Why SHOULDN'T we have a National Income Cap?

[Occulus]

For discussion of the 'cons' of this concept.

[Starbucks Anarchist]

1. Because it would keep people from working harder.

[ktlyon]

4. Isn't that the point

once you reach the max you stop working and let someone else make a few bucks?

[Starbucks Anarchist]

5. If you did that, you would starve to death.

[ktlyon]

7. How would I starve to death?

Because I got a job when someone else maxed out?
I don't do things because I am motivated by money. In fact I try not to take more than I need from the system so I would never max out my income under this theoretic idea. I think it is a fallacy that people need to be motivated by greed. I also don't believe you need God to be a good person.

[Starbucks Anarchist]

10. I was referring to the person who gets maxed out.

If they stop making money (or get unfairly capped), they might not be able to afford basic necessities.

Many jobs are not motivated by greed, but those tend to be lower-paying jobs. However, there is always some form of greed in the higher-paying jobs. A doctor may love to treat patients, but he also knows he'll be compensated very well. Do you think a surgeon will go through all that training and school just to max out at an insufficient wage compared to his skill set?

And who said anything about God?

[Atman]

25. I disagree with your premise, a little bit...

A doctor may love to treat patients, and love the compenstation...but there comes a point where you're working your ass off not for the love of the job, but to keep up with the debt you've incurred. IOW, Doc Johnson started out altruistic. Loved caring for patients. He charged a fair price for his services, and made a bundle doing so. So he bought a bigger house and a Lexus. And got married. And his wife wanted a Lexus, too. So he had to work harder and harder, no longer because he was altruistic and loved his work, though. Rather, because, he was now on the treadmill. If he didn't keep getting in new patients and expanding his practice, he couldn't afford to pay for his big house and twin Lexus's and wife's spa membership, and kid's equestrian lessons, and his golf club membership...he got into "the system" and now can't let up. He couldn't reduce his income if he wanted to, because he has a 30 year mortgage on a million dollar home, and $1000 a month in car payments and...and...and...

But OTH, having a salary "cap" doesn't work. Our entire economy is based upon supply and demand, which is only marginally predictable. If we knew in advance what every wage in America would cap out at, then it would not only effect the wages, it would effect the people selling homes, cars, even equestrian lessons. At that point, you might as well have the government set the price/wage of everything for everybody.

And there is another word for that...something like "communism." The concept sounds good, but he wildcard is always human nature. If you have no chance of attaining that trillion dollar salary merely because the government says you can't, then your spirit is sapped, you have no "goals." Goals and hopes and dreams are what keep the human mind motivated to expand and achieve.

[salin]

8. what is the max out? What if it were $50 Million...

unless one is a fool, that wouldn't lead to starving to death.

[Starbucks Anarchist]

11. We don't know what the max is.

That's the problem. Is it $50,000? $500,000? $5,000,000?

And the "starving to death" thing was in response to the poster who mentioned someone quitting their profession when they reach the maximum amount. If the cap is unreasonably low, like $50,000, it'd be hard to live on that for too long.

[salin]

12. While I think the discussion is moot

that was the point I was trying to make - per without knowing details, hard to comment either way.

[Deja Q]

16. Exactly. Once gas becomes $6/gallon and bread $30/loaf...

Nevermind the cost of meat or prepackaged goods...

[Selatius]

2. It provides a disincentive to work, especially for those who are greedy

If you want a less punitive tax code, a maximum tax bracket of, for example, 55 percent is good enough.

[stepnw1f]

18. tough

for them... Greed should never be rewarded.

[sheelz]

23. Minimum wage is a disincentive to work.

[DLnyc]

3. Rather than a cap, tax excess over median.

Say the median income is 35,000 (I don't know what it is, but I believe it's somewhere in the 30-50 K range). Then assume something like 80% of median is getting pretty close to subsistence. That's 28,000 (if median is 35,000). So the system is not working so hot for people making 25k a year or less. So let them keep the 25k--they shouldn't bear the burden for the system if they are barely surviving under it. And, anyway, how the hell much are you gonna squeeze out of people making 25k without sending them to bankruptcy, emergency medical services, food stamps, . . .

Then start a progressive tax on the EXCESS over 35k people are making--
a few percent on the first 15k excess, say
up to 5% up to 50k excess over (i.e. 2500)
up to 10% up to 150k excess over 35k (so making 185k pay 15k)
then steeper up to 30% for up to 1,000,000 excess over 35k (probably still less than paying now)
Okay, you're making 1,035,000 a year, you really should not be complaining, the system is working quite nicely now for you, you can start paying a steeper rate, towards 50% for 10,000,000 over, top rate say 70% (applies to people who inherited great wealth and make 50 mill a year in interest and capital gains, they are wealthy enough, the system has worked well, in fact too well, for them, lucky them, now pay most of their excess in taxes.

A cap singles people out and seems artificial and arbitrary--just pay a progressively greater portion as your income goes into realms that only 1 or 2% can hope to see.

If someone's good with web-design, a great tool would be a database of income bands and number of people in each band. A visitor could design a tax schedule that seems reasonable, enter it on a form, and see numbers and graphics displaying the amount that would be collected and percentage of total paid by various groups.

I think it would show that the current system (especially if Social Security is included) puts a very large portion of the burden on people who can least afford it and collects at only a slightly higher rate, or even, perversely, at a lower rate from those whose life-style wouldn't change perceptively even if they gave twice as a large portion of their money in taxes.

Just my opinion, I'd be interested in reponses, but I'm going to bed now, so I probably won't read them (if any) for several hours (since I don't typically read while sleeping).

[salin]

9. Didn't the tax code during Eisenhower

do something along these line?

[robcon]

6. People will not work for nothing.

Doctors will work three days a week. Few people will invest in new businesses.

It's been tried before (95% marginal tax rate in UK in the 60's) An economic disaster.

[SharonAnn]

21. The 1960's was NOT an economic disaster. Check your hsitory.

[mondo joe]

13. I don't like this, or jury award caps either.

I do believe mega-CEO salaries are way out of line.

Thhe problem is the people have to understand and believe that.

[Cats Against Frist]

14. Because you don't want to give the government that much power

Broad, idealistic, over-reaching government programs do nothing but make the government bigger and more powerful, when the rich people buy it. Rather than cap income, or create a 90 percent tax bracket, the solution is three-fold:

1. Raise the minimum wage.
2. Consumers get off their lazy asses and support responsible companies -- and buy quality, made-in-USA products.
3. Labor unions get their shit together and right-wing nutjobs stop being paranoid of them.

and, if it gets really bad, someday, down the road -- which I suspect it will -- there will have to be some import-substitution industrialization. Again, though, the populace could make that happen WITHOUT the government, by demanding USA-made goods, and buying the ones that are already there.

[The2ndWheel]

17. Three-fold solution globally right?

Those three things won't work anymore in one country. Maybe before cheap energy(although we had overt slavery then, so), maybe after cheap energy(although we might have the same problem), but not during cheap-enough energy.

That means every government has to get on board with those regulations, every company has to promise not to try and make more money than the other guy, and 6.5 billion people have to agree on any number of things, including not being desperate and having to feed their child. Good luck with that.

[Selatius]

20. Your second point is not workable in our current state

An educated populace is required for the functioning of any representative republic. The same holds true for any functioning economy. The US populace understands that foreign-made goods are cheaper than US made goods, and that is all they are essentially taught in our public schools. Americans, if anything, lack any patriotism or nationalism whatsoever with respect to choices at the check-out counter. This might be why Wal-Mart is now the world's largest retailer in the world. They would never have gotten so big if people had chosen not to shop at their stores in the first place.

[The2ndWheel]

33. But they started out small

Wal-Mart didn't just appear as the store we know and love today. Same way America 2006 didn't just pop up in the last few years. America started out small as well. Just as Wal-Mart was successful at buying out the little guy as it grew, America was very good at slowly killing any human who stood in it's way as it expanded west. Then about a century ago it went over the borders, and now here we are with military bases in almost every country.

If it wasn't Wal-Mart, it would've been some other store that started out in Outinthemiddleofnowhereville. If it hadn't been Spain and Columbus, someone else would've come along and killed people for freedom.

[Occulus]

15. Good reasons so far, everyone

I'm NOT advocating either that we should or should not have such a cap... I only want a discussion of the pros and cons.

permalink to the 'pro' thread:

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=364&topic_id=879280&mesg_id=879280

[KittyWampus]

29. How about linking CEO salary to a percentage of average workers?

[1932]

19. Because there is some work that is worth being compensated in proportion

to the social benefits it creates.

However, I think it's safe to say that that work is not in the fields of, say, finance, insurance and banking. It's probably in the field of inventing, manufacturing, education, art and, perhaps, entertainment.

[Yupster]

22. Let's take the examples of a few people who are very well

compensated for what they do.

Jason Kidd - Before he came to the Nets, the team was a laughing stock and hadn't made the playoffs in over a decade. Then he goes to the Nets and they make the NBA finals two years in a row. They fill up every game, sell millions in T-shirts and other team paraphenalia.

The team may make an extra $ 15 million a year because Jason Kidd is on the team. So if a good chunk of the money doesn't go to him, then who should it go to? The owner? That's where it would go if there was a cap on his earnings of say $ 500,000 a year. Also, how would Kidd react?

Switching to Shaq for a second, he is a 400 pound guy with an arthritic big toe. If he could only make $ 500 k a year, he'd tell his team that he'll play two games a year and the playoffs. Who will that harm? The ticket-takers, the t-shirt and beer sellers, the neighborhood restaurants and bars. So did we accomplish something?

What about Christina Aguilera? She can only make $ 500 k a year? So she cancels all her concerts except one. Did we accomplish anything except keeping people from seeing a nice concert and huting a lot of local people who work at concert venues?

Actually what would actually happen would be that high-paid talented people would just move their residences overseas and we wouldn't have to worry about how much tax we collect from them at all.

[Neil Lisst]

24. because it's illegal and unconstitutional

and unworkable, and impossible

[tsuki]

26. I have long avocated a max salary for top officers of PUBLIC

Corporations.

When the Robber Barons of the 19th century were in action, at least they were building something. The Robber Barons of today are stealing from the stock holders and the employees.

[Yupster]

27. We need a way for stockholders

to have more of a say in what their companies do.

Today you get a proxy notice and it says something like...

Proposal on executive pay For () Against ()

And there's no edxpanation of what the proposal is, and I read the annual report that comes with the proxy notice. It's never explained anywhere.

That's the direction to go to stop this stuff, not maximum wages.

[GoneOffShore]

28. I get proxy notices all the time

I ALWAYS vote against the directors recommends.

If there is a stockholder proposal, I'll vote for that.

I know it's not going to happen, but I'm registering a dissenting voice.

[tsuki]

32. Today corporations are run for the benefit of the CEOs and board

members, not the stockholders. And $13,700 an hour is raiding a corporation.

[GoneOffShore]

30. A follow up question:

What is so good about growth?

We seem to be obsessed with the idea that growth is a "good" thing. Is it? Do profits have to be huge? What is "enough"?

This perhaps goes the idea that quality of life is better than quantity.

Ideally, we all would like enough quality food, adequate and comfortable shelter, reasonable work and leisure time to enjoy the fruits of our labor, just compensation for said work and sex. I'm not sure where the greedy and super rich get the right to have more. The CEO of a big company SAYS he works extra hours, but should his compensation be so much higher than that of the guy who keeps the toilets flushing?

[welshTerrier2]

31. don't cap income; cap wealth ...

the problem we have in this country is that the super-wealthy are able to exert a disproportionate influence on the government ... efforts at campaign finance reform and lobby reform have never worked ...

we need to find a way to limit maximum wealth ... limiting income will not likely bring about the desired result ... it's very easy for some to defer earnings from one year to the next ... but wealth is just sitting there waiting to buy a little share or two of the government ...

until we find a way to limit the power that flows to where the money is, the idea of democracy is a distant pipedream ... we should do whatever is necessary, no matter how restrictive some may see it, to ensure the integrity of our democratic institutions ... capping wealth seems to me to be the only way we will ever get the abuses of big money under control ...