Should CEO pay be curbed by the use of a steep progressive tax on the highest income earners?
No one has a talent that should earn them 200 times more than their average employee. These individuals are earning ridiculous amounts of money off of the hard work of others. Their greed has gone so far as to have a great deal of corporations paying millions of people just over minimum wage. These same employees have no health benefits and are unable to pay their bills, forcing many of them onto the welfare rolls. They are responsible, so they should pay for it.
Since CEO pay in America is many orders of magnitude higher than the pay of average workers in those same companies, I believe that CEO pay should be taxed progressively, to remove the incentive to grossly overpay executives. Income disparity in this country is at an all-time high, and CEOs should do their part and pay their fair share of taxes.
Constraining CEO pay with progressive taxes is a good idea because companies are committing criminal like acts by paying CEO's incredibly large payouts even when their company is failing and workers are being laid off and fired. Those payments do not require any accountability or achievement in order to receive the compensation. Often even if the company is in ruins and the CEO is forced to leave the payments are still made as a part of the golden parachute clause in the CEO's agreement with the company. That misuse of company funds requires a response and progressive taxes are a great answer.
Our country is in a financial crisis. There is a strong need for us to take in more money. Most CEOs earn way too much, and don't pay out enough in taxes. If we charged them more taxes, then the country would benefit, and it would do a better job at evening out earnings, so that there is not such a large discrepancy between the wealthy and the poor.
The ratio of CEO to worker pay is now hundreds to one in the U.S., a mind-boggling figure, even as government services, including education and public safety, are suffering in jurisdictions across the nation. The economy has remained healthy during previous periods of more progressive taxation, so it seems premature and a case of poor priorities to worry about the effect on corporate performance and innovation so heavily that we resist such taxation now. When so many Americans are struggling to manage the basics of living and to get solid ground under their feet, the unfathomable privilege and comfort of CEOs can stand to take a hit in the tax code, a change that could still allow them to live luxuriously and prosper from their efforts.
Just about every working adult in our nation is aware and appalled at the exorbitant amounts of money and perks given to the average CEO. Even CEOs that have done a poor job and nearly wreck their companies are usually rewarded with huge severance packages. This is a slap in the face to millions of hard working average joes who keep the companies going with little pay and benefits.
CEO pay in the United States has reached ridiculous proportions. In most countries, there is a cap on CEO pay, based on what workers are earning. For instance, in Japan, CEOs are capped at 30 times what they're lowest workers are paid. This type of compensation cap helps maintain a stable society. In the United States, CEOs can award themselves huge pay raises and bonuses, while laying off workers and raising prices on consumers. Since the United States corporations cannot rein in their own greed, there needs to be a government means, through taxation or a cap, to help maintain equilibrium.
Coe's are clearly the people that make the big bucks. Even though they might have to take big risks the pay off for them is extreme. Paying some additional taxes will not hurt them that much. They are already in a position that provides very comfortable living and tax increases will not affect them like they would to regular hourly employees.
In most cases, if CEO pay is outrageous, there will be a market incentive to reduce the CEO's pay. If that market incentive isn't heeded, then the company's financials will reflect that. There is one exception to this rule, however, and that is companies that are the recipient of government bailouts. Since these companies are getting a cash infusion that would be denied them were the market to run its course, CEO pay should be subject to strict controls in these cases.
Executives and CEOs go to school for years to obtain their degrees. We need the smartest and most capable people running the companies of the United States. If there wages are taxed to the point that being a CEO is no longer worth the effort of the schooling it takes to get there, chances are, we will end up with those inept at running huge corporations. Instead, the tax should be imposed on the bonus part of there wages.
We need the best people in charge of companies and banks. The pay should be left for the board and stockholders to decide. Someone who doesn't deserve their pay can be removed. Progressive taxes reduces the incentive to do good on the job. I would want the best and the brightest in these positions. This encourages hiring of employees if these people are successful. Progressive taxes would discourage this.
The current economic state of our country is the perfect evidence of what happens when government interjects themselves in private industry. The need to stay our of businesses, and let the market balance itself.
In terms of business, we should never regulate the pay of an owner and his or her workers. In effect, what the government would be doing, is creating a lack of incentive to work. Furthermore, there will be a silent retaliation of businesses in the country to stagnate and slow in growth. If you want to stifle an economy, one based on capitalism, tax the rich and watch them move their money elsewhere, including offshore. We can see right now, what the threat of taxing and regulation is doing to our current U.S. economy, with the potential to have a double-dip recession.
For example, when minimum wage rises, employers are forced to pay employees a higher wage. Therefore, the employer now must raise prices on items to make up for the cost. Big business rarely ever takes a hit in their pocketbook. They try to find ways of making that money back. This usually means people like me end up paying more in the end.
It would be foolish to specifically target CEOs with a steep tax. In today's world, they could very easily just move their companies overseas and take all the jobs they provide with them. Any type or progressive tax on the wealthy has to be reasonable and should not target one profession, such as a CEO.
Those who succeed in life should not be punished for doing so. It is the American dream to succeed and have no financial worries. Why should anyone be punished for fulfilling that dream. When Robin Hood stole from the rich and gave to the poor he did so because those rich did nothing to deserve such wealth. The CEO's and Presidents of companies now have worked hard to become what they are today and nobody has the right to take that away from them. Let me say that my family is far from rich and what few comforts we have we enjoy. I would be very upset if anybody decided that they were going to come and take those few comforts away because not everybody has them. It would make me wonder why we have worked hard all of our life when the government wants to take those few comforts from us and give them to people who have not even tried.
There is no good reason to tax people that make more money at a higher rate than those that make less money. We should all be required to contribute the same percentage of our income. We are a free and equal society and it is inequitable to increase taxes for those that make more money.
If CEOs are taxed more steeply this would be a bad thing. Taxing CEOs more means that they will feel the need to make up the lost profits by either paying their employees less or by increasing the prices for products and services. In the end this is never a benefit to the public as a whole. The best thing to do is to do a typical progressive tax that is not excessive.