Obama's proposal reminded me of a suggestion I'd made in a college bull session discussing taxes and fairness about 40 years ago. I had suggested at the time that annual pay be capped at the salary for the president of the United States — $200,000 at the time. Any pay above that level would be taxed at 100 percent. My reasoning was that the president has the toughest, most important job in the United States, so it should be the highest-paying job in the country. At the time, I couldn't think of any reason why this wouldn't work. Either companies would limit excessive pay for top executives, thereby providing additional pay for R&D, worker wages and profits for shareholders, or the federal government would benefit from a surge in tax revenues from those multi-million-dollar paychecks taxed at 100 percent.
Obama's $500,000 cap is 25 percent more than the current salary for the president, $400,000, but the rationale is the same. Why should a bank president get more pay than the president of the United States? Does he have greater responsibility? Does he work harder? Do his decisions have greater impact? Are his decisions more important nationally or globally?
With another four decades of experience and maturity, I find some flaws in my long-ago collegiate reasoning. The president's compensation amounts to more than his salary. He gets a pretty nice house to live in, transportation, health care, retirement benefits, etc. And confiscatory tax rates probably do discourage innovation and economic risk-taking, as Republican tax-cutters have long argued. Confiscatory rates applied only to salaries and not other forms of compensation would shift compensation to untaxed or lower-taxed compensation.
Still, 40 years after I made the argument for capping salaries at the same level as the president's, it's interesting to see the new president make a quite similar proposal.
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4 comments:
....interesting? You are kidding, right? Did you or we expect anything diff from this student of Saul Alinsky?
http://visualwikipedia.com/en/Saul_Alinsky
Government owns us now. You will see.
and we have too many students of Alinsky in decision making roles today. a better info link of this socialistic theorist:
http://en.wikipedia.org/wiki/Saul_Alinsky
....but in reality it is the captialists and conservatives fault to allow the pendulum to swing too far to the right....greed has taken over.
I understand the philosophical argument -- the same as made by Babe Ruth when his salary exceeded the pres: "I had a better year." But, I think this is an astonishingly dangerous precedent. Can th eFeds also restrict where a bank advertises? Apparently so -- witness the pressure re Citi and the new stadium. Does this extend to ads on, say, Super Bowl Sunday (when rates are sky-high, but so is viewership)? The banks, as a group, have been many things negative; having the President set an income ceiling for anyone in their industry is also negative. And two wrongs do not make a right.
Interesting how the minions debate the King's fate. And scoff at a fair system that works (relatively) well in places like Israel and Scandinavia.
In other words, it's really a no brainer. Corporate dictatorships, oligarchies, plutocracies (All of which have been parading around the last 8 years under the guise of Democracy), will be the proverbial straw that breaks the camel's back.
Their little greed experiment, that you and I have subsidized, didn't work. For us.
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