Raising Taxes on Corporations that Pay Their CEOs Royally and Treat Their Workers Like Serfs

Until the 1980s, corporate CEOs were paid, on average, 30 times what their typical worker was paid. Since then, CEO pay has skyrocketed to 280 times the pay of a typical worker; in big companies, to 354 times.

Meanwhile, over the same thirty-year time span the median American worker has seen no pay increase at all, adjusted for inflation. Even though the pay of male workers continues to outpace that of females, the typical male worker between the ages of 25 and 44 peaked in 1973 and has been dropping ever since. Since 2000, wages of the median male worker across all age brackets has dropped 10 percent, after inflation.

There's no easy answer for reversing this trend, but this week I'll be testifying in favor of a bill introduced in the California legislature that at least creates the right incentives. Other states would do well to take a close look.

The proposed legislation, SB 1372, sets corporate taxes according to the ratio of CEO pay to the pay of the company's typical worker. Corporations with low pay ratios get a tax break.Those with high ratios get a tax increase.

For example, if the CEO makes 100 times the median worker in the company, the company's tax rate drops from the current 8.8 percent down to 8 percent. If the CEO makes 25 times the pay of the typical worker, the tax rate goes down to 7 percent.

On the other hand, corporations with big disparities face higher taxes. If the CEO makes 200 times the typical employee, the tax rate goes to 9.5 percent; 400 times, to 13 percent.

www.huffingtonpost.com...

That seems as a very positive legislation if passed, unless some loopholes are left in (a´la giving CEOs bonuses instead of wage). I do not deny CEOs are important in every company and they do deserve higher wage, although 300 times as much as the average worker is simply too much, especially when other employees receive lower wages because of that. At the end, CEO might make the decisions, but the employees materialise these ideas and do deserve their fair share as well, reasonable pay, so people would not have to worry about rent or food or have the need for welfare programs.

Another aspect, I believe should also be considered, not particularly with this law, but maybe in the future, is determining some ratio of low-wage employees to profit of the company. If the company makes billions of profit per year and still there are many employees, who earn less than living wage, then the company should be taxed significantly higher, especially considering that 1) The taxes paid on employees are lower and 2) The welfare programs have to take up the undone business by companies. I understand if the company truly is in financial troubles and the profits are very low, that then it is not possible to pay all the employees reasonably, but when the profits amount to billions, it is just greed on the expense of the people who make the company.

what ever happened to having a massive Boycott of that Corporations goods/services...

with less sales there will be less profits, ergo no real reason to award the top execs those outrageous bonuses

besides, the CEOs of today are in that CEO position Not By Being a clean-cut, Ethical person... they are schemers who fudge the legality of tax loopholes, probably even buy derivatives to short their own company to make personal profit even as the Board of Directors award that CEO bonuses and perks



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as for the corporations that cash in tens of Billion$ every quarter... It is not so much the employees are underpaid, it is more likely that the price of the product is way too high.
I hold that just about every Corp out there needs to deflate the prices of the product they sell...instead the mindset of the puppet masters is to increase inflation...
Which will eventually lead to only the federal workers and the top 10% of the workforce able to afford 'normal things' like cable TV or a chicken-in-every-pot...as the masses suffer severe Austerity (sub-subsistence living standard)

There is always the option of not working for someone who pays you "serf" wages.

2nd

When Japan wrote their constitution after WW2 Franklin Roosevelt had them put it in that the highest paid worker of a company couldn't make X amount more then the lowest paid worker. Roosevelt tried to get the same thing done here but the Republicans fought it. He died before he could get it passed.

originally posted by: St Udio
what ever happened to having a massive Boycott of that Corporations goods/services...

with less sales there will be less profits, ergo no real reason to award the top execs those outrageous bonuses

besides, the CEOs of today are in that CEO position Not By Being a clean-cut, Ethical person... they are schemers who fudge the legality of tax loopholes, probably even buy derivatives to short their own company to make personal profit even as the Board of Directors award that CEO bonuses and perks

Couple of problems though:

In some areas co operations have litraly brought out all competition and bribed.....sorry lobbied the local politicians to make all but impossible to set up any new competition. So if you want food, medical services or a place to put your meagre money it has to go through a co operatin.

Plus if we could somehow boycotte them you think the CEO will cut there earnings? No they will just lower wages for the common folk or cut jobs so again the common folk suffer.

We have basicaly returned to feudalism only instead of lords and barons we have CEO's , board executived, and company presidents and instead of knights we have shareholders.

Its all the same game, just the titles have changed.

originally posted by: beezzer
There is always the option of not working for someone who pays you "serf" wages.

2nd

Not everyone gets to choose where they work.

Its not really about what they get paid to me, if they didnt get paid that they wouldnt do it.

For me the major injustice is the reinvestment of company profits, if a company does well why shouldnt everyone involved get a cut.

reinvesting and reinvesting, to what end? so a company exists and gets bigger? when did it start becoming about the company name and not the people that made it.

If you have an annual turn over in the millions, why do you have to reinvest in assets and not the people. If i worked hard and got a sweet bonus you can be damned well sure id work even harder next time.

Wouldn't this also effect the social security trust fund? Instead of giving raises to those who don't earn over the max; they give them to those who they know won't cost them the extra money?
Maybe if we eliminate the max of taxable income for social security it would have an effect?

originally posted by: beezzer
There is always the option of not working for someone who pays you "serf" wages.

2nd

In a lot of places you dont have a choice.

You either work for them or dont work at all.

You rather they go onto welfare instead?

Its feudlism pure and simple now.


If we ever want a return to a free market the big players need dismantleing first to create a fresh slate.

a reply to: St Udio

Obviously this Bill wont go anywhere. Its just an election year publicity stunt. Typical class warfare/divide and conquer BS.

Government always has one "solution", go after or blame someone else.

If they're "so worried" about the average American (which they're obviously not), they should immediately cut spending and lower our taxes so we keep more of the money that we EARN.

They should also dismantle the Federal Reserve which, with government, is responsible for destroying the purchasing power of our dollar. This way we would be able to buy a lot MORE with LESS money. This is the real reason for the destruction of the middle class.

A serf actually paid LESS in taxes, about 10%. Between the federal government, state government, social insecurity, property taxes, gasoline tax, sales tax (you get the idea), we are forced to give over 50% of our income to the State...

I agree that these CEO salaries are very high, but these are for-profit corporations. Thats why they exist, to make money and they should be free to choose how they want to spend that money.

Shareholders are the ones who should demand changes to compensation. They actually have the ability to call a vote.

Why they dont do it is beyond me. I guess they dont know?

Maybe thats where government can get involved. Use the power of the pulpit to educate people on their investor rights.

a reply to: crazyewok

People say "mans got to eat" and go about their way.

Do you need a Mercedes? probably not but if you can have one, why not? right?

a reply to: beezzer

1) There are not many good paying jobs out there. There are too many people who would rather accept the lower wage than have no job at all. Not much choice if one has a family to provide or payments to make.

2) Every job is important for the society. Whether a cleaning lady, shop clerk or transport worker, jobs like that are needed for the society.

3) Personally, I do believe that every person, whatever their job should earn reasonable living. If one works at some company 40 hours a week, they should be able to cover their medical bills, pay their rent for small apartment/house, buy enough food to not starve, afford basic tech and cover the transport fees.

I personally consider myself rather well-off, when compared to majority of citizens here. Yet, I still feel sorry for the one´s in the bottom 10%. It is basic empathy. Most of them are hard workers, have worked far more than I have during their lives, yet they are stuck. I just got lucky (good family, talent, country where I was born), other people work harder, yet I get better results.

They all pay the educated ones more and the non educated less. That's how its always been. The last corp. I worked paid me 7 bucks an hour, but my supervisor that got an online certificate gets paid 650 a week for doing nothing but observing. That was 15 years ago, I guess it was the presidents fault at the time huh?

originally posted by: gladtobehere

I agree that these CEO salaries are very high, but these are for-profit corporations. Thats why they exist, to make money and they should be free to choose how they want to spend that money.

This legislation would still allow companies to compensate their CEO's and low-paid employees any way they wish. The companies will just be taxed at a higher rate, if the disparity between the 2 is high.

a reply to: Cabin

I'm replying to you, but also addressing the others who commented on my post as well.

It isn't easy finding a good paying job.
It isn't easy relocating if necessary.
It isn't easy supporting a family in a poor economy.

But. . .

No one ever said it was easy.


Because something is hard, we need to change laws?

I guess I grew up differently. If something was difficult, you just worked harder until you obtained whatever goal you were looking to get.

You make sacrifices.
You do without.

This idea, this concept, that because it is hard making it somehow wrong just confuses me.

The good things in life are hard to obtain.

If they were easy to obtain, then everyone would have them, agreed?

Life is hard. Life isn't always fair. Life doesn't give you trophies for participating.

a reply to: beezzer


I think your missing the underlying issue.

Yes life is hard I would normally agree.


The issue though is life is getting harder and harder and harder. eventually it will become next to impossible. You want that?

We are returning to a state of feudalism.

Freedom is dying,l opportunity is dying, the chance to ever better one self is dying. The road we are going down the common folk will not have any freedom, or lives will be at the pure whim of those in economic and political power.

The only free choice your children will have is
1) toe the Co Operate line
2)Starve in the streets
3) Live on the mercy of Government hand outs

Is that true freedom?

The way things are going unless you belong to a very lucky few all hope of property ownership, any hope of self employment, any hope of self betterment will be gone. All land, all wealth and all resources will belong to a very very very rich few family and rationed out to the rest of us.


You don't like big government? Well mega corps are no different to big government. Exactly the same. They dole out there own version of "welfare" to the masses and exert there own power and influence. Only difference between a Government and a co operation is that Governments have army's.

You say:

originally posted by: beezzer
I guess I grew up differently. If something was difficult, you just worked harder until you obtained whatever goal you were looking to get.

Maybe in the past that was true but we are entering a world were working harder means nothing and will still get you poverty and suffering. We are entering a world were what you said may not be possible. Its not difficult, its impossible.


Things have changed.

a reply to: beezzer

I do agree life can be hard, although why keep it hard just for the sake of it? If something is difficult and there are ways of making it easier, why not use these?

Nobody is asking trophies for participating, but reasonable salary for their 40+ hour work weeks. No person in the world deserves earning even 100 times more than another person who is working the same amount of time in the same country.

When it is possible to eliminate/lower the poverty levels of the society, why not do it? Why let the corporations take advantage people, if this could be removed? In the 21st century no one should sacrifice health, their family and relationships just for survival, it is plainly wrong.

a reply to: crazyewok

I can agree for the most part.

But isn't this something that all of us have been talking about for years now?

If you haven't made plans, changes, adaptations, preparations, then you're probably screwed now.

But that's what we talk about on ATS on a daily basis.

For some, it may have been nothing but talk, but for others it was a wake up call.

a reply to: Cabin

Perhaps it has always been this way. There have always been the haves and the have nots. Why should this time be any different? We've seen political systems that have tried to aliviate the disparity but these systems have always become corrupt. Maybe we're just not evolved enough just yet.

The purpose of taxation should be to fund the legitimate duties of government, not be used to punish people you don't like. When you empower the government to use the tax code for social engineering or "social justice," you give the government too much power and the unintended consequence of that is that someday, that power likely will be used against you.