The difference is that with a pay cap, no matter where an executive works, he gets paid the same. He has no incentive to compete against his peers. Within a high tax-bracket (with no pay cap), instead, executives have incentive to compete, because their salaries are able to differ from one-another.
Yes, it is. Reed Hastings' proposal is, however, not just for companies that take government money.
Perhaps a starting place for "tax, not shame" would be creating a top federal marginal tax rate of 50 percent on all income above $1 million per year.
That isn't to imply that there are not healthier alternatives. Andrew W. Mellon advocated a flat income-tax rate of 10%: http://www.archive.org/stream/taxationthepeopl033026mbp/taxa...
the Government received substantially the same revenue from high incomes with a 13% surtax as it received with a 65% surtax. It is not too much to hope that some day we may get back on a tax basis of 10%, the old Hebrew tithe, which was always considered a fairly heavy tax.
American companies compete with international companies for executives.