What would a wage cap actually do?

First, realize that I do not advocate a wage cap. I am not saying we should limit the wealth of inventors and innovators. I believe this would be a direct intrusion upon freedom and do not delude myself to think that entrepreneurs of all sorts are unimportant, but I do have the question....

What would happen if we did?

If any one person could only pocket/put into a bank one million dollars a year in the USA - And also applied this rule to any international business we bought from- What would happen?

It's not as if supply and demand would cease to exist.

Billionaires may get pissy - But a thousand millionaires would be glad to start retail stores if every walmart shut down.

Now, I don't know the negatives, nor the positives really. I don't have a background at all in economics or business, but I do think there are lies when it comes to "incentive" - As if a wage cap would make everyone just move away or something and no one would ever try to open a business because they could never make billions a year..

What do you say, other members?

Would there only be negatives?

Would there be positives, but positives that are not worth the negatives?

Would this violate everything everyone stands for?

Would it make a better or worse market? Create more or less businesses?

Just a question. Again, I DO NOT advocate for wage caps ( at this time, in my current opinion, with my current knowledge. )

a reply to: deadlyhope

Mmmmmmm, (scratching my head). I "think", I could be wrong but, I seem to recall the last time they tried Wage and Price controls the result was during the Nixon mis-Administration.

The result was an inflationary spiral that resulted in 21% interest rates to stop the run away inflation. Wage caps necessarily result in product shortages which causes prices for goods to go up. As they are seen to rise, consumers panic and buy up everything they can.........causing prices to go ever more higher.

Those were really bad days. In 1973 my Dad bought a Ford Crown Victoria for the family car for $3,500.00. He had to buy a new one in 1978. It cost $10,000.00.

An income cap would be counter productive.

If anything maybe an asset cap. It would get hoarded wealth reinvested back into the market.

But the best solution would be people earning whatever they can and continuing to pay taxes at the rates of the working class. The uber rich pay lower effective tax rates than their secretaries. Simply applying the Buffet Rule would more effective than an income cap.

WTFCARES Anymore. Do any of US have a real choice. FO.

a reply to: TonyS

Hmm thanks for the example.


Obviously, short-term, I could see this. Long term, not sure.

What if the same situation were in effect until 1980's, 90's, etc... do you think that FCV would have costed him a ton more ( than it does now, even ) if wage caps stayed in effect?

a reply to: deadlyhope

Do you like having your health insurance tied to your employment?

The last time that wage caps were implemented, this was one of the direct effects of it. Employers find ways to compete for the best employees. If they can't directly offer higher salaries and wages to lure in better talent, then they find other ways. In that instance, they started offering things like health insurance. Pretty soon, health insurance benefits become part of the standard employment package so that even when wage caps were lifted, that benefit stuck.

Now, people are trying to decouple the two things because they discovered that it's not so cool to not be employed and not be able to afford health insurance outside a group plan sponsored by an employer.

originally posted by: HighFive
An income cap would be counter productive.

If anything maybe an asset cap. It would get hoarded wealth reinvested back into the market.

But the best solution would be people earning whatever they can and continuing to pay taxes at the rates of the working class. The uber rich pay lower effective tax rates than their secretaries. Simply applying the Buffet Rule would more effective than an income cap.

Saving ... also called "hoarding" by people who don't do it ... is the effect of having high taxes implemented to realize redistributionist policies (aka secondary, or democratic, socialism). If you know that the profits made from your productive efforts are going to be taxed at a punitive rate, then you do not realize the gross profits. You invest and either make an investment profit, or you save ("hoard") to avoid paying that rate.

This will only increase as the rates go up and the attempts to take it away continue. What do you think? That people are stupid?

a reply to: ketsuko

Hmm I do not happen to work at a place in which provides health insurance.

However, even if I did - I would take a wage increase over health insurance, given the choice.

I doubt it would ever be enforceable.
With bonuses and shares of stock they would skirt the wage restrictions.
Let's be honest here, they have the best lawyers and accountants money can buy.

I am kinda interested in how the movie stars and athletes would get a $20 million payout.

a reply to: Bluntone22

I can agree with this. It would be very tough to actually enforce.

income caps are just price/wage controls... currency controls... the NWO, Globalists luv it

CEOs get less compensation but are Awarded huge Stock Grants or even options @ 2¢ on the dollar is an example,
perhaps instead of a $10 million annual salary they get only $5 million plus exclusive rights to a private Jet 24-7/365 and a fleet of armored Limos for him the wife the kids

the hidden Socialist is peeking through a thin veneer

oligarchs always pop to the surface no matter the restraints that others might try to impose...

pure capitalism exists only in a pie-in-the-sky, ficticious reality.... Land Sharks abound...
call 'em predatory capitalists or even war-lords in Muslim lands....




Whom would impose any cap
congress, president, a blue-ribbon committee...

it stinks of Dictatorship or wearing the Mantle of Supreme Leader

the anti-Christ will be here soon enough to impose his 'mark' and wage caps on us all

a reply to: St Udio

Right, I could definitely see the CEO situation.

However - If they were offered luxury goods instead of money, wouldn't this better the economy?

A multi-million dollar beach-house employed likely hundreds of people between everything in it.

a reply to: ketsuko

I do not assume people are stupid, there would be many workarounds, even more evasion, etc. - Note that I definitely do not advocate such a system, I only wondered about it in theory.

a reply to: ketsuko

I'm not advocating for an income or asset cap.

It would be easier to eliminate tax loopholes and apply a flat tax or the Buffet Rule, than cap millionaires income.

A factory worker shouldn't pay higher effective tax rates than Mitt Romney.

My small business shouldn't pay high taxes while General Electric and Walmart pay little to none.

originally posted by: Bluntone22
I doubt it would ever be enforceable.
With bonuses and shares of stock they would skirt the wage restrictions.
Let's be honest here, they have the best lawyers and accountants money can buy.

I am kinda interested in how the movie stars and athletes would get a $20 million payout.

It's funny, anytime these discussions come up about outlandish salaries and compensations packages they always center on F500 executives, but no one ever complains about actors or athletes making $50 million a year.

A wage cap would hurt the most productive and would do nothing to help those at the bottom. Wages are a function of supply and demand. If someone is making a boat load of money, it is because that is what they are worth to whoever is paying them.

a reply to: deadlyhope

The NFL and NBA would cease to exist.

a reply to: Edumakated


But everybody likes paying a $100 a ticket to go to a football game!

a reply to: DBCowboy

Not really.

If a million a year was the natural wage for extreme talent in these sports- Maybe the current players would quit, but thousands, tens of thousands, with equal, or near equal talent, would replace them.

Plus I hate sports anyways.

Maybe I do advocate wage caps! ( Not really. )

a reply to: Edumakated

Tell me what part of the process the Walton family plays in supply and demand.

Do they personally and directly...

Grow crops?

Process them and bag them?

Ship them?

The 99% of us are the suppliers, we are the demand - We are the producers, the shippers, the manufacturers.. All of it. Though this statement will likely fall on deaf ears.

Wages are supposed to go up to keep up with inflation.

The less your money is worth the more of it you need to keep up.

Who hasn't noticed that wages are flat and inflation is climbing steadily. Who hasn't noticed that the upper crust's 'wages' have skyrocketed?

How much is enough?