I found this article in Fortune on Portland’s new tax on excessive compensation for CEOs of companies doing business in Portland remarkably uninformative. Here’s what it said:
- Portland has imposed a 10% surtax on companies that pay their CEOs more than 100 times the median employee pay and a 25% surtax on companies that pay their CEOs more than 250 times.
- Businesses don’t like it.
- The system can be gamed.
Where’s the beef? That’s a paragraph not an article.
I immediately saw the easy way to game the system: farm out all the lower paid jobs to contractors. A lot of companies already do that for different reasons, but this one is a gimme.
The article seems to focus a lot on what youngsters mockingly call “muh feelz”. Not a good way to create policy.
Just to go a bit weird on this, can capitalism continue to exist and be a successful economic model, absent moral behavior on the part of the capitalists? If the highly compensated put their wish to be highly compensated above everything else, how does that play out in the long run?
Steve
@steve
Just to go a bit weird on this …
I would not say it was weird or out of place, but I would change it a bit. First, capitalism and capitalist is rarely ever defined, and if it is, it is usually too broad to be of any use for a productive debate.
Corporations are probably a better entity as they are they problem children, especially the national and international variety.
Morals are another problematic concept. While they are often defined, there are multiple definitions agreed upon by a large number of people. Ethics can be less of an issue, but there still needs to be an agreed upon framework rather than a list of rules.
Corporations are responsible to their locations. They would not exist otherwise. They derive benefits and services from the government and citizens as a producer but. also, as a supplier. Many foreign producers would not exist or would not be as large without the US market, and therefore, they have some obligation to the well being of the market that their well being is dependent upon.
This is true for the domestic corporations and non-incorporated companies where applicable, but none of these entities are sentient being capable of making decisions. The decisions that any company makes has been made by one or more person(s), and they are responsible for the outcome.
In the military, there are the Army, Navy, and Air Force. The Secretary of the Navy could not order 1st Marine Division to annihilate a city in Italy and have “the Navy” take the blame for it. Not only would the Secretary of the Navy be charged with a War Crime every Marine and Sailor who participated would also. There is no “I was just following orders”, but you know this. Why do corporations get to say “oopsie”?
In my world, they would not.
Regulations need to be a simple framework in which companies operate, and the purpose is to notify them of what the boundaries are. There should be incentives to stay within the boundaries, and there should be onerous disincentives to stray outside. By disincentives, I do not mean punishments, but those should be included as well.
One disincentive for accounting infractions would be to host an on-site government accountant(s) for some period of time. This person would audit all activity he/she/they thought necessary, and any infraction of any rule, whether related or not, would earn them a finders fee. An electrical outlet not wired properly would be reported, and they would get a finders fee. If the infraction was serious, it would trigger more on-site government personnel and more intrusion into the company’s business.
A shithead company would soon learn that being a shithead was not cost effective, and the rest of the industry could clean house or join them.