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One Humble Idea to Get our Economy Moving Again

15 points by bsbechtel 14y ago

tryitnow 14y ago
This is amusingly simple minded. Does the author not realize that it will just cause big pay cuts for the most highly compensated employees (not necessarily a bad thing). Corporations will cut CEO pay in order to pay lower corporate taxes. Why on earth would they increase pay across the board in order to decrease the highest paid:lowest paid ratio? This is basically an argument for cutting corporate taxes, which I don't entirely disagree with, but if that's what he wants to do he should just argue that on its own merits rather than coming up with a scheme that even brain dead tax accountant could get around.
waterside81 14y ago
Good thought & intentions however any rules put in place that can lower a firm's tax will be abused. If I'm the CEO under a regime where ratio of top to bottom earners determines tax for my firm, I take a $1 salary, and then get paid massively in options or some other income-but-not-really-income method. That's just off the top of my head, I'm sure there are other ways to skirt these sorts of rules.
molsongolden 14y ago
How will you define pay? Are we talking 300:1 W-2 wages? Should we(how will we) account for benefits, stock options, deferred compensation agreements, payments to corporations owned by employees, phantom stock agreements? All of these would need to be accounted for otherwise there are going to be loopholes left and right and they will be abused.
thaumaturgy 14y ago
I'm fairly socially liberal, and I would be in favor of a serious effort like this, except that it has nearly zero chance of working. The largest corporate tax contributors make an art out of avoiding paying any Federal taxes at all, let alone 35% [1]. Building a tax code that would close all of those loopholes without meeting tremendous political resistance is probably impossible -- especially since those loopholes are used by individuals with political influence. And how would you decide who is and isn't eligible for social assistance under such a program? Let's say that your program somehow moved the nearly $1.5 trillion dollars currently used for some form or another of social welfare directly into the pockets of a burgeoning middle class. Everybody's spending again, people are saving for retirement and college, angels bugle from the skies. However, the proposal only incentivizes wage increases [2]; what do you do for the poor shmucks that work for businesses that choose to not participate? To your credit, your idea is different from the usual fix-our-economy fare. Unfortunately it's just about as likely to work as a nationwide flat tax or simply taxing the rich more. [1]: http://www.huffingtonpost.com/2012/09/20/microsoft-taxes-profits-offshore_n_1901398.html http://www.huffingtonpost.com/2012/09/20/microsoft-taxes-pro..., http://blogs.suntimes.com/sweet/2011/03/ten_giant_us_companies_avoidin.html http://blogs.suntimes.com/sweet/2011/03/ten_giant_us_compani... [2]: Actually, it doesn't even do that. It just incentivizes making wages more balanced, which leaves corporations at least two other major loopholes: simply pay their top-level people less, or reward them in ways which would exempt them from the program's calculations.
blacksqr 14y ago
The plan only needs one addition: everyone gets a pony.

15 points by bsbechtel 14y ago

This is amusingly simple minded. Does the author not realize that it will just cause big pay cuts for the most highly compensated employees (not necessarily a bad thing). Corporations will cut CEO pay in order to pay lower corporate taxes. Why on earth would they increase pay across the board in order to decrease the highest paid:lowest paid ratio? This is basically an argument for cutting corporate taxes, which I don't entirely disagree with, but if that's what he wants to do he should just argue that on its own merits rather than coming up with a scheme that even brain dead tax accountant could get around.

waterside81 14y ago

Good thought & intentions however any rules put in place that can lower a firm's tax will be abused. If I'm the CEO under a regime where ratio of top to bottom earners determines tax for my firm, I take a $1 salary, and then get paid massively in options or some other income-but-not-really-income method. That's just off the top of my head, I'm sure there are other ways to skirt these sorts of rules.

molsongolden 14y ago

How will you define pay? Are we talking 300:1 W-2 wages? Should we(how will we) account for benefits, stock options, deferred compensation agreements, payments to corporations owned by employees, phantom stock agreements? All of these would need to be accounted for otherwise there are going to be loopholes left and right and they will be abused.

thaumaturgy 14y ago

I'm fairly socially liberal, and I would be in favor of a serious effort like this, except that it has nearly zero chance of working. The largest corporate tax contributors make an art out of avoiding paying any Federal taxes at all, let alone 35% [1]. Building a tax code that would close all of those loopholes without meeting tremendous political resistance is probably impossible -- especially since those loopholes are used by individuals with political influence. And how would you decide who is and isn't eligible for social assistance under such a program? Let's say that your program somehow moved the nearly $1.5 trillion dollars currently used for some form or another of social welfare directly into the pockets of a burgeoning middle class. Everybody's spending again, people are saving for retirement and college, angels bugle from the skies. However, the proposal only incentivizes wage increases [2]; what do you do for the poor shmucks that work for businesses that choose to not participate? To your credit, your idea is different from the usual fix-our-economy fare. Unfortunately it's just about as likely to work as a nationwide flat tax or simply taxing the rich more. [1]: http://www.huffingtonpost.com/2012/09/20/microsoft-taxes-profits-offshore_n_1901398.html http://www.huffingtonpost.com/2012/09/20/microsoft-taxes-pro..., http://blogs.suntimes.com/sweet/2011/03/ten_giant_us_companies_avoidin.html http://blogs.suntimes.com/sweet/2011/03/ten_giant_us_compani... [2]: Actually, it doesn't even do that. It just incentivizes making wages more balanced, which leaves corporations at least two other major loopholes: simply pay their top-level people less, or reward them in ways which would exempt them from the program's calculations.

blacksqr 14y ago

The plan only needs one addition: everyone gets a pony.