History of the Estate Tax

[BlueStreak]

Originally Posted by ebacon

These kinds of assholes sure aren't the ones that invent stuff like Rearden Metal. All they have ever invented is ponzi schemes and Atlas Shrugged is their advertising material.

Right, that's something I have been pondering for years. We are told that these guys are "innovators" and "creators"...............

What is so innovative or creative about embezzlement? Legalized embezzlement, I'll grant you, but embezzlement nonetheless. Engineers, scientists and researchers are innovators who create new technologies and processes. The managers and accountants are simply supposed to manage the money. If they are "managing" the money in such a way that does little more than direct more of the money into thier own wallets and away from the innovations that create opportunity......They haven't "innovated" or "created" anything but thier own artificially elevated financial status.

And, what good is that to the business, or the greater society?

If you really want to fix what is wrong with American industry, this is the key.
EVERYONE, not just the people at the bottom will HAVE to start doing more what is healthy for the group and LESS of what simply serves personal ambition and greed. A CEO is an EMPLOYEE and there is no sensible reason for one employee to make 350 times what his fellow employees make. That is utterly ridiculous. Should he/she have reasonable financial incentive? Absolutely. The question is; What is reasonable?

For my part, I don't trust the magic hand of "market forces" to address this. Principally, because I don't believe this notion that "the market" has a mind of it's own, not entirely, anyhow. Internal corporate politics, the buddy system, quid pro quo, corrupt oligarchs...there are too many ways for these guys to be disproportionally and unjustly compensated to the detriment of the business and society as a whole.

Problem is; How do we fix this?

Dave

[beej]

Originally Posted by BlueStreak

Right, that's something I have been pondering for years. We are told that these guys are "innovators" and "creators"...............

What is so innovative or creative about embezzlement? Legalized embezzlement, I'll grant you, but embezzlement nonetheless. Engineers, scientists and researchers are innovators who create new technologies and processes. The managers and accountants are simply supposed to manage the money. If they are "managing" the money in such a way that does little more than direct more of the money into thier own wallets and away from the innovations that create opportunity......They haven't "innovated" or "created" anything but thier own artificially elevated financial status.

And, what good is that to the business, or the greater society?

If you really want to fix what is wrong with American industry, this is the key.
EVERYONE, not just the people at the bottom will HAVE to start doing more what is healthy for the group and LESS of what simply serves personal ambition and greed. A CEO is an EMPLOYEE and there is no sensible reason for one employee to make 350 times what his fellow employees make. That is utterly ridiculous. Should he/she have reasonable financial incentive? Absolutely. The question is; What is reasonable?

For my part, I don't trust the magic hand of "market forces" to address this. Principally, because I don't believe this notion that "the market" has a mind of it's own, not entirely, anyhow. Internal corporate politics, the buddy system, quid pro quo, corrupt oligarchs...there are too many ways for these guys to be disproportionally and unjustly compensated to the detriment of the business and society as a whole.

Problem is; How do we fix this?

Dave

The problem with the 'market forces' approach to anything is that it is much to vulnerable to manipulation. Moreover, I often wonder how those who are screaming for less government interference would react were they to lose the favorable treatment that they enjoy under our present tax structure.

[BlueStreak]

Originally Posted by beej

The problem with the 'market forces' approach to anything is that it is much to vulnerable to manipulation. Moreover, I often wonder how those who are screaming for less government interference would react were they to lose the favorable treatment that they enjoy under our present tax structure.

Right. If you go to a flat tax or some new system that has no loopholes or exemptions, no way around paying the tax.....watch what happens. My guess is, the whole process of lobbying for loopholes and expemptions will get a new life and we end up right back where we are anyways.

Remember, these folks are always trying to make more money, and/or pay less out regardless of their contemporary situation. So, do you really think that if we gave them what they want today, that they are going to stop complaining and trying to get out of paying that, no matter how small it is?

Dream on.

Dave

[finnbow]

Originally Posted by BlueStreak

Right. If you go to a flat tax or some new system that has no loopholes or exemptions, no way around paying the tax.....watch what happens. My guess is, the whole process of lobbying for loopholes and expemptions will get a new life and we end up right back where we are anyways.

Dave

If history is any lesson, that's exactly what would happen (as it did after Reagan tweaking the tax code).

[ebacon]

Originally Posted by BlueStreak

Problem is; How do we fix this?

Dave

That is a question I pondered a few years ago and came up with some ideas. I tossed them out on a board and got exactly zero replies. Nothing but crickets. Here is a quick rehash. Unfortunately my old post is gone and I can't retrieve it.

Profit motivation theory, or self-interest theory, or whatever people want to call it, works best when the the person making the money also has a risk of losing it all. That's the way small businesses work.

The problem with a publicly traded corporation is that the executives inside of it don't risk any real loss. At best they risk reducing their income to zero fi thins go totally down the toilet. This is because the corporation is a legal structure similar to a trust. Once it runs out of money the debt collectors can't cross over and get money from the executives or employees. That is assuming of course that they operated above the board and a merely lost the game in the marketplace. If they behaved badly then the courts can "pierce the corporate veil" and go after the people. That is rare and almost always fruitless. After all the people don't have enough money make diddly squat of a difference.

The other problem with giant corporations is that they are capable of making messes so big that only the government, which in the end is us taxpayers, are capable of cleaning up.

With that background here are the ideas I came up with and the problems that I see they might create.

First, CEO pay is limited to the President's pay. That is because if corporations and government are capable of making the same size messes with other peoples' labor and no risk of repercussion then their bosses pay should be capped likewise.

The obvious unintended consequence would be that congress would ratchet the President's pay up to $50M/year and their own up to $1M a year or some shit like that.

Second, we need an opportunity for real innovators to have access to capital but not so much that they can make a giant mess. Those people would be given the opportunity to run closely held corporations and make as much money as they can. They would not be subject to the income limit. Examples of such corporations include Bose, Patagonia clothing, etc.

The problem is that another example is Koch Industries of the famous Koch brothers. Those guys wouldn't be so bad if they could keep their cotten pickin' fingers out of the political process. The old rules served them quite well. That they want to erase those rules so they make even more money is unconscionable IMO.

I think that was about the extent of my ideas.

They way I see it is we have been brainwashed with math. We've been taught to look at CEO salaries as dismissible percentage of the big picture and fair compensation. That's an easy argument to make. The problem is that it never accounts for executives that moved enormous amounts of money by digging a big hole for taxpayers to fill.

There is good book about the science brainwashing of America. It is called "The Closing of the American Mind". It's dry as hell but I found it interesting.

[beej]

Originally Posted by ebacon

That is a question I pondered a few years ago and came up with some ideas. I tossed them out on a board and got exactly zero replies. Nothing but crickets. Here is a quick rehash. Unfortunately my old post is gone and I can't retrieve it.

Profit motivation theory, or self-interest theory, or whatever people want to call it, works best when the the person making the money also has a risk of losing it all. That's the way small businesses work.

The problem with a publicly traded corporation is that the executives inside of it don't risk any real loss. At best they risk reducing their income to zero fi thins go totally down the toilet. This is because the corporation is a legal structure similar to a trust. Once it runs out of money the debt collectors can't cross over and get money from the executives or employees. That is assuming of course that they operated above the board and a merely lost the game in the marketplace. If they behaved badly then the courts can "pierce the corporate veil" and go after the people. That is rare and almost always fruitless. After all the people don't have enough money make diddly squat of a difference.

The other problem with giant corporations is that they are capable of making messes so big that only the government, which in the end is us taxpayers, are capable of cleaning up.

With that background here are the ideas I came up with and the problems that I see they might create.

First, CEO pay is limited to the President's pay. That is because if corporations and government are capable of making the same size messes with other peoples' labor and no risk of repercussion then their bosses pay should be capped likewise.

The obvious unintended consequence would be that congress would ratchet the President's pay up to $50M/year and their own up to $1M a year or some shit like that.

Second, we need an opportunity for real innovators to have access to capital but not so much that they can make a giant mess. Those people would be given the opportunity to run closely held corporations and make as much money as they can. They would not be subject to the income limit. Examples of such corporations include Bose, Patagonia clothing, etc.

The problem is that another example is Koch Industries of the famous Koch brothers. Those guys wouldn't be so bad if they could keep their cotten pickin' fingers out of the political process. The old rules served them quite well. That they want to erase those rules so they make even more money is unconscionable IMO.

I think that was about the extent of my ideas.

They way I see it is we have been brainwashed with math. We've been taught to look at CEO salaries as dismissible percentage of the big picture and fair compensation. That's an easy argument to make. The problem is that it never accounts for executives that moved enormous amounts of money by digging a big hole for taxpayers to fill.

There is good book about the science brainwashing of America. It is called "The Closing of the American Mind". It's dry as hell but I found it interesting.

Interesting ideas. If I may add but one? Through whatever legitimate process is available under our system of government reverse the determination that a corporation has the same standing as a human being. Will it have the same business ramifications as it does political? I have no idea but the Citizens United decision just pisses me off.

[BlueStreak]

Just ordered that book. It seems right up my alley.

I like the idea of caps, but can only imagine the political backlash as EIB, Clear Channel and Fox send their tools into the streets to protest on behalf of their masters. The Tea Party would be livid, I'm sure.

And, I think you're right. If we set the cap at Presidential pay, the next thing we know we would be paying the president $1,000,000,000 a year.

Dave

[ebacon]

Originally Posted by beej

. . . the Citizens United decision just pisses me off.

+1. That was a brain dead decision, particularly considering the justices had the benefit of hindsight by seeing the effects of Kelo v New London and Pfizer walking out of town just a few years later. What a mess.

The power of Pfizer's penis pills is amazing. They must make men think with their little heads instead of their big ones. Speaking of which, think I'll go watch Fox News and rub one out to their blondes with high split skirts.

Balls.

[beej]

Originally Posted by ebacon

+1. That was a brain dead decision, particularly considering the justices had the benefit of hindsight by seeing the effects of Kelo v New London and Pfizer walking out of town just a few years later. What a mess.

The power of Pfizer's penis pills is amazing. They must make men think with their little heads instead of their big ones. Speaking of which, think I'll go watch Fox News and rub one out to their blondes with high split skirts.

Balls.

Eminent Domain indeed! How that was determined to be 'in the public good' is also beyond my cognitive reach. I live a short drive from the area Pfizer laid waste. Pretty pathetic.

About the only redeeming worth Fox has are the looks of those babes (certainly not their brains) and NFL coverage.

[finnbow]

Originally Posted by beej

About the only redeeming worth Fox has are the looks of those babes (certainly not their brains) and NFL coverage.

Pretty, blonde and dumb is one thing (and attractive to many). Pretty, blonde, and manipulative is another thing altogether.