Ten Million Dollar Limit!

[K1052]

Originally posted by: SammyJr

Originally posted by: K1052

Originally posted by: SammyJr

So how would a executive, an employee of a corporation, form yet another corporation to achieve a lower tax rate? Would the executive's services be contracted through this company? That seems like a lot of shady bullshit when it would make more sense to simply hold stock options over the long term and make sound business decisions to grow the company over the long term. Executives would still be compensated handsomely, but would have to be effective over the long term as opposed to over 2 quarters.

Why would a private business owner hand over 70% of their income to the Government? I think you're confusing revenue with profit and ignoring marginal tax rates. A sole proprietorship pays taxes on profits only and would only pay the 70% tax rate on profits above $1 million, per my suggestion in a previous post. In any case, if a private business owner is netting that kind of revenue, they really should incorporate for liability protection and tax advantages.

High level execs will just become contractors and avoid the 70% tax level and get paid more cash instead.

I meant to say profit not income in my second paragraph. Even if they incorporate the rules on how they pay themselves become more complicated since they'd have to declare dividends in order to work around the law. You know the government would be just itching to raise that tax too since all that money would be slipping by at a far lower rate.

Its probably already illegal for the CEO and the executive board to be independent contractors, but that would be an easy fix to make. The executive teams of companies should have a vested, long term interest in the health of their companies. I think the opposite is true right now. The game is to jack up the stock price by offshoring, gutting quality, and R&D and move on before the company collapses.

Higher taxes can be an incentive to invest. If a "'small" business is going to lose so much of their profit over $1 million to taxes, why not replace aging equipment? Why not hire more people? Why not give raises? Why not improve an existing product line? In many cases, profit is simply money not properly invested in growing the business.

This is exactly like the overpaid execs above. They can generate excellent profits at the expense of the business's long term health. That's obviously bad. The ideal is smaller, constant profits over the long term, not massive short term profits followed by long term loses.

Yes, why should those arrogant fat cat private (non publicly traded) business owners get to decide how they should be compensated by their own company which they built and control?

Companies should do things listed in your post to stay competitive not because the government is pointing a financial gun to their head.

 

[trooper11]

Originally posted by: SammyJr


Its probably already illegal for the CEO and the executive board to be independent contractors, but that would be an easy fix to make. The executive teams of companies should have a vested, long term interest in the health of their companies. I think the opposite is true right now. The game is to jack up the stock price by offshoring, gutting quality, and R&D and move on before the company collapses.

Higher taxes can be an incentive to invest. If a "'small" business is going to lose so much of their profit over $1 million to taxes, why not replace aging equipment? Why not hire more people? Why not give raises? Why not improve an existing product line? In many cases, profit is simply money not properly invested in growing the business.

This is exactly like the overpaid execs above. They can generate excellent profits at the expense of the business's long term health. That's obviously bad. The ideal is smaller, constant profits over the long term, not massive short term profits followed by long term loses.

I see what your getting at there. You basically want to regulate how a company uses its profits by imposing a tax that forces them to do just that. Its a sneaky way around the problem, but it wouldnt be the first time taxes were used to regulate decisions. But wouldnt that artifically limit how big a company would want to grow? What if that small business wants to be a big business? What about competing globally? It seems like your idea would really hamper growth potential.

 

[blackangst1]

Originally posted by: SammyJr

Originally posted by: blackangst1

Originally posted by: SammyJr

Originally posted by: K1052

Originally posted by: SammyJr

So how would a executive, an employee of a corporation, form yet another corporation to achieve a lower tax rate? Would the executive's services be contracted through this company? That seems like a lot of shady bullshit when it would make more sense to simply hold stock options over the long term and make sound business decisions to grow the company over the long term. Executives would still be compensated handsomely, but would have to be effective over the long term as opposed to over 2 quarters.

Why would a private business owner hand over 70% of their income to the Government? I think you're confusing revenue with profit and ignoring marginal tax rates. A sole proprietorship pays taxes on profits only and would only pay the 70% tax rate on profits above $1 million, per my suggestion in a previous post. In any case, if a private business owner is netting that kind of revenue, they really should incorporate for liability protection and tax advantages.

High level execs will just become contractors and avoid the 70% tax level and get paid more cash instead.

I meant to say profit not income in my second paragraph. Even if they incorporate the rules on how they pay themselves become more complicated since they'd have to declare dividends in order to work around the law. You know the government would be just itching to raise that tax too since all that money would be slipping by at a far lower rate.

Its probably already illegal for the CEO and the executive board to be independent contractors, but that would be an easy fix to make. The executive teams of companies should have a vested, long term interest in the health of their companies. I think the opposite is true right now. The game is to jack up the stock price by offshoring, gutting quality, and R&D and move on before the company collapses.

Higher taxes can be an incentive to invest. If a "'small" business is going to lose so much of their profit over $1 million to taxes, why not replace aging equipment? Why not hire more people? Why not give raises? Why not improve an existing product line? In many cases, profit is simply money not properly invested in growing the business.

This is exactly like the overpaid execs above. They can generate excellent profits at the expense of the business's long term health. That's obviously bad. The ideal is smaller, constant profits over the long term, not massive short term profits followed by long term loses.

I am willing to bet you dont even have second hand knowledge of how a Fortune 500 company is run, do you.

Maybe you'd care to explain it to me?

You seem to already have it figured out *shrug* This is a forum, kiddo, and your simple request is ridiculous. I think you should get a pass on this one, due to nativity, not stupidity.

 

[SammyJr]

Originally posted by: trooper11

Originally posted by: SammyJr


Its probably already illegal for the CEO and the executive board to be independent contractors, but that would be an easy fix to make. The executive teams of companies should have a vested, long term interest in the health of their companies. I think the opposite is true right now. The game is to jack up the stock price by offshoring, gutting quality, and R&D and move on before the company collapses.

Higher taxes can be an incentive to invest. If a "'small" business is going to lose so much of their profit over $1 million to taxes, why not replace aging equipment? Why not hire more people? Why not give raises? Why not improve an existing product line? In many cases, profit is simply money not properly invested in growing the business.

This is exactly like the overpaid execs above. They can generate excellent profits at the expense of the business's long term health. That's obviously bad. The ideal is smaller, constant profits over the long term, not massive short term profits followed by long term loses.

I see what your getting at there. You basically want to regulate how a company uses its profits by imposing a tax that forces them to do just that. Its a sneaky way around the problem, but it wouldnt be the first time taxes were used to regulate decisions. But wouldnt that artifically limit how big a company would want to grow? What if that small business wants to be a big business? What about competing globally? It seems like your idea would really hamper growth potential.

No, I want to regulate executive salaries so they have incentive to run their corporation for the long term rather than bleeding it dry.

I don't believe my suggestion hampers growth. If you're making that much money as a sole proprietorship, you incorporate and that changes the rules. If you have that much money on the line, you're a fool if you don't create a LLC or corporation for yourself for liability protection.

As far as corporate profits, I generally favor lower corporate tax rates.

 

[SammyJr]

Originally posted by: K1052
Companies should do things listed in your post to stay competitive not because the government is pointing a financial gun to their head.

And that is exactly the problem. Many or most executives don't give a shit about being competitive. They don't need to be competitive when their goal is a massive golden parachute for themselves, regardless of performance.

Home Depot's CEO had a golden parachute in $200 million range and he didn't do shit for them.

 

[blackangst1]

Originally posted by: SammyJr

Originally posted by: K1052
Companies should do things listed in your post to stay competitive not because the government is pointing a financial gun to their head.

And that is exactly the problem. Many or most executives don't give a shit about being competitive. They don't need to be competitive when their goal is a massive golden parachute for themselves, regardless of performance.

Home Depot's CEO had a golden parachute in $200 million range and he didn't do shit for them.

Are you talking about Nardelli? The GE guy? He didnt do bad....he consolidated alot of HD's management and cut much of their waste...

 

[spidey07]

Originally posted by: SammyJr

Originally posted by: K1052
Companies should do things listed in your post to stay competitive not because the government is pointing a financial gun to their head.

And that is exactly the problem. Many or most executives don't give a shit about being competitive. They don't need to be competitive when their goal is a massive golden parachute for themselves, regardless of performance.

Home Depot's CEO had a golden parachute in $200 million range and he didn't do shit for them.

You don't know many execs then. Most all of them care very deeply about their company and it's performance as it's tied to their compensation. Have dinner with them sometime and you'll find your statement is completely false. Or play golf with them.

 

[K1052]

Originally posted by: SammyJr

Originally posted by: K1052
Companies should do things listed in your post to stay competitive not because the government is pointing a financial gun to their head.

And that is exactly the problem. Many or most executives don't give a shit about being competitive. They don't need to be competitive when their goal is a massive golden parachute for themselves, regardless of performance.

Home Depot's CEO had a golden parachute in $200 million range and he didn't do shit for them.

The board of the company is ultimately responsible for hiring the CEO and setting compensation levels. The main issues are how the members are appointed and what funds control large blocks of the voting stock which ends up producing a gigantic overpaid circle jerk. Addressing that makes a hell of a lot more sense than fiddling with the nation's tax structure in such a half-assed way.

 

[imported_Lothar]

Originally posted by: Engineer

Originally posted by: piasabird
So what happens when you make 10 Million? Dont you believe in capitalism? There are thousands of Millionaires in the world. Many of them like say buffett Have foundations where they use their extra money to help society in various ways like donating to the arts and educational institutions, libraries, etc. Attacking millionaires will only make life less worth living. Some of the largest contributors to needy organization that fight diseases like Aids, MS and Cancer are people that are millionaires or large Corporations. You better think twice before you attack people just because they happen to have made more money than you.

No I am not a millionaire. However, you or someone in your family may become one. Who are you to tell someone else how much money they can accumulate?

You must be a communist.

This is the 4th of July Weekend. Live free or die!

There were 10,000,000 millionaires in the US alone in 2007. That number has shrunk to 8,100,000 since the start of the recession though.

Is that after they subtracted the market value of their primary residence or are the inflated house prices still included in that calculation?
Liquid/illiquid assets or both?
I fail to believe that there are that much millionaires in the United States.

 

[spidey07]

Originally posted by: Lothar

Originally posted by: Engineer

Originally posted by: piasabird
So what happens when you make 10 Million? Dont you believe in capitalism? There are thousands of Millionaires in the world. Many of them like say buffett Have foundations where they use their extra money to help society in various ways like donating to the arts and educational institutions, libraries, etc. Attacking millionaires will only make life less worth living. Some of the largest contributors to needy organization that fight diseases like Aids, MS and Cancer are people that are millionaires or large Corporations. You better think twice before you attack people just because they happen to have made more money than you.

No I am not a millionaire. However, you or someone in your family may become one. Who are you to tell someone else how much money they can accumulate?

You must be a communist.

This is the 4th of July Weekend. Live free or die!

There were 10,000,000 millionaires in the US alone in 2007. That number has shrunk to 8,100,000 since the start of the recession though.

Is that after they subtracted the market value of their primary residence or are the inflated house prices still included in that calculation?
Liquid/illiquid assets or both?
I fail to believe that there are that much millionaires in the United States.

It's really not a lot of money anymore. Engineer is probably pretty close to one as are a lot of "normal people", myself included. I don't doubt for a second there are that many. It just isn't that big of a deal anymore.

 

[Kaido]

Originally posted by: Moonbeam
"It all boils down to incentives."

Sure it does. What ancient Greek was it that said that if this kind of thinking is true then ultimate happiness is scratching an itch that won't stop itching.

Our society isn't built on incentives, but the inculcation of endless needs and endless seeking, rats on a tread mill. Enjoy!

Needs are incentives. By default, you're incentivized to get food and drink, shelter and warmth. If you didn't have those, why would you work? If you had a million dollars dropped in your lap right now, would you still show up to McDonalds every day? Of course not, your incentive to work is gone. Look at what happens to the vast majority of Hollywood celebrities - they make millions off a movie, and since they don't have to work all the time, they go around seeking fulfillment in other places. Drugs, partying, alcohol - it ruins their life. No incentive to work every day...

But I'm not trying to make this a discussion about fulfillment, it's about incentives. Look at communism - how well did that turn out? Why should people (in general) try hard, if they aren't going to get rewarded for it? Remove incentives, remove innovation (for the most part). People aren't hard to figure out...most of us are addicted to paychecks. We'd all be fat, lazy, and stupid if we didn't have that in our lives, haha (well, at least I would be! lol).

I think that unlimited incentives is one of the things that makes America great - you are free to choose to do and be anything you want. If you choose to be poor, you are totally free to pursue that idea. If you choose to be rich, you are totally free to pursue that idea. No one is holding you down or pushing you back, because no one is there saying you can't go get another job or a loan or start a business or do anything you want to do. Bill Gates was your average nerd, started a business, made billions - and he's created thousands upon thousands of jobs, given the world a useful (albeit buggy) product, improved the economy, and given back to charity. If his cap was limited to $10 million, why would he have the incentive to earn more, if he didn't get any of it? Greed, the quest for personal improvement, and many other human attributes serve as motivators to pursue incentives, so if you take the incentives away, it kind of kills those attributes as things to motivate us to do stuff.

 

[Descartes]

Not a fan. IMO, a nation is most productive when it harnesses what many would consider the selfish desires of its citizens. Controlling it, or trying to prevent it, only leads to a slippery slope of slippery legislative red tape in an endless arms race between the government and people/corporations clever enough to work around them.

The issue here, imo, is not that some people ultimately achieve a worth greater than a certain number. The issue is that we sometimes have a hawk among pigeons, and the American reaction to the hawk is to outfit every pigeon with the burden of the hawk's presence. In my view, this often makes the hawk actually more productive, because it creates so much burden on the pigeons that they are no longer able to respond to the conditions. This is why we have countless small businesses shutting their doors and larger businesses being propped up. Larger corporations simply have more resources to combat the conditions.

I guess I don't have any answers.

 

[BlahBlahYouToo]

rofl, there goes all professional sports as we know it.
actually, not a bad idea then.

 

[1LordEmperor1]

Originally posted by: piasabird
So what happens when you make 10 Million? Dont you believe in capitalism? There are thousands of Millionaires in the world. Many of them like say buffett Have foundations where they use their extra money to help society in various ways like donating to the arts and educational institutions, libraries, etc. Attacking millionaires will only make life less worth living. Some of the largest contributors to needy organization that fight diseases like Aids, MS and Cancer are people that are millionaires or large Corporations. You better think twice before you attack people just because they happen to have made more money than you.

No I am not a millionaire. However, you or someone in your family may become one. Who are you to tell someone else how much money they can accumulate?

You must be a communist.

This is the 4th of July Weekend. Live free or die!

You mean help themselves by getting a disproportionate tax break?

 

[BoberFett]

Originally posted by: Descartes
Not a fan. IMO, a nation is most productive when it harnesses what many would consider the selfish desires of its citizens. Controlling it, or trying to prevent it, only leads to a slippery slope of slippery legislative red tape in an endless arms race between the government and people/corporations clever enough to work around them.

The issue here, imo, is not that some people ultimately achieve a worth greater than a certain number. The issue is that we sometimes have a hawk among pigeons, and the American reaction to the hawk is to outfit every pigeon with the burden of the hawk's presence. In my view, this often makes the hawk actually more productive, because it creates so much burden on the pigeons that they are no longer able to respond to the conditions. This is why we have countless small businesses shutting their doors and larger businesses being propped up. Larger corporations simply have more resources to combat the conditions.

I guess I don't have any answers.

To be fair, philosophers such as yourself often create more questions than they answer.

But you've framed the problem very well. How do you create incentive without destroying it?

 

[GuitarDaddy]

Originally posted by: Craig234
Actually, you're on to an interesting question, but you will get limited answers from people who have no idea about it. You might want to look for info available on this.

Of course, from the 1940's to the mid-60's, our own nation had a top tax rate of 91%, leaving a flatter distribution of wealth, but not too flat. Results were pretty good.

You would have to work out details like possessions counting towards the cap, but the bottom line is that you want people incented to be productive without being so powerful as to create an effective financial tyranny, where growth is lower to keep people serving the needs of the wealthy first and foremost (somewhat like the way that the rich under slavery were fine with the lost productivity from African-Americans not being educated and more productive on their own and instead giving 100% of less productivity to them.

You find that there are a lot of benefits to something towards what you suggest, more people getting to be entrepeneurs and more wealth to go around, less poverty.

Actually jut putting a cap at 10 million would need some mor econsideration, though, the higher top tax rate - like the 70% Kennedy 'tax cut' the right loves to praise - might be ok.

Anyone who says that those with tens of millions won't earn more with a 70% rate are having to ignore the history that they did with that and even the 91% rate - though 91% admittedly did lower growth and needed some balancing. It was a wartime rate - hm, maybe that's the solution to cool Republicans' heals on war, have a 91% top rate if they go to war. Suddenly the Iranians don't seem like such bad people...

Great post, and the period of the 1940- to 1960's was one of the most productive periods in our history especially in the area of personal incomes.

The OP's idea of limiting wealth could never work, but limiting yearly income through taxation is a very workable solution as our history shows and is endorsed by people like Warren Buffet and other notables.

Unforetunately our society has come to love the ultra rich, movies stars, sports stars, politicians, community leaders, etc... etc...., the ultra rich cross all political and social lines and will veimently fight any attempt to cap personal income and preserve their right to make 500x what a normal joe can make.

 

[spidey07]

Originally posted by: GuitarDaddy

Great post, and the period of the 1940- to 1960's was one of the most productive periods in our history especially in the area of personal incomes.

The OP's idea of limiting wealth could never work, but limiting yearly income through taxation is a very workable solution as our history shows and is endorsed by people like Warren Buffet and other notables.

Unforetunately our society has come to love the ultra rich, movies stars, sports stars, politicians, community leaders, etc... etc...., the ultra rich cross all political and social lines and will veimently fight any attempt to cap personal income and preserve their right to make 500x what a normal joe can make.

You contradict yourself and idolize Buffet and then in your second paragraph demonize him. Jealousy is such an evil emotion.

Smart people don't idolize people you describe. Why the hell do you guys hate freedom so much? I just don't get it. The ultra rich don't cross all political and social lines, they got that way because of freedom. Funny that the ultra rich do exactly as you describe - prevent freedoms from normal joe to be super rich...aka, a liberal.

 

[GuitarDaddy]

On the contrary, I don't idolize Buffet or subscribe to all his beliefs. I admire his inteligence and business ethic. And I share some of his ideas including the need for an inheritence tax to prevent legacy wealth.

And your implication that I'm jealous is laughable, if I were jealous of the ultra rich why on earth would I support a postion that limits personal wealth. And your tactics of emotional name calling and the "hate freedom" bullshit isn't an argument it's a tantrum and such a typical response these days from the right wingers that it's beyond transparent.

Your ideal that personal greed drives economic growth is also comic gold, the last 8yrs have proven that. We created an elite group of greedy bastards that created insane profit levels for certain industrys and ran the country straight in a ditch

 

[gingermeggs]

Originally posted by: TheSkinsFan

Originally posted by: gingermeggs
Yes' and say hello to a broader tax base and less need of government services-
A well off doctor might do a freebie here and there, like it's a bad thing!
I might help show my neighbor how to fix their leaking roof, for a beer of course!
People might have some time to give something back, so if your an anti-social, loner type it would be harder for you to get ahead of the pack. Like Paris Hilton who just bought a restaurant just to sack the staff that didn't want to play the "lick my rich boots" game! (stiletto boot I would imagine)

Your jealousy will eventually be your downfall.

And penis envy will be your down fall, thanks for your free psychoanalysis tiger*
I would argue jealousy is the primary motivator in the current system!

 

[gingermeggs]

Originally posted by: TheSkinsFan

Originally posted by: trooper11

I dont think its fair in our society to put any limits on what we can achieve, and that includes how much money or 'wealth' a person can accumulate.

there will always be those that take advantage of whatever system we have, all we can do is police it as best we can without stepping in the way of those wishing to work for it.

I understand the premise, that cutting off the level of wealth would spread more wealth around to those below it, but I just dont see why that can only be done be trampling on the ideals of prosperity. Our society (across the world, not just here) is based around a monetary system, so properity means money, wether you like it or not. I dont feel like I have any right to tell you how much prosperity you should be allowed to amass. If you work for it and do it in a 'legal' way, then Im going to appauld your efforts and use it as motivation in my own efforts.

I dont think its greedy to strive for great wealth. People do alot of great things with wealth, things no one talks about becuase talking about the few bad apples is more entertaining. Yes, greed is a dangerous thing that can make people do things they wouldnt otherwise do, but thats true for all of the vices in our society. If the goal here is to curb greed's impact on society, I dont see that changing at all just by capping wealth.

Until the world eliminates the need for money and bartering, greed will always be a force for those without any moral fiber. A cap does nothing but hurt those playing the game by the book, while those skirting the law still find their way around the system.

This. All of it. Well said.

/thread

like $7.5m isn't free enough?
Your idea of fairness is very self centered, you'd support a health system which has wealth as its priorty of triage too no doubt, people like you cut me up, and hell I don't envy your mentality for a nano-second.
Arguements here talk of a safe haven for those already too wealthy, well my arguement would be if you are 100x more powerful in millitary force that there is nowhere those people could hide, the thing is that those people we now speak of as victums in this "hypothetical" are the current reverse, who hold the trigger to even bill gate's head- who if he could would try and change things from the current senario. It will take a wave of civil strenght to stop this rot from continuing- you stand up alone you will be bought off or killed, pure and simple.

 

[gingermeggs]

Some missed the point I made about corporate legal entity, under my proposal the corporate law would change radically, all individual people would have their "annual income" taxed- no franks! No individual rights to a corp, directors, directly responsible for their actions. Share holders financially liable for those actions!
gasp!
Like at some point there must be a rational!
That point is coming fast- like it or not!
My whole idea is about a merger of ideologies which creates the greatest civil return(which is what democracy and freedom are founded on).
Thanks for all contributions, both good or bad, we have expressed a freedom we all enjoy, rich or poor.

 

[JeffreyLebowski]

Originally posted by: SunSamurai

Originally posted by: JEDIYoda
This belongs in OT!!!

No, this belongs in its own special place. (trash)

Pretty much. Anyone that could seriously support this idea or thinks that limiting ones wealth needs to go start their own communist country.

 

[irwincur]

Would this also apply to athletes and movie stars? How about politicians who make a lot of their money off the 'books'?

I suspect that any policy like this would not include these groups.

 

[TheSkinsFan]

Originally posted by: gingermeggs

Originally posted by: TheSkinsFan
Your jealousy will eventually be your downfall.

And penis envy will be your down fall!

:roll: sure thing kiddo.

Originally posted by: gingermeggs
like $7.5m isn't free enough?

no.

Your idea of fairness is very self centered, you'd support a health system which has wealth as its priorty of triage too no doubt, people like you cut me up, and hell I don't envy your mentality for a nano-second.

You've made it abundantly clear what it is you "envy."

Arguments here talk of a safe haven for those already too wealthy, well my arguement would be if you are 100x more powerful in millitary force that there is nowhere those people could hide, the thing is that those people we now speak of as victums in this "hypothetical" are the current reverse, who hold the trigger to even bill gate's head- who if he could would try and change things from the current senario. It will take a wave of civil strenght to stop this rot from continuing- you stand up alone you will be bought off or killed, pure and simple.

:Q wow man, you're militant socialist fantasy is getting just a tad bit creepy at this point. Did you honestly just endorse the wholesale slaughter of the wealthy?

seek help.

 

[Fern]

Originally posted by: gingermeggs
I was thinking! the other day, If you say had a legal cap on the personal wealth of any individual citizen of a nation- say 10million USD any thing over that amount would be either taken by the gub' or given to charities.
-snip-

Yeah, nutty idea - you'd have to change the Constitution.

Plus, anybody with that kind of money would have it transferred overseas and be long gone before the ink on the new law dried.

Fern