Companies and their general counsel are closely following a new Portland, Oregon, tax that is based on the pay disparity between CEOs and average workers. This week Portland became the first in the U.S. to impose such a tax on about 550 businesses, but it could spread to other cities.

The contentious tax idea hits at a time when companies are already gearing up to comply with the U.S. Securities and Exchange Commission's pay ratio disclosure rules that go into effect on Jan. 1. Portland will base its tax on the numbers filed with the SEC.

Michael Stevens, a partner in Alston & Bird's employee benefits and executive compensation group in Atlanta, says the tax is largely symbolic. “It's a sort of sin tax like those on cigarettes, alcohol and other behaviors the government wants to discourage. Portland wants to discourage pay inequality,” he explains.