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why, with a higher tax rate, is it going to take any less to get the same executive on board? The difference is that with a pay cap, no matter where an executi

why, with a higher tax rate, is it going to take any less to get the same executive on board? The difference is that with a pay cap, no matter where an executive works, he gets paid the same. He has no incentive to compete against his peers. Within a high tax-bracket (with no pay cap), instead, executives have incentive to compete, because their salaries are able to differ from one-another.

katz 18y ago
Or executives may have an incentive to go to the UK or Australia. American companies compete with international companies for executives.
markwweaver 18y ago
The way I understood it, the pay cap is only for companies that take government money. So companies that are already in trouble are going to be the ones that can't attract the new executive talent they need to survive. If a company that takes government money can't turn itself around and still fails, then all the bailout did was postpone the failure - and the government loses its investment - a bad deal all around.
- gravitycop 18y ago
  the pay cap is only for companies that take government money. Yes, it is. Reed Hastings' proposal is, however, not just for companies that take government money. Perhaps a starting place for "tax, not shame" would be creating a top federal marginal tax rate of 50 percent on all income above $1 million per year. That isn't to imply that there are not healthier alternatives. Andrew W. Mellon advocated a flat income-tax rate of 10%: http://www.archive.org/stream/taxationthepeopl033026mbp/taxationthepeopl033026mbp_djvu.txt http://www.archive.org/stream/taxationthepeopl033026mbp/taxa... the Government received substantially the same revenue from high incomes with a 13% surtax as it received with a 65% surtax. It is not too much to hope that some day we may get back on a tax basis of 10%, the old Hebrew tithe, which was always considered a fairly heavy tax.

katz 18y ago

Or executives may have an incentive to go to the UK or Australia. American companies compete with international companies for executives.

markwweaver 18y ago

The way I understood it, the pay cap is only for companies that take government money. So companies that are already in trouble are going to be the ones that can't attract the new executive talent they need to survive. If a company that takes government money can't turn itself around and still fails, then all the bailout did was postpone the failure - and the government loses its investment - a bad deal all around.

gravitycop 18y ago
the pay cap is only for companies that take government money. Yes, it is. Reed Hastings' proposal is, however, not just for companies that take government money. Perhaps a starting place for "tax, not shame" would be creating a top federal marginal tax rate of 50 percent on all income above $1 million per year. That isn't to imply that there are not healthier alternatives. Andrew W. Mellon advocated a flat income-tax rate of 10%: http://www.archive.org/stream/taxationthepeopl033026mbp/taxationthepeopl033026mbp_djvu.txt http://www.archive.org/stream/taxationthepeopl033026mbp/taxa... the Government received substantially the same revenue from high incomes with a 13% surtax as it received with a 65% surtax. It is not too much to hope that some day we may get back on a tax basis of 10%, the old Hebrew tithe, which was always considered a fairly heavy tax.