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comment by b_b

There's no reason to cap pay if your marginal tax rates are high enough at the top end to make getting paid more nothing but a generous donation from your company to the government. If, say, the marginal rate on earnings over a million dollars were 90%, then all the board is doing by paying their execs more than a million is giving money away, then I'd say they have a stronger incentive to invest in equipment and people than to increase top earners' compensation. It's a remarkable easy fix to a problem that doesn't have to even exist.





user-inactivated  ·  3469 days ago  ·  link  ·  

A 90% marginal rate on personal earnings is a bit ridiculous. In order to get to that point at a million dollars, you'd most likely have taken away $750,000 already.

Secondly, have you heard of the one-dollar CEOs? A lot of tech company heads, because they have so much secondary income through shares of the company, can avoid paying that 90% personal income tax by making their salary just one dollar.

I think what we need isn't so much a higher income tax rate (especially on wages), but bringing the tax rate up on investment earnings over certain thresholds. A capital gains tax of only 15% when the income tax for the same amount is 35% is kinda just asking for people to redirect all their income in that direction.