6 ms·

Something must be done to rein in executive pay though. I am not talking about MM in particular. She is probably a fine executive. However, my point is that unc

by pooper 9y ago

Something must be done to rein in executive pay though. I am not talking about MM in particular. She is probably a fine executive. However, my point is that unchecked executive pay is not good for anyone. We don't live in a free market. There ought to be some way to cap pay. A progressive income tax that caps out at 90% of income above $3M a year? So if you make $3,000,001, you pay 90 cents in taxes on the last dollar you earned sounds fair to me.

tossaway1 9y ago
> income tax that caps out at 90% Kind of like it was in the 50s back when America was "great again"?
- rsync 9y ago
  I am obligated, any time these very high historical tax rates are mentioned, to point out that these were very special, very specific actions taken to discourage war profiteering during world war two. The extremely high marginal rates that did indeed exist were not implemented as part of a tax regime nor were they enacted to redistribute wealth - they were a patriotic wartime measure enacted to ensure nobody got rich on war contracts. They have almost no relation to our current discussion of tax rates and taxation.
  - tossaway1 9y ago
    Maybe so, I'm not an expert on such matters, but the highest tax rate was 50% or higher from 1932-1986. I would say that is relevant to our current discussion.
- valuearb 9y ago
  You realize that almost no one ever paid 90% or anything close to that, don't you? The tax code that had a 90% rate also had massive deductions.
jdmichal 9y ago
I think you would need to start taxing equity grants for that to have the effect you want. Otherwise, executives just won't sell more equity than $3m a year. And when they found new companies and non-profits, they'll just grant the equity directly and never have paid any personal taxes on it.
edanm 9y ago
"However, my point is that unchecked executive pay is not good for anyone. We don't live in a free market. There ought to be some way to cap pay." Why? To all those questions. I mean, in some specific cases you might be right, but in the case of shareholders, who own a company, deciding how much to pay to the executive that they choose to run that company, why would someone else need to be involved in that decision? Who is supposedly losing out here? The shareholders themselves? They (vicariously) own the money in the company, and choose how much of it to pay to the executive, because they believe that's the best way to make more money in the long run. Why do you think you know better than them, when they're actually betting money on it? Or is someone else being hurt here? Also, as far as I understand it, you're mixing two different things by proposing to "fix" this with an income tax. You said in the paragraph above that executive pay is not good for anyone, which I presumed to be about (or at least to include) the shareholders of the company. But by introducing taxing, you are quite literally talking about taking money from the shareholders and giving it to the government. So at least in this way of doing it, you're quite literally not protecting the shareholders but rather "harming" them. (This doesn't make income taxes bad or anything, I'm just pointing out that one thing they're not good for is to protect shareholdres, IMO).
- ebbv 9y ago
  The idea that shareholders own the company and are therefore good, objective arbiters of CEO pay sounds good on paper but even the simplest of examinations of how this functions in reality should tell you what the problems are. First, the board who decides the CEO pay are not objective. They are friends with the CEO. They are not objective. The social circles of boards of large companies and the CEOs they hire is not that big, and they do not think objectively about each other. Second, there's no real motive for them to be strict with the CEO; there's every motive to be overly generous. If they give the CEO ultra generous pay and bonuses, they then expect (and receive) to be treated in the same way when the shoe is on the other foot. When the CEO is on a board for a company they are an executive at. Executve pay has been on an insane runaway explosion for years. You can say "That's because the companies are so successful!" But Yahoo is evidence success has nothing to do with it. And I would argue even if it were due to success; the workers should be benefit at least as much as executives, and they don't.
analog31 9y ago
A progressive income tax that caps out at 90% of income above $3M a year? So if you make $3,000,001, you pay 90 cents in taxes on the last dollar you earned sounds fair to me. Sounds fair to me too. My attitude is that the CEO of a business is homo economicus. Their job is to grab as much value from the company as possible for themselves, just like every other shareholder, employee, supplier, customer, etc. It's none of my business how many billions they take home, but they should be taxed up the wazoo.
dsacco 9y ago
> However, my point is that unchecked executive pay is not good for anyone. We don't live in a free market. There ought to be some way to cap pay. Why? This is not an axiom, it's a conclusion. Defend the premise.
- pooper 9y ago
  > Why? This is not an axiom, it's a conclusion. Defend the premise. My basic premise is that shareholders do not have the tools to protect themselves from (to use inciting language) predatory management. Sometimes it looks like it works perfectly. Google seems to be doing just fine with a dual class arrangement and not all shares having the same voice. We have certain restrictions on freedom all the time. You may not consent to die* for example. I am not very good at explaining but the idea is that freedom of speech and freedom to carry arms have restrictions imposed on them. Even freedom to privacy is not absolute. I don't know what the legal words mean in practice but from what I've read even habeas corpus has the limitation of "unless when in cases of rebellion or invasion the public safety may require it". The point is that if all these rights are in some way capped, why can't the right to earn money and spend be capped as well? OK, I haven't answered your question so far. I don't have a good answer with formal proof. I just think an effective income cap is possible within our ethical/moral framework. * well this one is changing but I guess you could argue that the wording can be you cannot consent to die without adequate safeguards to make sure you know what you are consenting to.

by pooper 9y ago

tossaway1 9y ago

> income tax that caps out at 90% Kind of like it was in the 50s back when America was "great again"?

rsync 9y ago
I am obligated, any time these very high historical tax rates are mentioned, to point out that these were very special, very specific actions taken to discourage war profiteering during world war two. The extremely high marginal rates that did indeed exist were not implemented as part of a tax regime nor were they enacted to redistribute wealth - they were a patriotic wartime measure enacted to ensure nobody got rich on war contracts. They have almost no relation to our current discussion of tax rates and taxation.
- tossaway1 9y ago
  Maybe so, I'm not an expert on such matters, but the highest tax rate was 50% or higher from 1932-1986. I would say that is relevant to our current discussion.
valuearb 9y ago
You realize that almost no one ever paid 90% or anything close to that, don't you? The tax code that had a 90% rate also had massive deductions.

jdmichal 9y ago

I think you would need to start taxing equity grants for that to have the effect you want. Otherwise, executives just won't sell more equity than $3m a year. And when they found new companies and non-profits, they'll just grant the equity directly and never have paid any personal taxes on it.

edanm 9y ago

"However, my point is that unchecked executive pay is not good for anyone. We don't live in a free market. There ought to be some way to cap pay." Why? To all those questions. I mean, in some specific cases you might be right, but in the case of shareholders, who own a company, deciding how much to pay to the executive that they choose to run that company, why would someone else need to be involved in that decision? Who is supposedly losing out here? The shareholders themselves? They (vicariously) own the money in the company, and choose how much of it to pay to the executive, because they believe that's the best way to make more money in the long run. Why do you think you know better than them, when they're actually betting money on it? Or is someone else being hurt here? Also, as far as I understand it, you're mixing two different things by proposing to "fix" this with an income tax. You said in the paragraph above that executive pay is not good for anyone, which I presumed to be about (or at least to include) the shareholders of the company. But by introducing taxing, you are quite literally talking about taking money from the shareholders and giving it to the government. So at least in this way of doing it, you're quite literally not protecting the shareholders but rather "harming" them. (This doesn't make income taxes bad or anything, I'm just pointing out that one thing they're not good for is to protect shareholdres, IMO).

ebbv 9y ago
The idea that shareholders own the company and are therefore good, objective arbiters of CEO pay sounds good on paper but even the simplest of examinations of how this functions in reality should tell you what the problems are. First, the board who decides the CEO pay are not objective. They are friends with the CEO. They are not objective. The social circles of boards of large companies and the CEOs they hire is not that big, and they do not think objectively about each other. Second, there's no real motive for them to be strict with the CEO; there's every motive to be overly generous. If they give the CEO ultra generous pay and bonuses, they then expect (and receive) to be treated in the same way when the shoe is on the other foot. When the CEO is on a board for a company they are an executive at. Executve pay has been on an insane runaway explosion for years. You can say "That's because the companies are so successful!" But Yahoo is evidence success has nothing to do with it. And I would argue even if it were due to success; the workers should be benefit at least as much as executives, and they don't.

analog31 9y ago

A progressive income tax that caps out at 90% of income above $3M a year? So if you make $3,000,001, you pay 90 cents in taxes on the last dollar you earned sounds fair to me. Sounds fair to me too. My attitude is that the CEO of a business is homo economicus. Their job is to grab as much value from the company as possible for themselves, just like every other shareholder, employee, supplier, customer, etc. It's none of my business how many billions they take home, but they should be taxed up the wazoo.

dsacco 9y ago

> However, my point is that unchecked executive pay is not good for anyone. We don't live in a free market. There ought to be some way to cap pay. Why? This is not an axiom, it's a conclusion. Defend the premise.

pooper 9y ago
> Why? This is not an axiom, it's a conclusion. Defend the premise. My basic premise is that shareholders do not have the tools to protect themselves from (to use inciting language) predatory management. Sometimes it looks like it works perfectly. Google seems to be doing just fine with a dual class arrangement and not all shares having the same voice. We have certain restrictions on freedom all the time. You may not consent to die* for example. I am not very good at explaining but the idea is that freedom of speech and freedom to carry arms have restrictions imposed on them. Even freedom to privacy is not absolute. I don't know what the legal words mean in practice but from what I've read even habeas corpus has the limitation of "unless when in cases of rebellion or invasion the public safety may require it". The point is that if all these rights are in some way capped, why can't the right to earn money and spend be capped as well? OK, I haven't answered your question so far. I don't have a good answer with formal proof. I just think an effective income cap is possible within our ethical/moral framework. * well this one is changing but I guess you could argue that the wording can be you cannot consent to die without adequate safeguards to make sure you know what you are consenting to.