Got excess CEO pay? Then make the company ineligible for tax deductions.

Some have said that the government shouldn't interfere with executive pay. While that may be arguably true, shouldn't the companies that over pay their executives pay their full tax responsibilities Before they give their executives big payouts?

This is particularly true since someone must pay for the excesses of the bush presidency. Besides, the point of tax deductions has always been to achieve some sort of social goal. So why should these companies that overpay their executives receive tax deductions? Most American companies have benefited from bush's bloated spending so they certainly owe the government.

Big corporations should pay the taxes they owe and Then they can pay their incompetent executives their undeserved bonuses.

Except the freepazoids that somehow, in their deranged mindset, can justify it...

Yes, they should pay their fair share. Or at least get the fuck out of lobbying government officials if these corporations keep saying that don't want government or anything else to interfere. Should it not work both ways?

Won't ever pass, but it's a lovely dream.

I just want to see a 100% tax on any income over $250K for individuals, and 100% on any corporate profits over $1Mil. The additional tax funds would flow to the govt. where it would do some social good instead of being wasted on fatcats.

Of course, the repukes would block passage of this but the answer to that problem is to have fewer stupid repukes.

$250K is not a big salary in some parts of the country - it doesn't go that far in New Jersey. I am sure that numerous Democrats make well over $250K. Let's say you make $500K - would you work for free for six months? Didn't think so. Why would anyone else?

You're on the right track -- if you think, as I do, that the right track would look something like the fairness in the mixed economy of the 1960s.

The government iirc, did not regulate exec pay directly but used the tax system.

First, you have to understand the connection between exec pay and taxes (which you may already). The money a corporation takes in is revenue. They deduct all their expenses and costs of production from revenue, and what's left over is "profit". The govt taxes profits, not revenue -- hence the corporate tax taxes corporate profits.

Included in expenses is the wages and salaries the corporation pays out. If I own a restaurant, and my revenue is $100,000, but pay waiters, cooks, etc., $80,000, then my profit is only $20,000. That's what I'm taxed on.

In a big corporation, those giant executive salaries, therefore, are deducted from revenue in order to calculate profits -- the amount the government taxes.

Long ago, the government realized that corporations could siphon revenue away without paying taxes by inflating executive pay. In my example of the little restaurant, if I saw that my profit was going to be $20,000, I could declare that I had paid myself, as manager, $19,000 executive pay, and I would reduce my taxable profit to just $1,000.

So the govt used to be vary wary of giant exec salaries as a way of avoiding taxation.

The solution was to figure out what reasonable exec pay was. Then the govt would say any exec pay over that amount cannot be deducted as an expense of doing business.

The effect wasn't to prevent the corporation from paying that enormous pay. But the effect was that the corporation would in effect pay much more in taxes, in effect paying tax on revenue, rather than on profit.

In other words, exec pay is tax free to the corporation. These old rules made excessive exec pay taxable to the corporation.

The people who were hurt by this, however, weren't the executives. It ws the stockholders, because it reduced profits (which ordinarily are distributed to shareholders) by subjecting them to excessive taxes.

So the second part of the solution was to work with the SEC and force the corporation to tell the shareholders, "hey shareholders, management is reducing your dividends by paying excessive pay to management, and subjecting the corporation to penalty taxes!"

Shareholders would vote management out of office if they did that.

The problem with recreating this system today is that shareholders are powerless these days. Management is so brazen, they would probably subject the corporation to penalty taxes, reducing shareholders dividends. After all they are already ripping off shareholders in so many ways.

We also need much higher taxes on the income as paid to the execs.

You'd hardly know it... with all the tax breaks they got written into the law, many of these corporations, no matter how large, pay little to nothing at all. We may even possibly be better off eliminating corp tax altogether; for the pittance that is actually collected we seem to get an outsized share of bribery and corruption. Tie that together with elimination of corporate personhood and it ought to make for a lively debate!