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SF 1936

Additional tax enactment on certain corporations with high principal executive officer to median worker pay ratios

2025-2026 Regular Session Introduced by Liz Boldon and 3 co-sponsors

Minnesota bill SF 1936 imposes a new tax on corporations with extreme CEO-to-median-worker pay ratios to address income inequality and generate state revenue.

Referred to Taxes
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Bill Summary · SF 1936

Legislative bill overview

SF 1936 proposes a new tax on Minnesota corporations where the chief executive officer's compensation exceeds a certain multiple of the company's median worker pay. The bill aims to generate revenue while addressing income inequality by financially penalizing companies with extreme pay disparities between leadership and workers.

Why is this important

Pay ratio policies directly affect corporate compensation structures and could influence hiring and salary decisions at large Minnesota-based companies. The revenue generated would support state functions, while the tax could either encourage pay equity or be passed to consumers and shareholders depending on corporate response. This reflects ongoing national debate about whether tax policy should address wealth concentration.

Potential points of contention

  • Economic competitiveness concerns: Critics argue the tax could incentivize high-paying companies to relocate headquarters or reduce executive presence in Minnesota, potentially affecting tax base and job creation
  • Implementation complexity: Defining "median worker pay," accounting for part-time employees, contractors, and subsidiary structures creates administrative challenges and potential loopholes
  • Effectiveness debate: Supporters claim it encourages pay equity; opponents question whether companies will absorb costs versus adjusting executive compensation, worker pay, or prices rather than accepting lower profits

Compiled from official sources — confirm details with the bill’s official record.

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