The Overpaid CEO Tax (Explained Visually)

There’s an interesting showdown happening right now between the city of Los Angeles and mega corporations like Starbucks. It has to do with how much a barista is paid compared to how much the CEO is paid.

For every dollar that the barista makes, how much do you think that CEO makes? You probably know that number is staggering, but you still might be surprised at how big the difference is.

The Proposal

In an era where working class folks are struggling to pay the bills, let alone buy a house, the cities of Los Angeles and San Francisco are proposing legislation to address this massive gap. They’re calling it The Overpaid CEO Tax.

Here’s how it works: it all depends on the ratio between worker pay and CEO pay.

  • If it’s no larger than 50 to 1, normal taxes apply.
  • Once it goes above that, the company will have to pay a penalty on their local business tax:
    • 50–100 to 1 → 1x the original tax
    • 100–200 to 1 → 2x the original tax
    • 200–300 to 1 → 4x the original tax
    • 300–400 to 1 → 6x the original tax
    • 400–500 to 1 → 8x the original tax
    • 500+ to 1 → 10x the original tax
A hand-drawn sketchnote titled 'The Overpaid CEO Tax.' At the top left, a Los Angeles skyline sits above the text 'Narrow the gap, or pay higher taxes.' A dotted line labeled 'VS' connects it to a hand-drawn Starbucks Coffee logo at the top right, with the text 'We'll see about that...' Above the VS, an arrow points off the page to '1,794! Brian Niccol.' In the lower left, a barista holds a coffee cup, and in the lower right, a CEO stands in a suit with arms on hips. Between them, a vertical scale shows the CEO-to-worker pay ratio climbing from 50 to 450, with corresponding tax multipliers labeled 1x, 2x, 4x, 6x, and 8x. A tall stack of cash grows alongside the scale, illustrating how the tax penalty increases as the pay gap widens. To the left, a sign reading 'Local Biz Tax' with a dollar sign connects to the scale, with the question 'Coming to a city near you?' nearby. Along the bottom: a YouTube icon labeled 'More Perfect Union,' 'Sketch by Doug Neill,' and 'www.verbaltovisual.com.'

Where the Money Goes

That money will go to the city, which will then fund programs designed to support the working class, with one of the goals being to help working families pay no more than 30% of their income on housing.

The Pushback

Fed up with obscene levels of inequality, the city of Los Angeles has the opportunity to say: “Narrow the gap, or pay higher taxes.”

Mega corporations like Starbucks are saying: “We’ll see about that…” as a number of large companies, business organizations, and billionaires are funding ad campaigns against this legislation.

Source

Shoutout to the More Perfect Union YouTube channel for covering this in a recent video that inspired this sketch.

Might this come to a city near you? We’ll see.

The Starbucks Pay Gap

By the way, the pay gap for Starbucks CEO Brian Niccol doesn’t even come close to fitting on the page. It’s 1,794 to 1.

Want to learn how to take visual notes like the ones you see here? Check out these resources.