to-worker pay gap reached 632:1 in 2024. The worst ratio belonged to Starbucks, whose CEO Brian Niccol — who brought home $95.8 million in annual pay that year — made 6,666 times the pay of an average barista.
For these CEOs, reaching 100:1 would either require a huge pay cut or a big raise for those at the bottom. And that’s the point. Linking minimum wages with maximums incentivizes companies to improve conditions for workers at the same time it encourages them to reign in runaway compensation for executives.
Back in December 2018, Whirlwind Institute co-director Mark Engler interviewed veteran labor journalist and Institute for Policy Studies Associate Fellow Sam Pizzigati about the publication of Pizzigati’s book The Case for a Maximum Wage. The book highlighted some instances where activists have successfully pushed for maximum wage laws — both in the United States and abroad. As one example, Pizzigati pointed to Spain’s Mondragón worker cooperatives, which capped the pay ratio between top managers and workers at 6:1 at their start in the 1950s and have since kept limits in place: “A key part of the [Mondragón] success story is this idea that they are not going to let the gap between executive and workers widen to an atrocious degree,” the author explained.
Could the U.S. follow this lead?
The most prominent example of a “maximum wage” in the United States — or at least a step toward it — comes from Portland, Oregon, which in 2016 became the first city to pass a CEO pay-ratio tax. This measure charges businesses a 10% surcharge if CEOs earn 100 times more than the median worker, and it imposes a 25% penalty if the ratio is 250:1 or more.
Portland, Oregon happens to be my hometown, and I came of age during the Occupy protests there. Because of this, I was curious to find out what has happened since then. How has the measure held up? Have other cities, states and countries attempted such policies?
Looking at Portland’s 2016 ordinance, I was struck by the manifesto-like tone of the document, which opens with a reference to French economist Thomas Piketty and makes a rousing case for the importance of taxing the rich. The measure estimated that the surtax would increase city revenue by up to $3.5 million annually, money which could be used to assist Portland’s unhoused community.
Since then, Oregon Public Broadcasting has reported that the tax has exceeded expectations and actually raised an average of $5 million annually. When the tax first passed in Portland, the city commissioner who proposed the measure, Steve Novick, remarked, “I’m hoping we start getting calls from cities, counties and states, and a year from now many other jurisdictions will have done the same thing.”
In the years since, Novick’s vision has not materialized, and in some ways progress has been painfully slow. That said, state-level initiatives have at least been proposed in Connecticut and Illinois (2017), New York (2019), California (2020), Hawaii (2021), Massachusetts (2023), Minnesota (2017), Rhode Island (2017), and Washington (2025).
In 2020, San Francisco became the second city to pass a CEO-to-worker pay ratio tax. Similar to Portland, companies are taxed proportionally to their pay ratio: ranging from 0.1% on gross receipts for the 100:1 bracket all the way up to 0.6% for a bracket of more than 600:1, with businesses also facing additional payroll taxes. During the 2022-2023 fiscal year, the tax generated about $206 million annually, according to city data — not bad!
There are some differences between the measures in the two cities. The one in Portland was passed by the city council, while in San Francisco the public voted on the proposition, which passed with 65% of the vote. Another difference is that while Portland’s law only applies to public companies, San Francisco includes public and private businesses, a difference made possible because San Francisco requires businesses to release payroll information to the city.
At the federal level, there have been repeated attempts to pass a pay-ratio tax. Most recently, in August 2025, California congressman Mark DeSaulnier re-introduced his CEO Accountability and Responsibility Act — a measure he had previously brought forward in 2020. Citing Portland and San Francisco as precedents, the act proposes to increase the corporate tax rate on companies with extreme CEO-to-worker pay ratios, while also offering positive incentives to companies with pay ratios below 50:1.
“While Republicans bend over backwards to help their CEO friends… I’m countering their misguided efforts… [and working] to put an end to excessive corporate greed that is eroding the middle class and threatening our democracy,” DeSaulnier said in a press release.
Disclosure as a first step
Short of implementing actual maximum wage laws, an important first step is to pass disclosure laws that require companies to publicly share the salaries of CEOs and employees. This is information that corporations would prefer to hide — making it impossible for the public to even know the pay ratio at their businesses.
The 2010 Dodd-Frank Act made significant strides in this direction, requiring that companies begin making this information available. When that provision took effect in 2017, a surge in media coverage on income inequality followed.
A 2018 study by the Society for Consumer Psychology reported that when consumers are aware of such data, they avoid buying from firms with higher ratios. India passed disclosure laws in 2013, and the Hindu Business Line subsequently published an editorial claiming that: “These disclosures drive home the point that income inequality is alive and well in corporate India — a trend that may need reining in by policymakers and organised workers’ unions.” Australian labor party leaders proposed disclosure laws in 2018, and disclosure laws even stronger than those in the U.S. came into effect in 2020 in the UK. (British firms are to answer pointed questions about their compensation policies, explaining “whether the company believes that [the pay ratio] is consistent with the company’s general employee pay, reward and progression policies and, if so, why.”)
Today, the disclosure provision in the United States is being threatened by Trump-nominated Republican members of the Securities and Exchange Commission, or SEC. Republican Chairman Paul Atkins, nominated by Trump following the 2024 election, called the CEO pay disclosure regulations a “Frankenstein patchwork of rules,” while Republican Trump-appointed commissioner Mark T. Uyeda stated that the SEC should “refrain from expanding its rulebook simply because some may think that executive compensation is too high.”
International momentum
While the maximum wage concept has so far gained only limited political traction domestically, it has become a hotter issue abroad.
In the summer of 2024 in France, the leftist coalition New Popular Front won 182 deputy seats out of 577, making it the largest bloc in that country’s National Assembly. While the Left still falls short of holding a majority, the shock victory revived the progressive electoral prospects and went far in legitimizing their demands. One of the party’s most prominent voices, former French presidential candidate Jean-Luc Mélenchon, repeatedly made an executive pay cap part of his platform during runs in 2017 and 2022. “I believe that there is a limit to the accumulation [of wealth],” he has stated, “If there are any who want to go abroad, well, goodbye!”
Mélenchon’s ideas have worked their way into the mainstream. In 2022, after the CEO of French-Italian multinational car company Stellantis made headlines the previous year for earning 298 times more than his employees, incumbent President Emmanuel Macron and far-right candidate Marine le Pen both spoke out against excessive pay, parroting their leftist rivals. Macron, a former business executive and no friend of the working class, even felt pressure to call for an executive pay cap. Understood as largely symbolic, his words nevertheless showed a shifting window of opinion in his country. As for then – Stellantis CEO Carlos Tavares, when asked about his salary, he simply said: “Make a law, I’ll respect it.” Perhaps Macron should listen.
Beyond reigning in astronomical executive earnings, a maximum wage represents a step toward limiting the influence of the ultra-rich in politics. In other words, it not only pays economic dividends, but democratic ones as well. Almost a decade after the city implemented its groundbreaking ordinance, Portland has demonstrated that it was well ahead of its time. Lawmakers from across the country should be eager to copy its success.
Celeste Pepitone-Nahas is a research analyst with the Whirlwind Institute, a social change strategy center. A Fulbright recipient, she holds an MFA in nonfiction writing from Washington University in St. Louis. Her debut novel, The Greats, is forthcoming from Graywolf Press.
