Steve Novick Makes Big Splash on Way Out Door With New Tax

City Commissioner Steve Novick is making his mark as he leaves city government. Defeated by Chloe Eudaly in November. Novick convinced three of his colleagues to make Portland the first city in the nation to adopt a tax on companies whose chief executives are paid at least 100 times the pay of their median employee.

The fee will be added to the city's business tax, which is currently paid by about 550 companies. Officials estimate the new fee will bring in between $2.5 million and $3.5 million every year.

Novick, who will leave the council at the end of the year after 24 years, says that the bill addresses income inequality - long a concern of his.

"In 1964, trust in government was the norm in America—and the average CEO
made only 20 times what the typical worker made," Novick said. "I don't think that's a coincidence. In 1964, people thought the economy and the government worked for everybody.

"Now, they think the game is rigged, and two major reasons for that are the explosion of CEO pay and the rising amount of, and increased attention to, money in politics."

The Portland Business Alliance opposed the proposal as did Commissioner Dan Saltzman who was the only member of the council to vote against it.

Saltzman said he doesn't think it's the right time to impose such a surtax.

Under the new law, if a company's chief executive makes 100 times more than the cost of the median employee, the company will pay a surcharge of 10 percent of what it pays in business tax. If the chief executive is paid 250 times the median employee, the surcharge will be 25 percent.

In other words, if the company owes $1 million in taxes, and their chief executive makes 100 times more than the median employee, they will have to pay an additional $100,000.

The tax will go into effect in 2018 using data collected by the Securities and Exchange Commission beginning next year.

Photo Steve Novick