DISQUS

Spencer Ackerman · 10 months ago

Half! It's like an Eddie Murphy routine.

Pete · 10 months ago

I agree, in general.

However, the Obama administration isn't talking about capping executive/CEO pay across the board. They're talking about capping pay for execs of failed/failing firms that are being bailed out at direct tax-payer expense.

For a company that is *not* receiving assistance from the federal government, sure--they should be able to pay their executives whatever they want. I think there's a reasonable argument to be made that the government then ought to tax the hell out of those highest income brackets.

But for failed companies who are now getting direct government assistance and investment, their executives ought to be held to account. Compensation caps imposed by the government are the best way to do this, as these executives have no other motivation to keep rewarding themselves for poor and short-sighted management at the expense of tax-payers.

Molly · 10 months ago

If you have a marginal tax rate that high on high earners, the spouse will have no incentive to participate in the labor market. In California, the spouse's income would be taxed at 50%; with state and payroll taxes included, the spouse would face over 60% taxation on (usually her) income. Perhaps Reed Hastings is married to a stay-at-home mother who doesn't care to work outside the home. That's his and his wife's business; however, his policy would impact women who want to use their lives, labor, and education (either during their children's childhoods or after they've left the nest) to further the economy. Reed Hasting's policy (and Obama's now jettisoned tax plan) would discourage a large number of educated people from contributing their labor and ideas to the economy. I don't expect most people care, because the wives of those earning over $250K seem to be viewed as trophy bimbos. Ironically, women constitute more and more of the labor force, but policymakers and the general public still speak of tax policy in 1950s terms.

Endy · 10 months ago

In the situation you bring up, the woman's primary motivation is not financial anyway, so why should the requirement to pay taxes make any difference? Or perhaps the women in question are so jaded that only the hollow competition of conspicuous consumption can motivate them to any action at all...
In any case, the catch here is an artifact of California's antiquated policy, and should be solved there. The rest of the country should not be required to sit on it's hands while Cali sorts itself out. Speaking of which, they're having some trouble deciding who should get married there anyway, so perhaps a system that imposes economic disincentives for people who get married (rather than just shacking up) would be a good thing.

Bruce · 10 months ago

What else isn't noted is that on the flip side, companies will end up paying double (in creative, indirect ways) the salaries to compensate for the taxes, regardless of the 'cap'. It ends up being a vicious circle... I don't understand why a simple flat tax isn't being discussed.

Ronnie Schreiber · 9 months ago

I wonder how Mr. Hastings would feel about a tax on his assets as opposed to his income. Rich liberals have no problem with higher income taxes because their incomes are only a fraction of their net worth, whereas for working class and middle class folks their income represents most of their wealth.

While a tax on wealth is probably unconstitutional, progressives don't usually object to getting around the plain meaning of the Constitution with penumbras and such.

It'd be fun to watch rich liberals anguish when the wealth that is being redistributed is their own.

How about a windfall profits tax on trial lawyers? Trial lawyers have driven up the price of nearly everything, particularly medical care. Since the trial lawyers established a precedent in the tobacco litigation that a legal industry can still be compelled to pay the government for the costs its products bring to bear on society, I say hoist the lawyers on their own petards.

Did you know that automakers spend more money on product liability, insuring and defending, than they do on assembly workers' wages?