(a) In general

Section 11 of the Internal Revenue Code of 1986 is amended by adding at the end the following:

(e) Tax rate of publicly traded corporations based on compensation ratio

(1) In general

In the case of a publicly traded corporation (as defined in section 162(m)(2)), in the amount of tax under subsection (b) shall be determined—

(A)

by adjusting the highest rate of tax applicable to the taxpayer by the percentage point adjustment specified in paragraph (2), and

(B)

by making proper adjustments to—

(i)

the dollar amount in clause (ii) of the second sentence of paragraph (1), and

(ii)

the dollar amount in clause (ii) of the third sentence of paragraph (1).

(2) Adjustment of tax rate

For purposes of paragraph (1), the percentage points specified in this paragraph shall be determined as follows:

If the compensation ratio is:	The percentage point adjustment is:
More than 100 but not more than 150	+0.5 percentage points
More than 150 but not more than 200	+1 percentage points
More than 200 but not more than 250	+1.5 percentage points
More than 250 but not more than 300	+2 percentage points
More than 300 but not more than 400	+2.5 percentage points
More than 400	+3 percentage points.

(3) Definitions

For purposes of this subsection—

(A) Compensation ratio

The term compensation ratio means, with respect to any taxable year, a ratio—

(i)

the numerator of which is the amount equal to the greater of the compensation of the chief executive officer or the highest paid employee of the taxpayer for the calendar year preceding the beginning of the taxable year, and

(ii)

the denominator of which is the amount equal to the median compensation of all employees employed by the taxpayer in the United States for the calendar year preceding the beginning of the taxable year.

(B) Compensation

(i) Employees

In the case of employees of the taxpayer other than the chief executive officer or the highest paid employee, the term compensation means wages (as defined in section 3121(a)) paid by the taxpayer during a calendar year.

(ii) CEO and highest paid employee

In the case of the chief executive officer and the highest paid employee of the taxpayer, the term compensation means total compensation for the calendar year, as reported in the Summary Compensation Table reported to the Securities and Exchange Commission pursuant to Item 402 of Regulation S–K of the Securities and Exchange Commission.

(4) Special rule if contracted or foreign employee ratio increases

(A) In general

If—

(i)

the total number of full-time employees, determined on an annual full-time equivalent basis, employed by the taxpayer in the United States for a taxable year is reduced by more than 10 percent, as compared to the total number of full-time employees, determined on an annual full-time equivalent basis, employed by the taxpayer in the United States for the preceding taxable year, and

(ii)

the total number of contracted employees or foreign full-time employees, determined on an annual full-time equivalent basis, of the taxpayer for that taxable year has increased, as compared with the total number of contracted employees or foreign full-time employees, determined on an annual full-time equivalent basis, of the taxpayer for the preceding taxable year,

then the applicable tax rate determined under paragraph (2) shall be increased by 50 percent. For taxpayers who first commence doing business during the taxable year, the number of full-time employees, contracted employees, and foreign full-time employees for the immediately preceding prior taxable year shall be zero.

(B) Definitions

For purposes of this paragraph—

(i) Annual full-time equivalent

The term annual full-time equivalent means—

(I)

in the case of a full-time employee paid hourly qualified wages, the total number of hours worked for the taxpayer by the employee, not to exceed 2,000 hours per employee, divided by 2,000, and

(II)

in the case of a salaried full-time employee, the total number of weeks worked for the taxpayer by the employee divided by 52.

(ii) Contracted full-time employee

The term contracted full-time employee means an individual engaged by the taxpayer to provide a specific set of services established pursuant to the terms and conditions of a written employment contract that delineates the length of employment, the salary and bonuses (if any) to be paid, and the benefits that accrue to that individual.

(iii) Foreign full-time employee

The term foreign full-time employee means a full-time employee of the taxpayer that is employed at a location other than the United States.

(iv) Full-time employee

The term full-time employee means an employee of the taxpayer that either—

(I)

is paid compensation by the taxpayer for services of not less than an average of 35 hours per week, or

(II)

is a salaried employee of the taxpayer and is paid compensation during the taxable year for full-time employment.

(5) Controlled groups

For purposes of this subsection, all persons treated as a single employer under subsection (b), (c), (m) or (o) of section 414 shall be treated as one person.

(6) Reports

The taxpayer shall furnish such reports to the Secretary with respect to compensation and such other matters as the Secretary may require. The reports required by this subsection shall be filed at such time and in such manner as may be required by the Secretary.

(7) Regulations

The Secretary shall prescribe such regulations and other guidance as may be necessary or appropriate to carry out this subsection, including any guidelines regarding the determination of wages, average compensation, and compensation ratio.

(b) Effective date

The amendment made by subsection (a) shall apply to taxable years beginning after the date of the enactment of this Act.

(a) Amendment

Chapter 47 of title 41, United States Code, is amended by inserting after section 4714 the following new section:

4715. Preference for entities with certain pay ratios

(a) Preference

In the evaluation of bids or proposals for a contract for the procurement of goods or services, the head of an executive agency shall provide a preference to an entity that for the previous calendar year has a compensation ratio of less than 50-to-1.

(b) Compensation ratio defined

In this section, the term compensation ratio has the meaning given that term in section 11(e)(3)(A) of the Internal Revenue Code of 1986, except the ratio determined for the calendar year preceding the calendar year of the contract to which this section applies.

(b) Clerical amendment

The table of sections at the beginning of such chapter is amended by inserting after the item relating to section 4714 the following new item: