I like the idea of building in greater alignment of incentives between all the workers at the company, from the lowest worker to the top.
By all means CEOs should be highly paid, but if the company is successful and doing well, the workers that are enabling that success should see their fortunes rise as well.
It’s a balance. A 100x pay gap between employee and ceo is close to a 1000x gap in disposable income. How many ceos are truly better than 1000 employees?
I think it's better to ask "what percentage of an employee's output is attributable to the ceo's leadership?"
A reasonable answer, IMO, would be somewhere between 0.5% and 5%. The average CEO gets maybe 1%, which I think is pretty fair.
Often if a CEO makes 1000x an employee, it's because there are tens or hundreds of thousands of employees under them. The executives still get a relatively small portion of employee output.
I must say though that being more valuable than 1000 employees seems like a very low bar to me. I'm sure there are many people who are more valuable than even 100,000 employees.
Quite a lot I would say. A CEO is making daily decisions, any one of which could be be the start of a company’s death spiral that results in tens of thousands of job losses. The amount of leverage they have over a company dwarfs that of any other individual worker.
Besides what should I care what they earn if they pay me well for what I do, relative to the market?
This is lazy, greedy socialist thinking where they want money for nothing’s
I don't see this addressed in the article, but maybe Canadian working culture is different than the US:
Wouldn't this create a perverse incentive for companies to continue the trend of eliminating their lowest-wage employees from the books, either via contractors or automation?
You're reading about the efforts of the third place political party's leader to get attention so people remember he exists, since politically all he does is prop up the existing minority Liberal government.
This is purely for the headlines/clicks so people remember he's there and so he can pretend he does something.
the irony with this (as with all such laws) is that all you have to do is ask a mathematician to give you a function that is maximally un-manipulatable in this way, and the law would immediately be much harder to game.
but instead we insist on writing all our laws as though the only tools available to us are +-÷×, and people who recall middle school math can find ways to game them.
Assuming a roughly continuous distribution, unless >50% of workers earn the lowest wage, increasing the wage of the lowest-paid worker will do nothing to affect the wage of the median worker, and thus nothing to change the ratio in question.
On the other hand, no longer employing the lowest-paid workers will move the median point up the pay scale.
I don't think headline-grabbing CEO pay differences from the average worker are the thing driving broad based economic inequality in our economies today. Cutting the salaries of every CEO and redistributing it to their company workers would hardly give every employee an extra $1,000 at most places.
Economic inequality springs from (among other things) the fact that each and every one of us chooses to buy things & engage in our economy which has gotten more and more efficient, and reward a few hundred thousands (or millions) of people who happen to be able to produce disproportionately more things that the rest of the population will pay for and reward them for. I'm not saying they're deserving of it or anything like that, just to say that's what it is (or part of it). And I'm not addressing the asshole PE CEOs which are a different breed of leech, but are their own sliver of headline-dominating but not significant to the general population's wealth concerns.
At the same time, efficiency and labor supply means that low skill wages have not moved much.
You're not going to defeat these economic tides by handicapping a couple of CEOs, as much as that might feel gratifying or even politically symbolically meaningful.
We each of us have made the economic inequality that we sit in. And I might also point out, what is at the bottom of our economic ladder is still in an absolute sense, well above what is the bottom of the ladder in many, many other countries, in material wealth and security.
> redistributing it to their company workers would hardly give every employee an extra $1,000 at most places
You're ignoring secondary effects, which are hugely important here.
An economist (maybe Brad Delong?) pointed out that one of the things that's changed in recent decades is that even among rich people there's more inequality. A rich person is likely to know somebody way richer, which scales their expectations up. People, being primates, tend to be status driven, so relative wealth drives a lot of behavior.
If we get CEO pay down, everybody else is going to be more chill about pay, because they'll feel less behind the Joneses.
That's why our forefathers figured out antitrust laws, that we stopped enforcing around early 2000s.
If there are 10 companies competing for the same market instead of 1-2, that's 5x more CEOs, 5x more accountants, 5x more engineers, much less inequality, and much more chances of actual innovation.
Cracking down on CEOs who perform disastrously and then cut staff while paying themselves giant bonuses is no more about funding the treasury than slamming mega-billionaires with some punitive tax: taxes (at the federal level in a nation-state that denominates its sovereign debt in its current) aren’t first-order about generating revenue, they’re first-order about creating incentives.
The IRS is trying to incinerate dollars at something like the rate the Fed generates them, which is not a bad system (you’ll notice how many people invented the “gold sink” in game economies). Keeping deficit spending inside some tolerance is about sovereign debt auctions, not like, running out of green ink.
The argument for not doing this kind of shit is that no one will work hard or innovate if there isn’t permanent dynastic wealth and legal immunity as an incentive: wrong. People will work insanely hard for mere absurd luxury and favorable treatments by the courts.
You punitively tax this stuff to make “wannabe serial killer” seem like a comparatively attractive job opportunity vis-a-vis CEO of Herman Miller.
>taxes (at the federal level in a nation-state that denominates its sovereign debt in its current) aren’t first-order about generating revenue, they’re first-order about creating incentives.
Income taxes makes up 50% of federal tax receipts, and disincentivize productive individuals from working by taxing their income more. According to your theory, income taxes aren't there to collect revenue, they're to... incentivize people to work less?
> and reward a few hundred thousands (or millions) of people who happen to be able to produce disproportionately more things that the rest of the population will pay for and reward them for.
To be accurate, these people don't produce anything themselves. The labor that goes into creating the products and services is what's producing things. These people move capitol around. The boards of directors of the corporations that employ them are populated by other people like them. They're all a group who primarily are in the same occupation, and have a vested interest in seeing coordinators of capitol be paid extremely generously.
Compare this with CEO salaries in Scandinavia or Japan, which are significantly lower and yet their companies are highly competitive.
My theory is that this country never got over its yearning for a stratified class system, with a full-blown landed aristocracy and monarchy. We have a little taste of class mobility, but as soon as people move up the ladder they frantically scramble to pull it up behind them.
I do see the value in paying high performing individuals but there has to be some moderation even in that. The CEO pay gap is now obscene.
The CEO pay gap in the US was 399x that of the average worker! that is ludicrous! What that means is that if that company cut the pay for the CEO by half, it would leave enough money on the table to pay about 200 new hires at the average salary - which may bring down the number of hours each person currently works.. or if you decide to just pay employees a bit more, they may be able to meet their expenses a lot easier.
And a few years later your have no job and no income, because anyone with any entrepreneurial bent would have moved somewhere else where they're not going to have all their wealth stolen in the name of a bunch of entitled, envious graspers, and there'd be no more new job or business creation in your country.
Even an extra $100 is fine. If it requires no extra effort, then why not.
Will anyone say no to something that's "free"? Assuming it's electronically transferred no interaction is even required.
Even if you asked a billionaire if they'd like an extra dollar, are we expecting them to say "no, my account is too full - don't you dare put it in!". !?
This is actually why a lot of people say the left and the right are the same and just give up - I'm one of those people. They're different in different ways, and crazy about different issues, and lie about different things, however the methods are the same.
CEO salaries are actually not that high. All these claims of the high salaries lie by calling total compensation "salary." Some of that is options, some of that is stock. Bernie is great at that, making inflamatory tweets designed to make people angry - like claiming trillions were made by the top 1% during covid. And this angers people. What he doesn't say is that he's lying. Some stocks went up. Heck, the value of my used car during covid went up. Did I make money? Heck no.
What we're talking about here, is taxing unrealized capital gains. What the left does, is lie to a bunch of financially-a-doorknob cashiers, teenagers, and poor people to make them angry and violent. Well guess what, after some of these stocks went up during covid, they crashed. So are we giving back billions in tax refunds after taxing those unrealized cap gains? Bernie seems to be suspiciously quiet about that. Instead he's now yelling how oil companies are making record profits.
Of course when the left says "record profits" that means they're comparing them to some other periods of profits - and they are. They are comparing them to the profits oil companies made during covid lockdowns, when an oil barrel had negative cost because no one was driving or flying.
There are huge compensation difference between the average worker and CEO. The reason CEOs are given huge stock options, is because their income then depends directly on the company value, so it's in their interest to drive it up. The compensation of a cashier does not depend on company value, so he doesn't get those options - he gets minimum wage.
Then the left goes "you can't live on minimum wage" - and they're right. And the cashier doesn't have to. He's a 16yo kid who lives with his parents. People under 25 - school and college, make up half of minimum wage earners. Of those, only 5% of teenagers made minimum wage, and only 1% of people over 25 do. Keep in mind, minimum wage federally, is a lower bound - it's what you get in a small town in iowa where rent is $400 for a studio. In other places where it costs more to live, local minimum wage laws make it higher - like $15.
But that's not how it's presented. It's presented like minimum wage earners are supporting families, and make $7.50/hr in NYC. This is a lie.
But let's say it's not. Why is it up to a corporation to make sure people make enough to support themselves? Why is it up to a corporation to pay for a mother's time off when she has a kid? What in the world does a company making gaskets have to do with Wendy having a baby?
These tasks are up to society, which needs to redistribute money so no one is in dire need, and no one is left behind. Taxes need to go up - not just on the rich CEOs, but on the middle class and especially the corporations. And the corporations need to be left alone to pay employees their market rate - even if it's $3/hr. Our issue is, we are assigning social support tasks to corporations making gaskets, and social support is not a company's responsibility. Neither is making sure the CEO compensation is closer to the average worker's. They're a private entity, they can do whatever they want. The gov shouldn't dictate to a company who should get paid what. They need to tax that company, put the money into a pool, and distribute it back to the people to make sure we are all well.
I don't understand your argument, somehow you are saying the claims are conflating salary and compensation. But the very article we are discussing quotes Singh:
>"At the very same time, the CEOs of the companies they work for are making more salary, making more compensation than they've ever made before."
Moreover to claim that other compensation (you call it unrealised capital gains, how do you know they are unrealised, at least part of them are realised), is not contributing to the" pay gap" seems to me a much bigger lie. And yes the pay gap has largely increased because execs are given much higher stock packages, but it is still an increase in compensation, effectively they are being given more value while normal workers salaries have stagnated.
So you argue that the CEO salary depends on stock options so he is interested to drive the company value up. Well lots of exec emails claim that all those workers should be doing their best because they are crucial for the company, but they are never given the same sort of options. Why should regular workers not get stock options amounting to potentially 100s of times their regular salary, just like the CEO?
> Taxes need to go up... especially [on] the corporations
This is a bit complicated. What does it mean to "tax a corporation"? Do you tax revenue (even on unprofitable companies)? Do you tax profits (when Finance can instead divert profits to stock buybacks etc.)? Do you tax assets (even illiquid ones)? It's difficult to touch this without unintended poor consequences.
It's better to tax personal assets above an exempted minimum, plus capital gains taxes. Allow tax-free: up to x acres of land, 1 apartment up to $x million (indexed to inflation) in value, x% ownership in enterprises valued at $x million or less, etc., then tax the rest annually at x%. As a matter of policy, balancing this against the illiquidity of assets is then a question of the size of the assets, asset types, cash flow of the illiquid asset, other liquidity in an individual's portfolio, etc.
Does this mean that some of those assets will need to be sold or diluted to either pay or reduce the tax bill? Yes, but that's the societal good, because it dilutes the concentration of capital.
> Economic inequality springs from (among other things) the fact that each and every one of us chooses to buy things & engage in our economy
It's a delusion to imagine that everyone could choose to go live in the woods and revert to a subsistence lifestyle. For most people, there's no meaningful alternative.
It is also impractical to take the middle ground, i.e. start your own division of labor because the regulations have been written with a ridiculous minimum amount of division of labor in mind. I mean go ahead and try starting a tiny community with its own currency and banks. You won't get regulatory approval and even if you do it will cost so much you need ten thousand people to join you.
In that world, specifically Europe, people have gotten much richer but economic inequality isn’t through the roof like it is in the Anglophone countries.
That disproves the idea that it’s some sort of natural law that has led to the massive rise in inequality in Anglophone countries as opposed to deliberate policy choices.
It’s really fascinating seeing Americans, whether on the left or the right discuss issues in the US. At least 80% of the claims and arguments can be dismissed by simply looking at the rest of the world.
Yes, if you want to lay around, not do much, and have an average life, Europe is great. If you strive for more, the US is a much better place to achieve that.
Europeans move to the US to start companies. Americans move to Europe to retire.
> our economy which has gotten more and more efficient, and reward a few hundred thousands (or millions) of people who happen to be able to produce disproportionately more things
And where do the heirs expropriating surplus labor time from those of us who work fit into this constellation of efficient people able to produce more? Where does the aristocracy of the Rockefeller/Vanderbilt/Hearst/Mellon dynasties come into this inequality picture?
Who are these aristocrats running these companies that dominate your belief in what the problem is?
Tim Cook, Sundar Pichai, Satya Nadella, Carl McMillon (Walmart), Jamie Dimon, John Stanken (AT&T), John Hammergren (McKesson), just to take a random sampling of top companies going down the list. I find that they're all from non-rich dynasty beginnings.
So do we go making policies based on your stories about children of robber barons?
That's not as contradictory as you think. Having an inheritance tax neatly solves the issue you raise without having to alter the parent's proposition.
Or, CEOs receive 50k/yr compensation, but the company will approve a certain discretionary spending amount every year to cover living expenses for the CEO. This may or may not include dining at the most expensive restaurants around, free travel to anywhere with any arbitrary amount of number of people, house purchases, luxury spending like a yacht... No, these are not regular compensation. We are simply subsidizing the living expenses. There is no concrete amount involved. No sir.
Or pick any other number of convoluted schemes to mask "compensation". Best way to do this is the easiest way, raise the corporate tax directly.
> According to an NDP news release, the tax increase would be 0.5 per cent if a CEO makes 50 to 100 times the median income of workers, and would rise to a five per cent increase if a CEO makes a salary 500 times or more higher than the median income of workers.
Doesn’t this seem kind of… tame to the point if nothing? Do it right!
I’d want to see something like +10% for the lowest ratio up to say +50% for someone making 1000x their workers. And of course it needs to be total (including deferred) comp so they can’t avoid it with obvious accounting shenanigans.
I’m past the point of wanting to make the rich pay their fair share. The wealth gap is too wide for that to help. I think it’s time to start talking about clawing back the wealth they’ve accumulated.
>’m past the point of wanting to make the rich pay their fair share
How much is "their fair share" then? They already pay more taxes than someone who's not rich; how's it even fair for them to be punished for their success like that? Are you sure you're not just motivated by ego and envy; you can't possibly imagine that someone else legitimately produced a lot more value than you, so the only way to protect your ego is to view any gains of anyone significantly richer than you as unearned?
This is a huge flaw with the legal system in general. I wish we could somehow encode the spirit of the law instead of trying to use a shitty language (Legalese English) to fully specify it, since we all know it's futile.
Sounds like it would be a great lesson in unintended consequences:
- it would punish low skill industries over high skill industries; the PE shop of a dozen people where the lowest paid worker makes $500,000 doesn't have to worry, but the retail chain with 100,000 employees is going to be hit hard
- provides a strong incentive to outsource low paying jobs, rather than bringing them in house, or come up with other corporate structures (franchises for retail operations, move headquarters out of the country) to avoid having low paying employees on corporate payroll
Completely unsurprising suggestion by the NDP who has never been elected to lead the country before, so tends to have a ton of half-baked populist ideas that don't appear to be thought through very well and will never actually be implemented, but are very good at attracting voters.
You do realize low paying jobs are already rapidly being outsourced... right? This at the very least secures liveable wages for a substantial group of people. We can do more, but the argument that this shouldn't be done because this would negatively affect low paying jobs which are already horrifically negatively impacted while we do nothing, is an absurd argument to hold.
> Sounds like it would be a great lesson in unintended consequences
If you look into the history of progressive taxation in the US this holds true. When they got rid of it (lowered taxes) the government took in more tax dollars because it was cheaper to just pay the taxes instead of paying to not give 90% (or whatever the highest bracket really was) of your income to the government.
But companies don't set the pay for contractors, they pay contracting firms a lump sum for services. And contracts are basically every single service the company may need, whether business related or unrelated like gardening, trash pick up, snow removal, etc.
If a company hires an outside company to come pick up their garbage, do the garbage men also count? What happens when they switch vendors, do they report that back to the government? What happens if the outside firm gives their employees a raise? Does that get reported back to the main company, who then informs the government?
What if they hire an outside firm for only 1 month, does that count?
Who tracks all this? How does it get reported to the government?
That sounds like a massive regulatory mess and burden which of which the cost will be passed to customers.
Yeah. Make it include all direct and indirect employees. Outsourcing to a 3rd world country for pennies on the dollar? Great, enjoy your massive tax bill.
I feel as though if a corporation is hoarding billions of dollars worth of wealth (without reinvesting it or doing something positive to the economy with it) then I do think society should incentivize them by taxing the hoard.
Corporate taxes are a hacky workaround for the game-able system of individual income taxes (specifically game-able at the rich level via things like real estate depreciation, art valuation, etc). And also game-able via the buy-borrow-die strategy.
We want to slow down the natural growth of inequality - it grows because the economies of scale that are available today lead to many natural monopolies which were not possible in the past, and because people closer to the source of money get more than others via the Cantillon Effect - not because of anything special that they did per se.
The problem is this is a fundamental misunderstanding of the actual problem. If anything, high ceo pay just tells you the board has been captured by the ceo because shareholding is too dispersed to form a coherent line to push back from and discipline the board by firing them when they overpay the ceo. This isn't a problem, this is actually usually great because ceos are often not old wealth, it is bringing middle class and upper middle class kids that made it into the 1% or 0.1%. That there is so much profit for a ceo to take if they can capture the board is because of the actual problem. The actual problem is structural in two parts, the first part is integrating third world labor has blown a hole in labors pricing power and will continue to do so for another couple generations but should sort itself out. The second part is government has failed at breaking up companies with excess market power and that problem needs people like singh to pull their heads out of their asses and fix it. Unfortunately singh doesn't even comprehend the real problem and that makes him unfit to lead.
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By all means CEOs should be highly paid, but if the company is successful and doing well, the workers that are enabling that success should see their fortunes rise as well.
A reasonable answer, IMO, would be somewhere between 0.5% and 5%. The average CEO gets maybe 1%, which I think is pretty fair.
Often if a CEO makes 1000x an employee, it's because there are tens or hundreds of thousands of employees under them. The executives still get a relatively small portion of employee output.
I must say though that being more valuable than 1000 employees seems like a very low bar to me. I'm sure there are many people who are more valuable than even 100,000 employees.
Wouldn't this create a perverse incentive for companies to continue the trend of eliminating their lowest-wage employees from the books, either via contractors or automation?
This is purely for the headlines/clicks so people remember he's there and so he can pretend he does something.
but instead we insist on writing all our laws as though the only tools available to us are +-÷×, and people who recall middle school math can find ways to game them.
If you assume that may be true, it makes a lot more sense IMO.
Or coop is 9:1 ratio between highest to lowest
So if you want to suggest we increase CEO pay to 1M then helper pay would go up to 111,000 which would be great but generally hard to justify.
On the other hand, no longer employing the lowest-paid workers will move the median point up the pay scale.
Economic inequality springs from (among other things) the fact that each and every one of us chooses to buy things & engage in our economy which has gotten more and more efficient, and reward a few hundred thousands (or millions) of people who happen to be able to produce disproportionately more things that the rest of the population will pay for and reward them for. I'm not saying they're deserving of it or anything like that, just to say that's what it is (or part of it). And I'm not addressing the asshole PE CEOs which are a different breed of leech, but are their own sliver of headline-dominating but not significant to the general population's wealth concerns.
At the same time, efficiency and labor supply means that low skill wages have not moved much.
You're not going to defeat these economic tides by handicapping a couple of CEOs, as much as that might feel gratifying or even politically symbolically meaningful.
We each of us have made the economic inequality that we sit in. And I might also point out, what is at the bottom of our economic ladder is still in an absolute sense, well above what is the bottom of the ladder in many, many other countries, in material wealth and security.
You're ignoring secondary effects, which are hugely important here.
An economist (maybe Brad Delong?) pointed out that one of the things that's changed in recent decades is that even among rich people there's more inequality. A rich person is likely to know somebody way richer, which scales their expectations up. People, being primates, tend to be status driven, so relative wealth drives a lot of behavior.
If we get CEO pay down, everybody else is going to be more chill about pay, because they'll feel less behind the Joneses.
What we don't seem to have is enough people embarrassed about being wildly wealthy compared to others. We need more Mackenzie Scotts.
No single human needs a billion dollars. The end.
If there are 10 companies competing for the same market instead of 1-2, that's 5x more CEOs, 5x more accountants, 5x more engineers, much less inequality, and much more chances of actual innovation.
The IRS is trying to incinerate dollars at something like the rate the Fed generates them, which is not a bad system (you’ll notice how many people invented the “gold sink” in game economies). Keeping deficit spending inside some tolerance is about sovereign debt auctions, not like, running out of green ink.
The argument for not doing this kind of shit is that no one will work hard or innovate if there isn’t permanent dynastic wealth and legal immunity as an incentive: wrong. People will work insanely hard for mere absurd luxury and favorable treatments by the courts.
You punitively tax this stuff to make “wannabe serial killer” seem like a comparatively attractive job opportunity vis-a-vis CEO of Herman Miller.
Income taxes makes up 50% of federal tax receipts, and disincentivize productive individuals from working by taxing their income more. According to your theory, income taxes aren't there to collect revenue, they're to... incentivize people to work less?
[1] https://www.taxpolicycenter.org/briefing-book/what-are-sourc...
To be accurate, these people don't produce anything themselves. The labor that goes into creating the products and services is what's producing things. These people move capitol around. The boards of directors of the corporations that employ them are populated by other people like them. They're all a group who primarily are in the same occupation, and have a vested interest in seeing coordinators of capitol be paid extremely generously.
Compare this with CEO salaries in Scandinavia or Japan, which are significantly lower and yet their companies are highly competitive.
My theory is that this country never got over its yearning for a stratified class system, with a full-blown landed aristocracy and monarchy. We have a little taste of class mobility, but as soon as people move up the ladder they frantically scramble to pull it up behind them.
Are they? Those countries trail the US when it comes to labor productivity.
The CEO pay gap in the US was 399x that of the average worker! that is ludicrous! What that means is that if that company cut the pay for the CEO by half, it would leave enough money on the table to pay about 200 new hires at the average salary - which may bring down the number of hours each person currently works.. or if you decide to just pay employees a bit more, they may be able to meet their expenses a lot easier.
And getting 200 new jobs in a 100,000 employee company won’t even move the needle.
Will anyone say no to something that's "free"? Assuming it's electronically transferred no interaction is even required.
Even if you asked a billionaire if they'd like an extra dollar, are we expecting them to say "no, my account is too full - don't you dare put it in!". !?
CEO salaries are actually not that high. All these claims of the high salaries lie by calling total compensation "salary." Some of that is options, some of that is stock. Bernie is great at that, making inflamatory tweets designed to make people angry - like claiming trillions were made by the top 1% during covid. And this angers people. What he doesn't say is that he's lying. Some stocks went up. Heck, the value of my used car during covid went up. Did I make money? Heck no.
What we're talking about here, is taxing unrealized capital gains. What the left does, is lie to a bunch of financially-a-doorknob cashiers, teenagers, and poor people to make them angry and violent. Well guess what, after some of these stocks went up during covid, they crashed. So are we giving back billions in tax refunds after taxing those unrealized cap gains? Bernie seems to be suspiciously quiet about that. Instead he's now yelling how oil companies are making record profits.
Of course when the left says "record profits" that means they're comparing them to some other periods of profits - and they are. They are comparing them to the profits oil companies made during covid lockdowns, when an oil barrel had negative cost because no one was driving or flying.
There are huge compensation difference between the average worker and CEO. The reason CEOs are given huge stock options, is because their income then depends directly on the company value, so it's in their interest to drive it up. The compensation of a cashier does not depend on company value, so he doesn't get those options - he gets minimum wage.
Then the left goes "you can't live on minimum wage" - and they're right. And the cashier doesn't have to. He's a 16yo kid who lives with his parents. People under 25 - school and college, make up half of minimum wage earners. Of those, only 5% of teenagers made minimum wage, and only 1% of people over 25 do. Keep in mind, minimum wage federally, is a lower bound - it's what you get in a small town in iowa where rent is $400 for a studio. In other places where it costs more to live, local minimum wage laws make it higher - like $15.
But that's not how it's presented. It's presented like minimum wage earners are supporting families, and make $7.50/hr in NYC. This is a lie.
https://www.bls.gov/opub/reports/minimum-wage/2020/home.htm
But let's say it's not. Why is it up to a corporation to make sure people make enough to support themselves? Why is it up to a corporation to pay for a mother's time off when she has a kid? What in the world does a company making gaskets have to do with Wendy having a baby?
These tasks are up to society, which needs to redistribute money so no one is in dire need, and no one is left behind. Taxes need to go up - not just on the rich CEOs, but on the middle class and especially the corporations. And the corporations need to be left alone to pay employees their market rate - even if it's $3/hr. Our issue is, we are assigning social support tasks to corporations making gaskets, and social support is not a company's responsibility. Neither is making sure the CEO compensation is closer to the average worker's. They're a private entity, they can do whatever they want. The gov shouldn't dictate to a company who should get paid what. They need to tax that company, put the money into a pool, and distribute it back to the people to make sure we are all well.
>"At the very same time, the CEOs of the companies they work for are making more salary, making more compensation than they've ever made before."
Moreover to claim that other compensation (you call it unrealised capital gains, how do you know they are unrealised, at least part of them are realised), is not contributing to the" pay gap" seems to me a much bigger lie. And yes the pay gap has largely increased because execs are given much higher stock packages, but it is still an increase in compensation, effectively they are being given more value while normal workers salaries have stagnated.
So you argue that the CEO salary depends on stock options so he is interested to drive the company value up. Well lots of exec emails claim that all those workers should be doing their best because they are crucial for the company, but they are never given the same sort of options. Why should regular workers not get stock options amounting to potentially 100s of times their regular salary, just like the CEO?
> Taxes need to go up... especially [on] the corporations
This is a bit complicated. What does it mean to "tax a corporation"? Do you tax revenue (even on unprofitable companies)? Do you tax profits (when Finance can instead divert profits to stock buybacks etc.)? Do you tax assets (even illiquid ones)? It's difficult to touch this without unintended poor consequences.
It's better to tax personal assets above an exempted minimum, plus capital gains taxes. Allow tax-free: up to x acres of land, 1 apartment up to $x million (indexed to inflation) in value, x% ownership in enterprises valued at $x million or less, etc., then tax the rest annually at x%. As a matter of policy, balancing this against the illiquidity of assets is then a question of the size of the assets, asset types, cash flow of the illiquid asset, other liquidity in an individual's portfolio, etc.
Does this mean that some of those assets will need to be sold or diluted to either pay or reduce the tax bill? Yes, but that's the societal good, because it dilutes the concentration of capital.
In the US? You have far right and right. There's no left.
It's a delusion to imagine that everyone could choose to go live in the woods and revert to a subsistence lifestyle. For most people, there's no meaningful alternative.
In that world, specifically Europe, people have gotten much richer but economic inequality isn’t through the roof like it is in the Anglophone countries.
That disproves the idea that it’s some sort of natural law that has led to the massive rise in inequality in Anglophone countries as opposed to deliberate policy choices.
It’s really fascinating seeing Americans, whether on the left or the right discuss issues in the US. At least 80% of the claims and arguments can be dismissed by simply looking at the rest of the world.
Europeans move to the US to start companies. Americans move to Europe to retire.
And where do the heirs expropriating surplus labor time from those of us who work fit into this constellation of efficient people able to produce more? Where does the aristocracy of the Rockefeller/Vanderbilt/Hearst/Mellon dynasties come into this inequality picture?
Tim Cook, Sundar Pichai, Satya Nadella, Carl McMillon (Walmart), Jamie Dimon, John Stanken (AT&T), John Hammergren (McKesson), just to take a random sampling of top companies going down the list. I find that they're all from non-rich dynasty beginnings.
So do we go making policies based on your stories about children of robber barons?
Or, CEOs receive 50k/yr compensation, but the company will approve a certain discretionary spending amount every year to cover living expenses for the CEO. This may or may not include dining at the most expensive restaurants around, free travel to anywhere with any arbitrary amount of number of people, house purchases, luxury spending like a yacht... No, these are not regular compensation. We are simply subsidizing the living expenses. There is no concrete amount involved. No sir.
Or pick any other number of convoluted schemes to mask "compensation". Best way to do this is the easiest way, raise the corporate tax directly.
In European countries with high tax rates it's common for fairly low level employees to get a company -paid car and other perks that reduce the taxable income: https://humancapital.aon.com/insights/articles/2016/car-allo...
But it's not common practice in the US, which has a more car centric culture. Probably means there's no tax advantage there.
Doesn’t this seem kind of… tame to the point if nothing? Do it right!
I’d want to see something like +10% for the lowest ratio up to say +50% for someone making 1000x their workers. And of course it needs to be total (including deferred) comp so they can’t avoid it with obvious accounting shenanigans.
How much is "their fair share" then? They already pay more taxes than someone who's not rich; how's it even fair for them to be punished for their success like that? Are you sure you're not just motivated by ego and envy; you can't possibly imagine that someone else legitimately produced a lot more value than you, so the only way to protect your ego is to view any gains of anyone significantly richer than you as unearned?
BUT.
"so they can’t avoid it with obvious accounting shenanigans" - therein lies the rub. Such a scheme has yet to be invented.
- it would punish low skill industries over high skill industries; the PE shop of a dozen people where the lowest paid worker makes $500,000 doesn't have to worry, but the retail chain with 100,000 employees is going to be hit hard
- provides a strong incentive to outsource low paying jobs, rather than bringing them in house, or come up with other corporate structures (franchises for retail operations, move headquarters out of the country) to avoid having low paying employees on corporate payroll
Completely unsurprising suggestion by the NDP who has never been elected to lead the country before, so tends to have a ton of half-baked populist ideas that don't appear to be thought through very well and will never actually be implemented, but are very good at attracting voters.
If you look into the history of progressive taxation in the US this holds true. When they got rid of it (lowered taxes) the government took in more tax dollars because it was cheaper to just pay the taxes instead of paying to not give 90% (or whatever the highest bracket really was) of your income to the government.
If a company hires an outside company to come pick up their garbage, do the garbage men also count? What happens when they switch vendors, do they report that back to the government? What happens if the outside firm gives their employees a raise? Does that get reported back to the main company, who then informs the government?
What if they hire an outside firm for only 1 month, does that count?
Who tracks all this? How does it get reported to the government?
That sounds like a massive regulatory mess and burden which of which the cost will be passed to customers.
Corporate taxes should be zero. Anything else stifles innovation and leads to double taxation.
Should that be taxed before the capital exits your country?
We want to slow down the natural growth of inequality - it grows because the economies of scale that are available today lead to many natural monopolies which were not possible in the past, and because people closer to the source of money get more than others via the Cantillon Effect - not because of anything special that they did per se.