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For Minimum Decency, A Maximum Wage


#1

For Minimum Decency, A Maximum Wage

Sam Pizzigati

n the United States today, a just-released Federal Reserve report informs us, over a fifth of the nation’s families simply cannot afford to “pay all of their current month’s bills in full.”

Over a quarter of families, the report goes on, skip “necessary medical care” because they can’t afford the cost. And an even greater share — 40 percent — wouldn’t be able to cover an unexpected expense of $400 without having to borrow cash or sell something they own.


#2

There are approximately 1 million reasons to hate this idea, the first of which being that it is morally evil. But let’s leave aside morality for a moment and discuss practicality. I can imagine that the following will happen as a result of this idea:

  1. Barring a global cap, you would quickly see people move overseas to locations that don’t have this insane rule. So America would see its best and brightest executives, doctors, entrepreneurs, etc. leave the country.
  2. For those individuals who stay, what would be the incentive to be paid $375,000 to be the CEO of a major international corporation, a 24/7 job requiring a skill-set that almost no one has, when he could take an equivalently paying job that is far less stressful, with far less responsibilities and expectations? Who would ever want to run a company or move up in life to the next position?
  3. Who would ever want to create a company knowing that after years of hard work, if he is lucky enough to create a sustainably profitable business, his annual income from the company would be capped far lower than what he would have expected for all of his efforts and the risks he put up when investing his life savings into the company? I certainly wouldn’t.

The result is the destruction of society as we know it. No innovation, no new companies, successful people and companies moving overseas, massive unemployment. A maximum wage is arguably the worst political idea anyone could ever think of other than full nationalization of industries.


#3

Not too long ago when tax rates on the ultra-wealthy were higher, corporations employed schemes to pretend their executives didn’t make so much.

For example, I have to pay for my car from my own income. Not only does a wealthy executive get a car paid for by the corporation he runs, but the corporation gets to deduct the cost of the car as a business expense. Same for a penthouse apartment. Same for a friggin dining allowance. Hell, the tax law has made it so the government will pay for millionaires’ meals, AND WE’RE CUTTING SNAP!

I appreciate the idea of a maximum income, but how would you enforce it?


#4

A maximum wage from the same oligarchs that are fleecing us? Lets put that one on our wish list.


#5

Morally evil? The only thing I see as being morally evil is the wholesale destruction of the American middle class in pursuit of the enrichment of the investment class.
During the period of high progressive taxation, America did not see it’s investment class or professional class abandon the country.
Congress did not accept FDR’s proposed rate (~$375,000/yr) but instituted one of ~$3,000,000 a year. Is $3M a year enough to run a company? Under these tax rates, America saw unprecedented growth of the middle class. The greatness of modern America was forged in these times with these tax rates and their associated virtual salary caps. Since the 80’s, as the investment class grew richer and politically more powerful, dismantling the progressive tax rates directly lead to the decline and destruction of the middle class as the country knew it. Is the country better off now economically than it was before the 1980’s? Has the extreme enrichment of the investment class benefited the country as a whole?
Regarding your last statement, “The result is the destruction of society as we know it. No innovation, no new companies, successful people and companies moving overseas, massive unemployment.” - it seems to me that this is an apt descriptor of the country as it stands now - it certainly does not describe the situation of the country during the period of high progressive taxation.


#6

You have a sick sense of morality… The Ayn Randian idea that greed, wealth, and power-lust is the only thing that motivates humans to creativity and industriousness is sick, psychopathic, and uniquely USAn.

Good thing that Mozart, Monet, Newton, Maxwell, Einstein, Schrodinger, Bose, Pasteur, Salk, and may other creative and brilliant people weren’t motivated by getting really rich… And the modestly-compensated-but-happy physicists and climatologists Michael Mann, James Hansen, Gavin Schmidt, Rajendra Pachari others may yet save humanity from destroying itself along with 99 percent of all other species.

And actually, most developed countries DO have caps in incomes - it is called a steeply graduated income tax rate which in some countries approach 100 percent. And sure enough, top executives of European or Japanese corporations make only fractions of their counterparts in the USA - while the workers on the shop floors are paid much better. And guess what? These companies are better run and produce better-quality and more innovative products than any US company does.

And the worst of it is that, as the example of many Latin American nations, Indonesia, Vietnam, and the Philippines over the past 60 years show us, the Obscenely Wealthy will murder us by the hundreds of thousands using their hired governments and gangsters rather than give up even a tiny fraction of it so that others can merely live.


#7

What happened was REAGAN. He was an idiot. Most people in the film industry knew it. After he was governor here in California and we got Jerry Brown “Dutch” was all but forgotten. When he pounced on the entire country, he brought permanent class division. And loved it, because he (and his mean wife) were so fucking stupid and clueless. Neither one cared much about other people
A sick little nest of two failed Hollywood wannabes and their vendetta against everyone “who held them back” from being STARS…


#8

Well actually, to be entirely accurate, the car is just employee compensation, and so of course it is deductible. Only gross profit is taxed.

The way maximum income is enforced is simply through a sufficiently high top marginal tax rate on personal income tax. The US once did it (as high a 91 percent during the 2nd Eisenhower Adm.) and many countries still do it. Those were the most prosperous times for the USA too.


#9

This is a good try, but it doesn’t go far enough. There needs to be a cap on wealth, one that eliminates oligarchs (and therefore oligarchy).

A maximum wage won’t stop the Koch brothers and other obscenely wealthy individuals who are destroying our society and our planet. These folks are above wages.

People that wealthy can hire an army of accountants, lawyers, pr people, think tank intellectual prostitutes (after spending the billions to create the think tanks in the first place, like the Cato Institute (Charles Koch et al.) and the Heritage Foundation (Joseph Coors et al.)) and, of course, our “representatives.”

Every American should heed the words of Louis Brandeis:

“We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can’t have both.”


#10

A maximum income limit sounds good to me as does an at least double higher minimum wage to reflect the reality of the exploding higher cost of living today. The federal minimum wage of $7.25 per hour is laughable. Also a higher income for honorably discharged veterans is needed for those who have no other income or financial holdings outside the very low VA disability current framework for veterans designated unemployable.


#11

What about mandatory minimums - but for corporate criminals?

What if slaps on the wrist became slams of cell doors?

Feckless fines became severe sentences?


#12

It doesn’t seem American to cap someone’s earning potential. Returning to higher tax rates of old would help to restore balance. But I think the best way to go is with pay ratios - the pay and perks of a company’s top earner must not be greater than 100 times of what the lowest paid employee makes. So go ahead and collect $20 million annually for your talents, but the janitor then earns $200,000. Then everybody lives well and can support their family.


#13

Dear tvorandftc… rand ftc? : ) oh what’s in a name? : )
Hmm, well after WW 2 the tax rate was huge, like 95% or something-----things seemed to work well for everyone and we had an actual middle class… I don’t think rich people will rush to another country---------because : ) Trump has already made nations wake up and who would take him and the other crazy, rich , American people? We are not coming off as being the least bit trustworthy!, as a nation,

I actually think that lots of CEOs are psychopaths that can’t connect with humanity--------it’s like All about POWER…and “more. more more----”- that loses out to that important “rosebud,” part of their lives. At the end there in that movie, the rich guy who owns it all really just loved his past and the wonderful sled Rosebud." I don’t think Orson Wells was the only one that related to that movie!

Secondly, now that the Earth is falling apart–where do these HAVE TO BE RICH personalities think they will live and what will they eat? This doesn’t end well, I don’t think. Greed isolates and makes lots of enemies of the public. and besides that disease from polluted food water and air will not discriminate. THIRD, when you have that much money—who can you really trust— probably not even your own relatives.

And too, who can they trust in their household help? Will the nanny whack them, or their driver, crash them or the cook add something special and deadly to their dinner-?-------Or-----their banker that screwed up his own life have to start subtracting his client’s money, and who will feel sorry for people that rich?

You should probably read up on the French Revolution-------you can starve some of the people some of the time-----but all of the people all of the time? Nah-----my favorite horror moment of that Revolution was when the PEOPLE were so PISSED ( that they dragged long dead kings and queens right out of their graves! ) Yeah----that’s angry and when a nation gets the people that riled up------ then the old system will crash rather quickly. : 0


#14

I agree with hp5974a and Yunzer, your concept of morality is absurd if you are apply it to someone not being able to pull in more money above some agreed upon limit. You can argue that it is foolish and will result in a worse overall situation (I think you’d be wrong), but you forefit making a reasonable argument when you throw out hyperbole right off the bat.

  1. Will some leave this country? Maybe, but $375k/yr (after paying federal income tax as was stated in the article) doctors will not be leaving in droves, especially if we institute a whole lot of health care reform not the least of which is ridding the education portion of a whole bunch of leeches that are making tuition ridiculous and pulling money from doctor’s salaries for quite some time.

  2. I’m more than happy to have many of the CEOs we have now leave. Quite often they do a terrible job and are rewarded like crazy anyway. I know there are good ones and if those don’t want to do the job unless it comes with a crazy high salary, then I suggest the job be broken up into multiple jobs with a distribution of responsibility. We need more co-ops too, but that’s another discussion.

  3. For the risky proposition of putting your life’s savings into a business idea, this is your best argument and I agree it needs to be considered when crafting legislation. Personally I’d rather see a limit on consumption more than income, but that is a harder thing to accomplish (I’d be happy enough with a hugely graduated VAT and property tax on houses, cars, boats, planes, etc.). Perhaps people in the situation you cite can retain control of money above a threshold. They can’t consume it the same year, but they could plow it into another business or could save it for future consumption.

Ending your argument with more hyperbole (destruction of society as we know it) isn’t helping your point either.

As far as nationalization of industries, I favor a mixed model. Where real innovation is required, I tend to think a regulated market of independent companies is better. For roles where we don’t need any innovation and the innovation that has been tried as been at the cost of society (i.e. the banking fiasco), I am all for nationalization.


#15

A more reasonable pay ratio would be 3 to 1, or 5 to 1.

And i agree with @fairley7 that we also need a wealth cap to go with the income cap.

These are merely basic foundations of a workable society.

The “moral evil” is currently ruling, and ruining, the world. These policies would restore morality.

EDIT: i also agree with @dara that cooperative ownership is superior, morally and socio-economically, to investor ownership. Owners who have a stake in their corporation – as workers primarily, but also as producers, and even as consumers – are far less likely to sign off on the morally evil looting, and other monstrous practices that have become the corporate norm.


#16

There are a million reasons to discuss and debate the idea of max wage. Many reasons have been mentioned here already.
In addition to the very progressive taxing during the last century that allowed for an expansive middle class and superior public education systems, we could also shore up social security funding, implement universal healthcare, fund free or subsidized college education, encourage public financing of elections, …
Should we tax 100 percent? I’m not sure that is reasonable but a very progressive tax on salaries and capitalistic income seems very reasonable.


#17

Baloney
There may be reasons it won’t work but none of them are ones you stated.


#18

Yes, but look at the bright side. Everybody will be equally miserable.

Most of us do not have the required skills or capacity to work in fields or in jobs that pay lot so in order to make everybody equal the top tier need to be dragged down to the lowest common denominator. Kinda like common core and no child left behind. That seems to working out pretty well.


#19

Maximum wage, another great question for all the people to decide by periodic referendums, instead of an oligarchy doing the deciding.

By making the tax laws, the oligarchy finally destroyed progressive taxation, which amounted to a maximum wage.

A Wealth Cap determined by the public every year or so would give the oligarchy an impossible task to destroy. It would have to bribe the entire public instead of just a few politicians.

Wealth and power to the people.


#20

How do you know this? You do not know that you are so wrong (spiritually speaking). Let’s go further than this article writer imagines and let us imagine that Divine Will, which is our perfect free will, is for total and complete equality, equal pay for all no matter the talent. Imagine that dogs stop eating dogs, no more clawing for competition, no more social Darwinism, a GOOD quality of life for EVERYONE, peace on earth and good will to all! What is wrong with you! Our souls became sick from the world and need Healing.