https://www.cnn.com/2020/01/15/success/abigail-disney-california-ceo-pay/index.html
I had an interesting discussion with one of my coworkers yesterday. He shared an article, which I have linked above. During this discussion, he asked my opinion of the article. The gist of the article is a 4-8% tax on businesses that make over ten million dollars. The problem I have with it, is that when a tax is raised on a business that it will invariably pass that additional cost to the consumer, since that’s how business works. It was upsetting to him that the CEO of companies like Disney make thousands of times as much as their median worker, and that during the conversation his thoughts on said CEO’s salary was, “it’s obscene.”
It was an interesting comment to me, and that leads me my larger thought on the topic. How much is too much? As a libertarian, I am in favor of people earning as much money as they can negotiate for themselves, either individually or collectively. I believe that people’s wages and salaries should be the determination of the market, meaning whatever the business can afford to pay said person. I am a free-market capitalist, leaning toward a laissez-faire style, combined with a relatively minarchist political belief. I am an ardent believer in the responsibility of the individual to determine their destiny. All that being said, I reiterate my initial question, how much is too much?
In an ideal world, those who have a lot should share willingly with those who do not. Everyone should pay the same rate of taxes, since it is equal. And charity should comprise the majority of aid to those who have less and are in need. But alas, it is not an ideal world. People are self-loving creatures, deriving enjoyment from those things that help give them a sense of pleasure and happiness. Whether it is from helping others or doing drugs, people will find a way to get that fix of happiness, regardless of the consequences. That is not saying that everyone is equal in this pursuit of self-gratification. Rather, everyone is self-gratifying and capable of finding a point in themselves in which they are comfortable achieving that self-gratification. But that still doesn’t answer the question I posed at the beginning. How much is too much?
Well, to answer that I needed to give a brief summary of my personal beliefs and my thoughts on the ideal and real worlds. My personal belief is that one should earn as much as their abilities allow. But that belief is coupled with an equally strong belief. One should be able to take care of oneself, and anything earned in excess of that should be used to take care of others.
We live in a society that has removed the individual’s burden of responsibility and placed it in the hands of faceless, nameless organizations occupied by unknown and distant bureaucrats and funded by money levied by taxes on our own labors. And we believe that this is a just and moral thing to pay taxes because it goes to “help” those who are less fortunate than we are. And yet those who suffer from mental health issues, addictions, homelessness, and the unfortunate twists of life still exist. Our taxes go to fund projects that have little to no impact on our direct lives, and have little to no effect on those who actually could use the money. Furthermore, this feeling of moral satisfaction that we get because we “paid our taxes,” satisfies our need for self-gratification simply because we are “doing our part.”
I do not envy the CEO of a large company. I do not possess the necessary skill set and relevant experience and network to accomplish the things that they do to help organize and maintain such a large organization. But, I do believe that they have a moral obligation to help those beyond themselves. But the difference between myself and my coworker is how that help must be generated. A CEO, in his opinion shouldn’t make that much money. His opinion is as valid as mine, though again it is interesting to add the bit about it being “obscene” that he makes so much money and doesn’t help anyone. Therefore, the government should raise taxes on that entire company as a punishment for paying their CEO hundreds or thousands of times more than their average (median) worker. What he, in my opinion, fails to grasp is that a collective punishment for an individual doesn’t work, and it ends up causing more collateral damage and unintended consequences than it reaps from its intended target.
So as a thought experiment, Company A, located in San Diego (my hometown), makes twenty million dollars. The median employee salary is $10,000. The CEO of the company makes fifteen million dollars ($15,000,000). That is 1,500 times the median salary for this company, and therefore is subject to an additional 4% tax for the entire business. That equates to $800,000 of revenue lost to taxes. In order to generate a profit, Company A must now find a way to recoup $800,000 of lost revenue. There are a number of ways that the company can achieve this end: A direct raise of prices to their customers, streamlining of production, consolidating labor costs, reducing bonus pay to employees, or relocation out of the state. All of these options get used as a way to best manage this increased tax burden, and all of them have an impact on not only the employees of the business, but the communities of those employees. In response to this tax burden, Company A reduces the Christmas bonus of their employees, in addition to not replacing retirees, and automating parts of their business. The community now has less money injected into it because $800,000 is being siphoned to pay for this new tax burden.
My coworker would say that the business is evil because it passes the burden along to the customer and robs the community of money, and that it is immoral for them to do so. My opinion is that the business is responding to this new burden in the way it knows how, and that the impact to the community is an unfortunate consequence of poor legislation. In an effort to reduce the salaries of CEO’s (the intended target) by legislation, lawmakers are causing significant collateral damage to local communities and those peoples that they purport to champion. It is the equivalent of using a saw to perform surgery. No matter how delicate the hand, an improper tool will never yield the desired results.
So how much is too much? I would say that too much is using the force of government to steal from the community, and that the individual is morally responsible to take care of those they can beyond what they need for their own comfort. And unfortunately, since comfort is a subjective metric, it makes it difficult to objectively legislate without incorporating a moral bias onto it.
A Place 4Politics 