There have been two major issues that keep appearing on the news week after week.  The first issue is the health care debate.  This may be resolved soon, or sometime next year, with the longer it takes to get passed, the less likely it is to pass.

The second issue that keeps getting the public riled up is the issue of executive pay at large companies.  Some places have been reined in, specifically ones that have received government bailout money.  There is also talk about giving shareholders the right to vote on executive pay.  However most stocks are not held by individuals but by companies who couldn’t care less about how much executives make.

Obviously many people are against changes to the health care system and my point is not to address individual problems with the health care proposals.  One major sticking point is going to come down to the price of the proposal.  This is what I want to address in an attempt to fix two of the major problems that are in the news today.

Rather than putting a cap on the pay for executives, simply add a tax to the bonus compensation.  If Company X wants to give $50 million in bonuses to their executives, let them do it, but require them to contribute an additional $50 million towards the price of whatever health care plan is passed.

The public won’t care nearly as much about executive pay if they know that much of that money is going to the government to fund a program that they are interested in and ultimately will keep them from paying higher taxes to pay for this program.  If a company gives out $50 million in bonuses, 40% of this will be paid back to the government in individual taxes, which adds up to $20 million.  Add to the $50 million that the company will pay in taxes and that is $70 million that goes to the government and only $30 million that goes to executives.