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.
