Income Equity Act of 2005

This bill would change federal tax law to limit the tax deductions businesses can claim for executive pay. Specifically, it would prevent a company from deducting the cost of an employee's compensation if that salary is more than 25 times higher than the pay of the company's lowest-paid worker.

For everyday citizens, the bill aims to discourage large pay gaps within a single company by making it more expensive for employers to provide high-level salaries that far exceed those of their entry-level staff. While the bill was introduced in 2005, it did not move past the initial committee stage and has not become law.