What? No, I think doing whatever's necessary to close the income gap in America is a very good thing. If that means severely limiting executive pay by tying it to the takehome wages of their lowest paid employee, I'm all for it.
I think that's a bit extreme, at least as an out-and-out restriction. What would be ideal is if the public essentially punished (y'know, with their dollars) companies that had grossly unequal salary structures, and rewarded those that were better to their employees.
But that relies way too much on people not opting for whatever is cheapest and most convenient and enforcing social standards with their buying habits - so fat fucking chance, basically.
The realistic solution to achieve this is probably fucking with the tax code somewhere.
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HacksawJ. Duggan Esq.Wrestler at LawRegistered Userregular
What? No, I think doing whatever's necessary to close the income gap in America is a very good thing. If that means severely limiting executive pay by tying it to the takehome wages of their lowest paid employee, I'm all for it.
I think that's a bit extreme, at least as an out-and-out restriction. What would be ideal is if the public essentially punished (y'know, with their dollars) companies that had grossly unequal salary structures, and rewarded those that were better to their employees.
But that relies way too much on people not opting for whatever is cheapest and most convenient and enforcing social standards with their buying habits - so fat fucking chance, basically.
The realistic solution to achieve this is probably fucking with the tax code somewhere.
Fucking with the tax code won't change the fact that real wages for the middle and bottom haven't gone up, while the price of consumer goods has. If you want to see people put in a position to have more buying power, tie the income of top executives directly to that of their lowest paid/compensated employees. Do that and you'll see corporate minimum wages skyrocket overnight.
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KasynI'm not saying I don't like our chances.She called me the master.Registered Userregular
What? No, I think doing whatever's necessary to close the income gap in America is a very good thing. If that means severely limiting executive pay by tying it to the takehome wages of their lowest paid employee, I'm all for it.
I think that's a bit extreme, at least as an out-and-out restriction. What would be ideal is if the public essentially punished (y'know, with their dollars) companies that had grossly unequal salary structures, and rewarded those that were better to their employees.
But that relies way too much on people not opting for whatever is cheapest and most convenient and enforcing social standards with their buying habits - so fat fucking chance, basically.
The realistic solution to achieve this is probably fucking with the tax code somewhere.
Fucking with the tax code won't change the fact that real wages for the middle and bottom haven't gone up, while the price of consumer goods has. If you want to see people put in a position to have more buying power, tie the income of top executives directly to that of their lowest paid/compensated employees. Do that and you'll see corporate minimum wages skyrocket overnight.
Of course changes to the tax code can positively affect the middle class. More revenue means more public employees, higher pay and more benefits for those employees, and less need for deep budget cuts that end up harming just about every aspect of the economy - particularly when it comes to education and the economic mobility that affords people.
Embracing a more progressive effective tax system would help out the entire economy, and it would start from the bottom up.
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HacksawJ. Duggan Esq.Wrestler at LawRegistered Userregular
You're not going to get any changes through to the tax code through, this year. Maybe not even next year, if the popular trend of Republican obstructionism continues.
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KasynI'm not saying I don't like our chances.She called me the master.Registered Userregular
You're not going to get any changes through to the tax code through, this year. Maybe not even next year, if the popular trend of Republican obstructionism continues.
Yeah, because a hard limit on CEO salary related to that of their poorest employee is so much more politically practical.
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HacksawJ. Duggan Esq.Wrestler at LawRegistered Userregular
You're not going to get any changes through to the tax code through, this year. Maybe not even next year, if the popular trend of Republican obstructionism continues.
Yeah, because a hard limit on CEO salary related to that of their poorest employee is so much more politically practical.
Neither are politically practical. But one of them might actually do something to close the horrendous income gap our nation's private sector currently suffers from.
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KasynI'm not saying I don't like our chances.She called me the master.Registered Userregular
You're not going to get any changes through to the tax code through, this year. Maybe not even next year, if the popular trend of Republican obstructionism continues.
Yeah, because a hard limit on CEO salary related to that of their poorest employee is so much more politically practical.
Neither are politically practical. But one of them might actually do something to close the horrendous income gap our nation's private sector currently suffers from.
As will more progressive tax policy, and it's actually a possibility politically (however remote, these days, what with Norquist fucking us all over). Your suggestion is a 100% non-starter at basically any point in American history.
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HacksawJ. Duggan Esq.Wrestler at LawRegistered Userregular
I sometimes wonder what Teddy roosevelt would do If he could see the state of politics in the US.
Invariably it sees him going on a rampage, killing republicans for their devolution into muppets for the wealthiest americans and using the bible to support this and The democrats for letting them get away with it.
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spacekungfumanPoor and minority-filledRegistered User, __BANNED USERSregular
What? No, I think doing whatever's necessary to close the income gap in America is a very good thing. If that means severely limiting executive pay by tying it to the takehome wages of their lowest paid employee, I'm all for it.
I didn't say whether I was good or bad. It's just an unworkable suggestion because there are too many ways around it. The closest to this that I think you could come would be denying deductions to the company for payment of wages/incentive comp above 100x the lowest paid worker (this in and of it self would be an administrative nightmare). This would not stop payments from being made, but it would make it more expensive. If the listing agencies also worked it into the listing criteria for NYSE and NASDAQ, then you could have hard limits, but (1) they would never do that and (2) you would still only be looking at public companies.
Please see the thread I linked earlier for some concrete reforms to executive compensation that are both feasible (at least on the tax side) and would be extremely effective.
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Deebaseron my way to work in a suit and a tieAhhhh...come on fucking guyRegistered Userregular
You're not going to get any changes through to the tax code through, this year. Maybe not even next year, if the popular trend of Republican obstructionism continues.
Yeah, because a hard limit on CEO salary related to that of their poorest employee is so much more politically practical.
Neither are politically practical. But one of them might actually do something to close the horrendous income gap our nation's private sector currently suffers from.
Capping executive salary like that is near impossible. Adjusting the tax code so that C level salaries are taxed at a higher rate is possible (technically) and would do more to close the income gap then you give it credit for.
For one thing, you can use those tax monies to hire people in the public sector.
Deebaser on
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Deebaseron my way to work in a suit and a tieAhhhh...come on fucking guyRegistered Userregular
What? No, I think doing whatever's necessary to close the income gap in America is a very good thing. If that means severely limiting executive pay by tying it to the takehome wages of their lowest paid employee, I'm all for it.
I didn't say whether I was good or bad. It's just an unworkable suggestion because there are too many ways around it. The closest to this that I think you could come would be denying deductions to the company for payment of wages/incentive comp above 100x the lowest paid worker (this in and of it self would be an administrative nightmare). This would not stop payments from being made, but it would make it more expensive. If the listing agencies also worked it into the listing criteria for NYSE and NASDAQ, then you could have hard limits, but (1) they would never do that and (2) you would still only be looking at public companies.
Please see the thread I linked earlier for some concrete reforms to executive compensation that are both feasible (at least on the tax side) and would be extremely effective.
Hell, create a parent or holding company that is basically the C suite.
Better yet, hire "contractors" for all the positions that make under X.
We face a conundrum. The argument of the wealthy versus the poor has been going on for some time. In particular, the lead up to the Athenian Civil War occurred because Landowners were perceived with contempt by the majority. As they lived in a Democracy, they simply voted to help themselves to the landowners possessions. This was simple theft made legal by the Tyranny of the Majority(Which most of my American friends who specialize in constitutional matters or history would probably be aware of was considered a Very Bad Thing by their founding fathers).
Limiting executive pay is not the answer.
Firstly, it would make no difference. Through the use of shell corporations, multiple job-titles and the like, they could easily sidestep any legislation you could push through.(Sure, you can only pay the President of a company 10 times what the janitor makes. But I actually have 3672 different jobs within the company, all of which get paid 10 times what the janitor makes). Because you can't limit someone taking a second job, or being paid for various 'consulting' jobs, there would be easy ways around it.
Secondly, it isn't simple pay imbalances that are the problem. It's a power imbalance. Not very many people I know would be upset if someone invented a wonderful new fuel that was renewable, cheap and easily attainable and that person made a fortune off of the idea. Instead, they're upset because wealth perpetuates wealth. This makes any upward mobility very rare. Rich parents raise rich kids who make friends with rich other kids, who are introduced to good positions by their other rich friends. A CEO rarely is successful because he was Summa Cum Laude at Harvard. He's successful because he had the contacts he needed to be successful.
The solution cannot be to push down the successful. The solution must be to raise the less successful. Make education more prevalent, encourage learning real skilled trades, raise the economic output of the country as a whole.
What? No, I think doing whatever's necessary to close the income gap in America is a very good thing. If that means severely limiting executive pay by tying it to the takehome wages of their lowest paid employee, I'm all for it.
I didn't say whether I was good or bad. It's just an unworkable suggestion because there are too many ways around it. The closest to this that I think you could come would be denying deductions to the company for payment of wages/incentive comp above 100x the lowest paid worker (this in and of it self would be an administrative nightmare). This would not stop payments from being made, but it would make it more expensive. If the listing agencies also worked it into the listing criteria for NYSE and NASDAQ, then you could have hard limits, but (1) they would never do that and (2) you would still only be looking at public companies.
Please see the thread I linked earlier for some concrete reforms to executive compensation that are both feasible (at least on the tax side) and would be extremely effective.
Hell, create a parent or holding company that is basically the C suite.
Better yet, hire "contractors" for all the positions that make under X.
My "no franchising or separation" regulation would prevent this. You can't split your executives off as "contractors" or the like and pay them big consulting dollars, or hire contractors for pennies on the dollar to get around it. They are counted in the total, and their hours matter.
Mostly, fuck "superstar" executives, we don't need people making hundreds of millions of dollars a year. I'd honestly say we don't need people making half a million a year either.
not a doctor, not a lawyer, examples I use may not be fully researched so don't take out of context plz, don't @ me
The solution cannot be to push down the successful. The solution must be to raise the less successful. Make education more prevalent, encourage learning real skilled trades, raise the economic output of the country as a whole.
Yes locking someone in to $20 an hour for 40 years is a good thing.
not a doctor, not a lawyer, examples I use may not be fully researched so don't take out of context plz, don't @ me
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Deebaseron my way to work in a suit and a tieAhhhh...come on fucking guyRegistered Userregular
Hell, create a parent or holding company that is basically the C suite.
Better yet, hire "contractors" for all the positions that make under X.
My "no franchising or separation" regulation would prevent this. You can't split your executives off as "contractors" or the like and pay them big consulting dollars, or hire contractors for pennies on the dollar to get around it. They are counted in the total, and their hours matter.
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This is a lot more complicated than you think and doesn't get around the perma-temps. My company neither knows, nor gives a quarter of a fuck how much the contractors from Bobby Half Staffing actually get paid.
I'd honestly say we don't need people making half a million a year either.
LOL, fuck that shit, bro.
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Apothe0sisHave you ever questioned the nature of your reality?Registered Userregular
The problem of what to do about the very rich and CEO compensation is one that keeps me up at night.
I can't decide between Logan's Run and Highlander.
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AManFromEarthLet's get to twerk!The King in the SwampRegistered Userregular
We can deal with this without subverting the things that make American business work. Making sure our tax system is progressive, providing people with the tools they need to succeed instead of paying lip service to the idea of education, having a "trust but verify" relationship with corporate America, all the things we did before the 80s.
The problem of what to do about the very rich and CEO compensation is one that keeps me up at night.
I can't decide between Logan's Run and Highlander.
Why choose at all? After obtaining your first Million, you are automatically enrolled in the "Highlander" program. Any US citizen that manages to behead you will gain your wealth. This opens up all kinds of opportunities for social mobility. Of course, you have to play it safe, though, because once your net worth reaches 1 Billion, you're collected for Carousel. Should help prevent rampant wealth conglomeration and encourage the top-earners to invest.
I actually do think we need an "income ceiling". Having so much money into so few peoples' possession starting to do wonky things to the economy. If you go over the limit you either have to:
A: Give it to charity
B: Give it up to the government
Or C: Reinvest it into your company (such as bonuses for your workers)
I'll say it again, having so much money concentrated into so few hands is making the economy dysfunctional. Not to mention, a lot of it gets sent offshore, taking it out of the US economy permenantly.
I like the idea putting caps on how much you can write off based on your total income and total number of dependents (obviously, some additional restrictions would be added to this last one based on income as well). One of the big issues is that too much money not only gets stratified in the top percent of income earners, it doesn't really circulate either. Whether money get gets down to everyone else in significant amounts to maintain a healthy economy by taxing the rich to fund government services or by the rich having an incentive to invest in endeavors that cause more people to be employed hardly matters.
I actually do think we need an "income ceiling". Having so much money into so few peoples' possession starting to do wonky things to the economy. If you go over the limit you either have to:
A: Give it to charity
B: Give it up to the government
Or C: Reinvest it into your company (such as bonuses for your workers)
I'll say it again, having so much money concentrated into so few hands is making the economy dysfunctional. Not to mention, a lot of it gets sent offshore, taking it out of the US economy permenantly.
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Apothe0sisHave you ever questioned the nature of your reality?Registered Userregular
The problem of what to do about the very rich and CEO compensation is one that keeps me up at night.
I can't decide between Logan's Run and Highlander.
Why choose at all? After obtaining your first Million, you are automatically enrolled in the "Highlander" program. Any US citizen that manages to behead you will gain your wealth. This opens up all kinds of opportunities for social mobility. Of course, you have to play it safe, though, because once your net worth reaches 1 Billion, you're collected for Carousel. Should help prevent rampant wealth conglomeration and encourage the top-earners to invest.
I actually do think we need an "income ceiling". Having so much money into so few peoples' possession starting to do wonky things to the economy. If you go over the limit you either have to:
A: Give it to charity
B: Give it up to the government
Or C: Reinvest it into your company (such as bonuses for your workers)
I'll say it again, having so much money concentrated into so few hands is making the economy dysfunctional. Not to mention, a lot of it gets sent offshore, taking it out of the US economy permenantly.
Hmm... it's like the expression "Too big to fail." When so few people have a gigantic portion of the economy in their pocket, it amplifies the risk of the economy. Since that one entity has so much of it, his mistakes will also thus be amplified. I conjecture that if income distribution were more equal it would disperse some of the shock of economic recessions/depressions.
Edit: It's just an hypothesis from a lay-person. I could be completely wrong. Someone who knows economics might know
Gigazombie Cybermage on
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HacksawJ. Duggan Esq.Wrestler at LawRegistered Userregular
Interesting point. Would you say that having more wealth or less wealth makes a company more or less likely to fail?
For instance, the insurance companies have steadily been scurrying away funds for some time. Because the last few years have resulted in increased liabilities and insurance fraud, many insurance companies have had several years of losing money. In many cases, they're still sharing out profits to their investors, however, because they have carefully husbanded the money they saved before that.
As an aside: Would you rather be earning the equivalent of 2 times as much as you are now, able to purchase twice as much and live twice as well, but everyone around you would be earning 4 times as much as you? Or would you rather earn half as much as you are now, being able to purchase half as much, but everyone else would only be earning a quarter of what you're earning.
Hmm... it's like the expression "Too big to fail." When so few people have a gigantic portion of the economy in their pocket, it amplifies the risk of the economy. Since that one entity has so much of it, his mistakes will also thus be amplified. I conjecture that if income distribution were more equal it would disperse some of the shock of economic recessions/depressions.
Edit: It's just an hypothesis from a lay-person. I could be completely wrong. Someone who knows economics might know
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spacekungfumanPoor and minority-filledRegistered User, __BANNED USERSregular
The solutions you are all suggesting are both too complex and too easy to get around. If you are concerned about executive compensation, you raise individual income tax rates and tax incentive compensation at ordinary rates, plain and simple. No need for exotic salary cap systems.
The other way to do it is to make it cost more money for companies to pay their executives, by denying the company the ability to deduct the compensation, and imposing excise taxes on payments above a certain level (again, you need to add incentive comp in or you create a loophole large enough to drive a truck through).
The former approach is more effective, but also less politically palatable. The second approach is just an expansion of how we handle this now on issues like golden parachutes and deferred compensation (both of these rules have had enormous impacts on how companies pay executives). The effect will be less dramatic, and harder to explain to voters, since its all very technical and nuanced. This approach would also create greater compliance costs, because the rules will be too complex for people to navigate without compensation lawyers (there are maybe 1000-1500 people in the whole country that really understand all of the current rules) but it would work.
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Deebaseron my way to work in a suit and a tieAhhhh...come on fucking guyRegistered Userregular
The solutions you are all suggesting are both too complex and too easy to get around. If you are concerned about executive compensation, you raise individual income tax rates and tax incentive compensation at ordinary rates, plain and simple. No need for exotic salary cap systems.
Yup. I'd also like to see the government make capital gains taxes a wee bit more progressive. I haven't done the math or anything, but 0, 10, 15, 20, 21, 22 would probably be better for the working class than 15%s all the way down.
Also tax stock options and all that at a progressive rate. This might have the added benefit of encouraging lower income people to invest.
Always a good plan. As an example: If one had invested $100, 000.00 in Johnson and Johnson baby powder in 1980 and invested the dividends back in the company, it would currently be worth over $5 1/2 million and you'd be getting dividends worth slightly over $300, 000.00 a year. Stocks traditionally outpace inflation quite safely.
I tend to be more conservative in my thinking than most on this board where it comes to the economy, but there are some serious problems with the way most commercial investors think. An investment banker plays with what is essentially monopoly money. In simplistic terms, if they invest for 10 years in ultra high-risk areas and loses money every year but one, they will need a new job every year. Thankfully, there are numerous companies that will hire him. If in the tenth year he makes money, he will earn millions in compensation.
This results in malinvestment as bandwagoneers jump in, resulting in overinvestment in areas and causes bubbles in the financial district, which causes the mess we're in.
This isn't the fault just of the bankers, but of everyone who invests with those various firms as a means of managing their money. Yes, it's simple and yes, those who invest in those institutions tend to make fabulous amounts of money given the risk involved to them personally. Because of this, they have access to far more funds than they'd have traditionally.
This sort of malinvestment is the fault of the bankers, you, the companies you work for who invest with them, the politicians, people who buy things from companies that invest with those institutions, etc. It's endemic and this sort of self-interest drives the peaks and troughs we see now. "Who cares if we drive market bubbles through malinvestment as long as I, personally, get a good interest rate."
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spacekungfumanPoor and minority-filledRegistered User, __BANNED USERSregular
Also tax stock options and all that at a progressive rate. This might have the added benefit of encouraging lower income people to invest.
In general, anyone who is given stock options will exercise them when the chance arises (and companies usually facilitate this) but they simply don't give stock options to low ranking employees. If you want to encourage stock ownership by rank and file employees, then what you should support is more employee stock ownership plans. These are a type of retirement plan which allows the company to contribute stock to the plan on behalf of the employees on a pretax basis, allowing the employees to participate in the gains of the company. They are especially popular in new england, which makes sense since they have more of a focus on community in corporate cultures in many new england states (especially New Hampshire and Vermont).
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Deebaseron my way to work in a suit and a tieAhhhh...come on fucking guyRegistered Userregular
Also tax stock options and all that at a progressive rate. This might have the added benefit of encouraging lower income people to invest.
In general, anyone who is given stock options will exercise them when the chance arises (and companies usually facilitate this) but they simply don't give stock options to low ranking employees. If you want to encourage stock ownership by rank and file employees, then what you should support is more employee stock ownership plans. These are a type of retirement plan which allows the company to contribute stock to the plan on behalf of the employees on a pretax basis, allowing the employees to participate in the gains of the company. They are especially popular in new england, which makes sense since they have more of a focus on community in corporate cultures in many new england states (especially New Hampshire and Vermont).
I would like to know more. My company has an ESPP and 401K, but nothing like that.
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spacekungfumanPoor and minority-filledRegistered User, __BANNED USERSregular
Also tax stock options and all that at a progressive rate. This might have the added benefit of encouraging lower income people to invest.
In general, anyone who is given stock options will exercise them when the chance arises (and companies usually facilitate this) but they simply don't give stock options to low ranking employees. If you want to encourage stock ownership by rank and file employees, then what you should support is more employee stock ownership plans. These are a type of retirement plan which allows the company to contribute stock to the plan on behalf of the employees on a pretax basis, allowing the employees to participate in the gains of the company. They are especially popular in new england, which makes sense since they have more of a focus on community in corporate cultures in many new england states (especially New Hampshire and Vermont).
I would like to know more. My company has an ESPP and 401K, but nothing like that.
An ESOP is nothing like an ESPP, but is kind of like a 401(k) plan. It is a retirement plan where all of the assets are contributed to your account by the employer, and are used to buy stock in the employer. When you retire, you have the right to either receive the stock or (if the company is privately held) to receive cash or a 5 year note from the company (the notes are intended to keep a company from being bankrupted if a bunch of employees retire in the same year). ESOPs are great for the company (they can provide significant tax advantages), great for the employees (its retirement savings you don't need to contribute to, confers tax advantages, and gives you a stake in your employer) and great for moral (a lot of the top midsized companies to work for in America have ESOPs). The only real problems are (1) the company needs to keep cash on hand to manage the repurchase obligation and (2) if you use it as your only form of retirement, then you will be in trouble if the company tanks. They're also complicated, so they aren't cheap to run, but that may be changing soon (the IRS is considering allowing prototype plans like off the shelf 401(k)'s, instead of requiring individualized plans which are much more expensive to set up and operate).
Also tax stock options and all that at a progressive rate. This might have the added benefit of encouraging lower income people to invest.
In general, anyone who is given stock options will exercise them when the chance arises (and companies usually facilitate this) but they simply don't give stock options to low ranking employees. If you want to encourage stock ownership by rank and file employees, then what you should support is more employee stock ownership plans. These are a type of retirement plan which allows the company to contribute stock to the plan on behalf of the employees on a pretax basis, allowing the employees to participate in the gains of the company. They are especially popular in new england, which makes sense since they have more of a focus on community in corporate cultures in many new england states (especially New Hampshire and Vermont).
That's not what I meant by "this might have the added benefit of encouraging lower income people to invest."
If it wasn't a flat tax rate on stocks, it might encourage more people to invest. Instead it's seen as a vehicle for the rich to get richer. An investment class, if you will. I don't honestly care about stock options for r&p employees. Although they should be beneifts offered. Again, reinforcing the "unified benefit packages offered to every employee regardless of position" should be a regulation.
So your executives get the same health care plan as your low employees, but there'd have to be a way to prevent a company from getting insurance that has a $1000 a month premium or something to prevent higher ups from preventing employees from taking advantage. This goes for stock options, if you offer stock to your top level employees, you should offer it to your low level employees as well.
Something anyways. As it stands now we're just perpetuating the "rich should be rich!" issue. Not that I disagree with this but it just makes situations worse. I don't think people should not be wealthy if there's a genuine reason for it. And I don't think an MBA from Harvard who's father knows the Koch brothers is a good "reason."
not a doctor, not a lawyer, examples I use may not be fully researched so don't take out of context plz, don't @ me
Also tax stock options and all that at a progressive rate. This might have the added benefit of encouraging lower income people to invest.
In general, anyone who is given stock options will exercise them when the chance arises (and companies usually facilitate this) but they simply don't give stock options to low ranking employees. If you want to encourage stock ownership by rank and file employees, then what you should support is more employee stock ownership plans. These are a type of retirement plan which allows the company to contribute stock to the plan on behalf of the employees on a pretax basis, allowing the employees to participate in the gains of the company. They are especially popular in new england, which makes sense since they have more of a focus on community in corporate cultures in many new england states (especially New Hampshire and Vermont).
Yes, because that worked out so fucking well for the employees of Enron.
Also tax stock options and all that at a progressive rate. This might have the added benefit of encouraging lower income people to invest.
In general, anyone who is given stock options will exercise them when the chance arises (and companies usually facilitate this) but they simply don't give stock options to low ranking employees. If you want to encourage stock ownership by rank and file employees, then what you should support is more employee stock ownership plans. These are a type of retirement plan which allows the company to contribute stock to the plan on behalf of the employees on a pretax basis, allowing the employees to participate in the gains of the company. They are especially popular in new england, which makes sense since they have more of a focus on community in corporate cultures in many new england states (especially New Hampshire and Vermont).
Yes, because that worked out so fucking well for the employees of Enron.
And definitely wouldn't provide even more of an incentive for executives to loot companies and leave the small investors holding the bag.
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spacekungfumanPoor and minority-filledRegistered User, __BANNED USERSregular
spacekungfuman, do they decrease mobility? Are you tied to the company if you want to see returns on that investment until you retire?
There may be a minimum employment period like 12 months before you are vested in the stock, but otherwise, no, they do not limit mobility. You can keep your account in the plan or roll it to an IRA (but them it will be cash, not stock).
Also tax stock options and all that at a progressive rate. This might have the added benefit of encouraging lower income people to invest.
In general, anyone who is given stock options will exercise them when the chance arises (and companies usually facilitate this) but they simply don't give stock options to low ranking employees. If you want to encourage stock ownership by rank and file employees, then what you should support is more employee stock ownership plans. These are a type of retirement plan which allows the company to contribute stock to the plan on behalf of the employees on a pretax basis, allowing the employees to participate in the gains of the company. They are especially popular in new england, which makes sense since they have more of a focus on community in corporate cultures in many new england states (especially New Hampshire and Vermont).
Yes, because that worked out so fucking well for the employees of Enron.
And in the wake of Enron a lot of companies have been sued by 401(k) plans that hold employer stock (and even some ESOPs) over drops in stock value. Not to mention that things didn't go so well for the GM ESOP. That doesn't negate the value of ESOPs as benefits at fundamentally sound midsized companies, which are the most common sponsors of them.
Like I said before, they can't be your only form of retirement savings, since they are not diversified, but they are a nice, egalitarian benefit that I would love to see more of (and not just because I happen to like working on them).
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Deebaseron my way to work in a suit and a tieAhhhh...come on fucking guyRegistered Userregular
If it wasn't a flat tax rate on stocks, it might encourage more people to invest. Instead it's seen as a vehicle for the rich to get richer. An investment class, if you will. I don't honestly care about stock options for r&p employees. Although they should be beneifts offered. Again, reinforcing the "unified benefit packages offered to every employee regardless of position" should be a regulation.
I respectfully disagree. I don't believe the working class is discouraged from investing because of the capital gains tax. Shit, five figure ballers looking to invest are probably more discouraged by trading account minimums and transactions fees.
Long term capital gains are taxed at a comicly low rate compared to earned income.
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Deebaseron my way to work in a suit and a tieAhhhh...come on fucking guyRegistered Userregular
Also tax stock options and all that at a progressive rate. This might have the added benefit of encouraging lower income people to invest.
In general, anyone who is given stock options will exercise them when the chance arises (and companies usually facilitate this) but they simply don't give stock options to low ranking employees. If you want to encourage stock ownership by rank and file employees, then what you should support is more employee stock ownership plans. These are a type of retirement plan which allows the company to contribute stock to the plan on behalf of the employees on a pretax basis, allowing the employees to participate in the gains of the company. They are especially popular in new england, which makes sense since they have more of a focus on community in corporate cultures in many new england states (especially New Hampshire and Vermont).
Yes, because that worked out so fucking well for the employees of Enron.
On the other hand, something similar worked out amazing for my father.
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I think that's a bit extreme, at least as an out-and-out restriction. What would be ideal is if the public essentially punished (y'know, with their dollars) companies that had grossly unequal salary structures, and rewarded those that were better to their employees.
But that relies way too much on people not opting for whatever is cheapest and most convenient and enforcing social standards with their buying habits - so fat fucking chance, basically.
The realistic solution to achieve this is probably fucking with the tax code somewhere.
Fucking with the tax code won't change the fact that real wages for the middle and bottom haven't gone up, while the price of consumer goods has. If you want to see people put in a position to have more buying power, tie the income of top executives directly to that of their lowest paid/compensated employees. Do that and you'll see corporate minimum wages skyrocket overnight.
Of course changes to the tax code can positively affect the middle class. More revenue means more public employees, higher pay and more benefits for those employees, and less need for deep budget cuts that end up harming just about every aspect of the economy - particularly when it comes to education and the economic mobility that affords people.
Embracing a more progressive effective tax system would help out the entire economy, and it would start from the bottom up.
Yeah, because a hard limit on CEO salary related to that of their poorest employee is so much more politically practical.
Neither are politically practical. But one of them might actually do something to close the horrendous income gap our nation's private sector currently suffers from.
As will more progressive tax policy, and it's actually a possibility politically (however remote, these days, what with Norquist fucking us all over). Your suggestion is a 100% non-starter at basically any point in American history.
Invariably it sees him going on a rampage, killing republicans for their devolution into muppets for the wealthiest americans and using the bible to support this and The democrats for letting them get away with it.
I didn't say whether I was good or bad. It's just an unworkable suggestion because there are too many ways around it. The closest to this that I think you could come would be denying deductions to the company for payment of wages/incentive comp above 100x the lowest paid worker (this in and of it self would be an administrative nightmare). This would not stop payments from being made, but it would make it more expensive. If the listing agencies also worked it into the listing criteria for NYSE and NASDAQ, then you could have hard limits, but (1) they would never do that and (2) you would still only be looking at public companies.
Please see the thread I linked earlier for some concrete reforms to executive compensation that are both feasible (at least on the tax side) and would be extremely effective.
Capping executive salary like that is near impossible. Adjusting the tax code so that C level salaries are taxed at a higher rate is possible (technically) and would do more to close the income gap then you give it credit for.
For one thing, you can use those tax monies to hire people in the public sector.
Hell, create a parent or holding company that is basically the C suite.
Better yet, hire "contractors" for all the positions that make under X.
Limiting executive pay is not the answer.
Firstly, it would make no difference. Through the use of shell corporations, multiple job-titles and the like, they could easily sidestep any legislation you could push through.(Sure, you can only pay the President of a company 10 times what the janitor makes. But I actually have 3672 different jobs within the company, all of which get paid 10 times what the janitor makes). Because you can't limit someone taking a second job, or being paid for various 'consulting' jobs, there would be easy ways around it.
Secondly, it isn't simple pay imbalances that are the problem. It's a power imbalance. Not very many people I know would be upset if someone invented a wonderful new fuel that was renewable, cheap and easily attainable and that person made a fortune off of the idea. Instead, they're upset because wealth perpetuates wealth. This makes any upward mobility very rare. Rich parents raise rich kids who make friends with rich other kids, who are introduced to good positions by their other rich friends. A CEO rarely is successful because he was Summa Cum Laude at Harvard. He's successful because he had the contacts he needed to be successful.
The solution cannot be to push down the successful. The solution must be to raise the less successful. Make education more prevalent, encourage learning real skilled trades, raise the economic output of the country as a whole.
My "no franchising or separation" regulation would prevent this. You can't split your executives off as "contractors" or the like and pay them big consulting dollars, or hire contractors for pennies on the dollar to get around it. They are counted in the total, and their hours matter.
Mostly, fuck "superstar" executives, we don't need people making hundreds of millions of dollars a year. I'd honestly say we don't need people making half a million a year either.
Yes locking someone in to $20 an hour for 40 years is a good thing.
My "no franchising or separation" regulation would prevent this. You can't split your executives off as "contractors" or the like and pay them big consulting dollars, or hire contractors for pennies on the dollar to get around it. They are counted in the total, and their hours matter.
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This is a lot more complicated than you think and doesn't get around the perma-temps. My company neither knows, nor gives a quarter of a fuck how much the contractors from Bobby Half Staffing actually get paid.
LOL, fuck that shit, bro.
I can't decide between Logan's Run and Highlander.
It's all doable, if a bit difficult.
Why choose at all? After obtaining your first Million, you are automatically enrolled in the "Highlander" program. Any US citizen that manages to behead you will gain your wealth. This opens up all kinds of opportunities for social mobility. Of course, you have to play it safe, though, because once your net worth reaches 1 Billion, you're collected for Carousel. Should help prevent rampant wealth conglomeration and encourage the top-earners to invest.
A: Give it to charity
B: Give it up to the government
Or C: Reinvest it into your company (such as bonuses for your workers)
I'll say it again, having so much money concentrated into so few hands is making the economy dysfunctional. Not to mention, a lot of it gets sent offshore, taking it out of the US economy permenantly.
battletag: Millin#1360
Nice chart to figure out how honest a news source is.
He's an ideas man!
Hmm... it's like the expression "Too big to fail." When so few people have a gigantic portion of the economy in their pocket, it amplifies the risk of the economy. Since that one entity has so much of it, his mistakes will also thus be amplified. I conjecture that if income distribution were more equal it would disperse some of the shock of economic recessions/depressions.
Edit: It's just an hypothesis from a lay-person. I could be completely wrong. Someone who knows economics might know
SOCIALISM!!!
For instance, the insurance companies have steadily been scurrying away funds for some time. Because the last few years have resulted in increased liabilities and insurance fraud, many insurance companies have had several years of losing money. In many cases, they're still sharing out profits to their investors, however, because they have carefully husbanded the money they saved before that.
As an aside: Would you rather be earning the equivalent of 2 times as much as you are now, able to purchase twice as much and live twice as well, but everyone around you would be earning 4 times as much as you? Or would you rather earn half as much as you are now, being able to purchase half as much, but everyone else would only be earning a quarter of what you're earning.
The other way to do it is to make it cost more money for companies to pay their executives, by denying the company the ability to deduct the compensation, and imposing excise taxes on payments above a certain level (again, you need to add incentive comp in or you create a loophole large enough to drive a truck through).
The former approach is more effective, but also less politically palatable. The second approach is just an expansion of how we handle this now on issues like golden parachutes and deferred compensation (both of these rules have had enormous impacts on how companies pay executives). The effect will be less dramatic, and harder to explain to voters, since its all very technical and nuanced. This approach would also create greater compliance costs, because the rules will be too complex for people to navigate without compensation lawyers (there are maybe 1000-1500 people in the whole country that really understand all of the current rules) but it would work.
Yup. I'd also like to see the government make capital gains taxes a wee bit more progressive. I haven't done the math or anything, but 0, 10, 15, 20, 21, 22 would probably be better for the working class than 15%s all the way down.
Always a good plan. As an example: If one had invested $100, 000.00 in Johnson and Johnson baby powder in 1980 and invested the dividends back in the company, it would currently be worth over $5 1/2 million and you'd be getting dividends worth slightly over $300, 000.00 a year. Stocks traditionally outpace inflation quite safely.
I tend to be more conservative in my thinking than most on this board where it comes to the economy, but there are some serious problems with the way most commercial investors think. An investment banker plays with what is essentially monopoly money. In simplistic terms, if they invest for 10 years in ultra high-risk areas and loses money every year but one, they will need a new job every year. Thankfully, there are numerous companies that will hire him. If in the tenth year he makes money, he will earn millions in compensation.
This results in malinvestment as bandwagoneers jump in, resulting in overinvestment in areas and causes bubbles in the financial district, which causes the mess we're in.
This isn't the fault just of the bankers, but of everyone who invests with those various firms as a means of managing their money. Yes, it's simple and yes, those who invest in those institutions tend to make fabulous amounts of money given the risk involved to them personally. Because of this, they have access to far more funds than they'd have traditionally.
This sort of malinvestment is the fault of the bankers, you, the companies you work for who invest with them, the politicians, people who buy things from companies that invest with those institutions, etc. It's endemic and this sort of self-interest drives the peaks and troughs we see now. "Who cares if we drive market bubbles through malinvestment as long as I, personally, get a good interest rate."
In general, anyone who is given stock options will exercise them when the chance arises (and companies usually facilitate this) but they simply don't give stock options to low ranking employees. If you want to encourage stock ownership by rank and file employees, then what you should support is more employee stock ownership plans. These are a type of retirement plan which allows the company to contribute stock to the plan on behalf of the employees on a pretax basis, allowing the employees to participate in the gains of the company. They are especially popular in new england, which makes sense since they have more of a focus on community in corporate cultures in many new england states (especially New Hampshire and Vermont).
I would like to know more. My company has an ESPP and 401K, but nothing like that.
An ESOP is nothing like an ESPP, but is kind of like a 401(k) plan. It is a retirement plan where all of the assets are contributed to your account by the employer, and are used to buy stock in the employer. When you retire, you have the right to either receive the stock or (if the company is privately held) to receive cash or a 5 year note from the company (the notes are intended to keep a company from being bankrupted if a bunch of employees retire in the same year). ESOPs are great for the company (they can provide significant tax advantages), great for the employees (its retirement savings you don't need to contribute to, confers tax advantages, and gives you a stake in your employer) and great for moral (a lot of the top midsized companies to work for in America have ESOPs). The only real problems are (1) the company needs to keep cash on hand to manage the repurchase obligation and (2) if you use it as your only form of retirement, then you will be in trouble if the company tanks. They're also complicated, so they aren't cheap to run, but that may be changing soon (the IRS is considering allowing prototype plans like off the shelf 401(k)'s, instead of requiring individualized plans which are much more expensive to set up and operate).
That's not what I meant by "this might have the added benefit of encouraging lower income people to invest."
If it wasn't a flat tax rate on stocks, it might encourage more people to invest. Instead it's seen as a vehicle for the rich to get richer. An investment class, if you will. I don't honestly care about stock options for r&p employees. Although they should be beneifts offered. Again, reinforcing the "unified benefit packages offered to every employee regardless of position" should be a regulation.
So your executives get the same health care plan as your low employees, but there'd have to be a way to prevent a company from getting insurance that has a $1000 a month premium or something to prevent higher ups from preventing employees from taking advantage. This goes for stock options, if you offer stock to your top level employees, you should offer it to your low level employees as well.
Something anyways. As it stands now we're just perpetuating the "rich should be rich!" issue. Not that I disagree with this but it just makes situations worse. I don't think people should not be wealthy if there's a genuine reason for it. And I don't think an MBA from Harvard who's father knows the Koch brothers is a good "reason."
Yes, because that worked out so fucking well for the employees of Enron.
And definitely wouldn't provide even more of an incentive for executives to loot companies and leave the small investors holding the bag.
There may be a minimum employment period like 12 months before you are vested in the stock, but otherwise, no, they do not limit mobility. You can keep your account in the plan or roll it to an IRA (but them it will be cash, not stock).
And in the wake of Enron a lot of companies have been sued by 401(k) plans that hold employer stock (and even some ESOPs) over drops in stock value. Not to mention that things didn't go so well for the GM ESOP. That doesn't negate the value of ESOPs as benefits at fundamentally sound midsized companies, which are the most common sponsors of them.
Like I said before, they can't be your only form of retirement savings, since they are not diversified, but they are a nice, egalitarian benefit that I would love to see more of (and not just because I happen to like working on them).
I respectfully disagree. I don't believe the working class is discouraged from investing because of the capital gains tax. Shit, five figure ballers looking to invest are probably more discouraged by trading account minimums and transactions fees.
Long term capital gains are taxed at a comicly low rate compared to earned income.
On the other hand, something similar worked out amazing for my father.