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Comment by mc32 | Hacker News Reader

And it’s not only a problem at for profit organizations but also a problem for so-called NGOs and other non-profits —who you’d think would be different…

Screw it, tax them progressively for every multiplier above the average Jack and Jill’s pay —with adjustments for company size and whatnot.

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Never mind the multiplier. Bring back 90% marginal tax rates.

The ones that had numerous loopholes causing the effective rate to be similar to what it is today? Sure, have at it, but it's not going to have the effect you want.

If you think anyone is going to pay an effective tax rate of 90%, I'm not sure what to tell you.

Of course they're not. In a progressive system that uses marginal rates, there's little point in giving someone a raise when they're in the 90% bracket, so nobody is going to be paying a 90% effective rate on all their income.

The point isn't to actually collect $90 million in taxes from a CEO paid $100 million, the point is to discourage that kind of ridiculous pay package in the first place.

In reality, the people who earn that much will do what it takes to avoid those taxes, including moving themselves or their business to someplace that won't confiscate their income if needed.

Somehow I don’t think Starbucks is going to move overseas.

Anyway, most CEOs don’t own a majority share in their company. I’d like to see a CEO try to argue for a massive transformation of the company just so they can personally be paid more. Shareholders should boot them out pretty fast.

Most CEOs do own a majority share in their company, because they are very small businesses.

But even talking about publicly traded companies and their private equivalents in scale, plenty of them move their HQ when it makes financial sense to do so and have non-US entities that could employ their CEO so he or she could do the same.

I have no idea why you think Starbucks, with thousands and thousands of locations outside the US, wouldn't consider employing their CEO out of a non-US location to let them avoid a confiscatory personal income tax rate.

I have no idea why a large company would consider such massive disruption just to save a single employee some money. The CEO works for the company, the board, and the shareholders, not the other way around.

Because it's not a massive disruption? The CEO of Starbucks currently commutes to the office for his 3 days a week of in person work from southern CA to Seattle via private jet.

Would it be a massive disruption if he commuted from Canada or Mexico (which do not have a 90% effective marginal tax rate and I'm sure would be happy to have high income earners from the US show up and pay taxes in their country) instead?

Weren’t you talking about moving the entire HQ? Commuting from Canada or Mexico wouldn’t help at all. The US is going to want its taxes if you’re working in the US. It even wants its taxes if you’re not working in the US, if you’re a citizen. If our hypothetical CEO was a citizen, they’d have to renounce it, and move company HQ out of the country, and move themselves out of the country. If they’re not a US citizen then they just need the last two.

Also the 90% was only charged on income OVER a fairly high amount. I think it was the equivalent of income over $2 million.

At some point do we need to make it a law to not compensate anyone more than x times the lowest worker salary?

That will never happen in the US as long as the current iteration of the Republican Party has any power to stop it, which is given to them by people continuing to vote against their own interests and thinking that billionaires are what “makes America great”.

The democrats are just as guilty of this.

There was bi-partisan support for blocking congress from trading due to clear insider trading and the Democrats refused to support the bill.

Democrats were also the ones to move all manufacturing to China, which hurt the American worker more than anything we've done in the past 20 years. If the democrats were actually serious about the working class, they would've let Bernie compete against Trump.

this would greatly diminish meta's ability to hire ai researchers

I'm already sold, you don't need to sweeten the deal further.

Their competitors like Google and OpenAI would also be subject to the same salary cap.

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