Ruben Bolling at 9:00 am Wed, Nov 9, 2011
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Hannibal: Guilt is a divine beast of burden in "Su-zakana" [Season 2, episode 8 recap]
Hah! This is the best Hollingsworth Hound in a long while. Excellent rebuttal to the whines of so-called “job creators” bemoaning the mere thought of having to pay taxes at rates equivalent to those during the Reagan era.
We could raise the taxes of everyone who makes more than $1 million to fifty percent, far more than they paid under Reagan.
Assuming none of them modified their behavior as a result, this would generate about $130 billion in revenue or roughly one-tenth of what it would take to balance the current deficit.
If your plan is to find the remaining $1.17 trillion through reducing Federal expenses, I think I could get on board with you.
Most people that are for a more egalitarian tax rate would probably like to stop pissing money down rat holes in Iraq and Afghanistan too.
And while we’re at it, maybe we could stop pissing on the people who live there, too.
The “job pretenders” are running out of lies to help them avoid taxes. My current favorite is “If you make me (or my Corp.) pay taxes, I (or the Corp.) will just leave the USA and go to a country that taxes less”.
The only countries I am aware of that tax less than ZERO (the effective tax rate that many US corporations pay) are wonderful places to Live, Work, Shop, Play (and raise kids)
Somalia, Liberia, Sierra Leone, Sudan, Afghanistan… come to mind.
Sure there may be some places that have lower rates, but the extra $$$ that must be expended for safety alone will more than make up for the difference.
‘My current favorite is “If you make me (or my Corp.) pay taxes, I (or the Corp.) will just leave the USA and go to a country that taxes less”.’
…which they already do anyhow, shipping jobs overseas.
Yeah. Like CEO’s know how to run a country…..
Great comic! But where’s Lucky Ducky?
Thanks, Ruben Bolling, for explaining why the death of Steve Jobs was no great loss.
The only innovative guy on Earth……..
You’re reading a different comic to this one.
If CEOs are that fungible, that easily replaced, then it doesn’t matter how or why they stop doing the job. Went on strike, hit by a bus, layed low by cancer. Gone is gone.
…except that most CEOs don’t have the level of involvement with the product that Steve Jobs did, nor the insight into what makes the user experience “good”. He may be replaceable, but not nearly as easily as the CEO of pretty much any other large company you can name.
If there’s a product or service out there you like, chances are very good that the CEO works very hard to make it so. Most of them just don’t have Steve Jobs’ flair for self-promotion. At the very least, think of how much damage a bad CEO can do. There is a distinction between the ones who earn their wage, and the ones who don’t, but the income tax code doesn’t make that distinction. Raising taxes on “the wealthy” because some CEOs managed to finagle excessive compensation from their cronies on the board is far too blunt an instrument. There are all sorts of targeted measures you could take to punish those people. Tax golden parachutes over 1 years’ salary at 95%, say. Or regulate the FIRE economy to make big payouts from financial gambling less common, enticing people back into the real economy of making stuff and serving people, where striking it rich means actually doing something customers are willing to pay for. Or tax executive compensation above a certain level at a higher rate unless it’s deferred, creating an incentive for longer time horizons. I’m sure there’s tons of other ideas we could come up with.
But none of that is as fun as simple class envy.
‘Class envy‘? Is it physically possible to be so disconnected from the real world that you would even think of that term, much less use it?
You prefer maybe ‘class hatred’? No? What other term would you use to describe a negative response to wealth, with no regard for the means by which it was acquired?
‘A complete misunderstanding of public opinion and economics’. That would work.
What’s funny is that you’re describing a system by which a CEO’s financial compensation (or lack thereof) is directly tied to the success of the company in the same breath as you basically shrug off Steve Jobs as just another CEO, and yet he was a CEO that self-imposed exactly the sort of regulation that you’re talking about.
He earned a salary of just $1 per year, and the rest of his compensation came in the form of Apple stock. His financial well-being was directly affected by the well-being of the company. If the company made bad decisions, the stock would tank, and so would his own finances.
If anything, we need more CEOs like him, who are willing to voluntarily make the success of the companies they run crucial to their own success. Or was your first comment just a convenient excuse to work out a little Apple hate while staying tangentially on-topic?
Sarcasm fail. I’m not shrugging Steve Jobs off. Quite the opposite. He was one of the good ones – at least in this regard. You are absolutely right: We do need more like him. But simply raising taxes on “wealthy CEOs” punishes Steve Jobs and those like him just as much as those CEOs who arrange to get paid regardless of performance. Steve Jobs demonstrates that there is a difference, and that if we penalize them all equally for their success, regardless of how that success was achieved, there’s no incentive to be one of the good ones.
You got a unicycle for that backpedal?
If there’s a product or service out there you like, chances are very good that the CEO works very hard to make it so.
And the ones who run businesses into the ground and still get hundreds of millions? How do they fit into your fairy tale fantasy mythos narrative?
BP execs got fat bonuses for best year of “safety”. I’d hate to see a bad year…or even a so-so year…
On top of that BP is writing off the entire 10 Billion dollar cost of the spill and will likely actually get 3 billion dollars back. They’ll be making profit off of it. And guess who will be paying for that 13 Billion dollar write-off? We will.
Two to a 6×9, that’s how they fit.
Great post. (Seriously. That wasn’t sarcasm. Very, very excellent ideas.)
The only point I have is this: “At the very least, think of how much damage a bad CEO can do.”
The problem is that bad CEOs don’t get punished. They get millions of dollars in compensation on their way out the door, no matter how much they screw up. Look at Carly Fiorina — under her leadership, HP all but folded, yet she got millions upon millions in compensation.
Until we fix the incestuous nature of corporate boards — where the top tier of earners reward each other, no matter what — not much will probably change in that regard, as they’ll find some loophole to the tax on golden parachutes you suggest (which is a fantastic idea, BTW).
I agree. Let’s punish them. Real punishment. Not just taxes, which they consider just a cost of doing business. Hey, if you’re stealing it all to begin with, what kind of penalty is having to give some of it back?
So, ernunnos, you’d introduce all these fantastic, perfectly-targeted incentives… and then, a day later, I bet you’d complain about all the excessive regulation that makes it impossible for businesses to grow and create jobs, and can we please give a break to all those poor CEOs sweating it out there?
Come on, let’s be honest. Since the 80s, the ruling class in the US has had it way too good; now it’s time for them to give back.
Ok, I’ll take that bet.
I guess your comparison wasn’t as clever with a Jamie Dimon or an Angelo Mozillo. Anyway, shouldn’t Apple be calling it quits now since Jobs is gone?
Weird, no Jobs, but a number of overpaid frauds: http://money.cnn.com/galleries/2007/fortune/0709/gallery.women_men_highest_pay.fortune/index.html
The proper response to a Jamie Dimon or an Angelo Mozillo isn’t higher taxes. It’s an orange jumpsuit and a 6×9.
Calling for taxes to be raised on the wealthy because of people like that is like calling for bank withdrawals to be taxed at 60% in order to deter bank robbery. The real bank robbers will still profit, while people who are just accessing the money they worked for get screwed.
We shouldn’t raise the tax rate on the über-rich because some of them are crooks who don’t earn their salaries. We should raise the tax rate on the über-rich because they pay a far lower portion of their wealth in taxes than the rest of us do. That’s not “class hatred,” it’s just fair policy. This cartoon specifically addresses a ludicrous argument against that proposed policy: the notion that productive and irreplaceable CEOs will simply quit if their taxes go up.
Well then maybe Bolling ought to have made that argument. But he didn’t, and I’m responding to the one he did make: that raising taxes on CEOs has no downsides, because CEOs are easily replaced, if not outright unnecessary.
I’m responding to the one he did make: that raising taxes on CEOs has no downsides, because CEOs are easily replaced, if not outright unnecessary.
Really? I read it as “raising taxes on highly paid CEOs has no downsides, because despite fearmongering to the contrary few if any CEOs would really quit if they happened to get a modest tax increase and any who did could probably be replaced anyway.”
Putting “modest” in there makes it tautological. If they do quit, it’s no longer modest, eh? Taxes do have marginal effects. And here’s the thing: the honest ones, the ones who are taking a risk, are the ones who will leave the market first. They’re the ones who have the most to lose. An entrepreneur might have half a dozen ventures that fail before one takes off. The wage he or she makes at that point is the culmination of years of risk-taking. The payoff for experience hard-learned. How anxious are they going to be to take that risk if you’re going to take most of it when they finally do hit it big?
Meanwhile, the guys who get it set up so they always get paid, regardless? There’s no risk for them. They can take that hit, and barely even notice it. They’re getting paid year after year, fair weather or foul. And if they have cronies in government, as well as on the board, then their taxes and the taxes from the genuine innovators come back to them in the form of bailouts and subsidies anyway.
Class war is a great cover for graft and fraud.
Putting “modest” in there makes it tautological. If they do quit, it’s no longer modest, eh?
Can you provide one example of any CEO, anywhere, ever, who quit a highly-paid position because their taxes went up?
Generally they don’t put it that way, any more than people say, “I didn’t buy product X because the sales taxes were too high,” although they will say “I didn’t buy it because it was too expensive” or “I bought it because it was Y% off” where Y is pretty close to the rate of sales taxes. If you really think CEOs don’t factor in compensation, why do you think they fight so hard for those benefits?
If the taxes on one particular CEO’s salary skyrocketed it might make financial sense for that individual to quit and seek employment elsewhere. If taxes for the top .1% of wage earners went up across the board, not so much.
What exactly is the scenario you’re imagining here? A guy who makes $50 million a year wakes up one day, learns that his taxes have increased, and quits because he’d rather make $0 a year than give another dime to the government? Or do you think Europe and Asia are just dying for a chance to lure away all our CEOs with higher pay and lower taxes?
Heh. Actually, I know a guy who did get lured away to Europe. I know it’s hard to believe, but not everyone is hopelessly in love with the USA.
If he was a highly paid CEO it’s a pretty solid bet that he didn’t quit his existing job for the money. Europe has a tendency to pay their CEOs a lot less and tax them a lot more. (And yet Europe hasn’t experienced a mass exodus of corporate talent or widespread CEO strikes! Weird, huh?)
You’re dead right about the “not everyone is hopelessly in love with the USA” part. Many people consider the neoliberal philosophy of bugger all taxes and next to no safety nets as both inequitable policy and insane considering the current debt crisis the country is wallowing in.
I’ve only spent a short amount of time in the US, but a few days of that was spent staying in a B&B near Times Square. Every morning I’d walk past hundreds of millions of dollars of corporate advertising indicating that business was more than alive and well, then I’d walk past the homeless man that had a discarded piece of wood tied to his stump via some black plastic bags so he could get around without a leg/wheel chair/prosthetic.
If raising taxes means that deficit can be reduced faster and some basic and humane safety nets can be put in place its worth losing some créme de la crop CEOs to countries that pay more and tax less, but in reality there aren’t many countries where this actually happens. The US tends to have the most highly paid CEOs in the world and some of the lowest taxes. Adjusting the scale a bit isn’t going to change that equation.
I personally am almost indifferent to the tax rate that CEO’s pay.
Raise it as high as you like with the provision that every goddamned cent go directly to deficit reduction.
I have exactly zero confidence that this would be the result. If our government were tomorrow to discover that they have access to a magic dwarf who could spin straw into gold, every single ounce of that Au would be pissed away on more vote-buying and more bureaucracy.
We all take risks in the job market. Some of us have been pushed to the margins of that market and are now facing severe consequences because we engaged in the very behavior that was supposed to Make This Country Great™. Upward mobility chase the dream yadda yadda yadda.
But everyone sheds tears for the big-time risk takers and gives them chance after chance even when they fail. The small-time failures mostly get pious lectures and maybe, if we’re lucky, some food stamps and a flyer for night classes at community college (which we must pay for ourselves, of course). That’s the difference. It’s valiant sacrifice and heroism worthy of your own reality show, book deal, or college lecture circuit if you were a rich entrepreneur who mostly played with somebody else’s money. But the rest of us merely made “bad choices,” even when we mostly played with our own money, and get only condescending lectures about our simple-minded perceptions of “Class War.”
Truly, I cry oceans for the defrocked Generals and Majors out there. Send them over here. They can share my bowl of mac ‘n cheese.
Norway kicks our ass in start ups. May have to try another angle.
Taxes shouldn’t be raised on the wealthy because those guys are crooks, they should be raised on the wealthy because it’s proven good policy.
it’s a red herring to say that raising taxes back to reasonable rates is a punishment for wrong doing. i’m for both things but for completely separate reasons.
That’s true, but that doesn’t mean that Steve Jobs was ultimately meaningless and of little consequence because of his job. It’s just a burn on a famous dead guy for its own sake.
It always amuses me, as I cool my heels waiting for disqus to s….l…..o…..w…..l…..y….. l….o….a….d, that the first thing you see under a BB article is “previous post!” and “next post!”.
Quite a humorous contrast to the “frist post!1!!” you generally see on other popular forums, don’t you know.
Veddy good, then, carry on. Well done, Reuben, I liked it!
Lucky Duck was standing on the street with a ‘Will work for food’ sign, & a lady duck in a van picked him up for the evening. He got lucky.
I’ve always thought this about Atlas Shrugged. Let them go Galt, already, and be quick about it. Easily replaced.
The pernicious thing about calling rich managers of corporations the “job creators” is that it also puts the idea that “to make a living, you must work for a large corporation” in people’s mind. It completely ignores the possibility of people creating their own jobs by becoming entrepreneurs or freelancers.
I’ve also heard a few people recently mentioning the term “unemployable” when talking about people who have been working for their own business for a few years but are considering becoming regular employees again because of the bad economy. I never heard anybody claiming people with entrepreunarial experience were unemployable before, but this new meme sprung up recently. It almost feels like there’s a concerted effort to frighten people away from creating their own job and not being under the thumb of the rich anymore.
If you pay teachers more, you’ll get better teachers, right? Isn’t that the logic? And you’ll have a better education system overall?
So why doesn’t that apply to CEOs? Do you think HoundCo would get the best of the best CEO if they reduced the salary offering?
Another of the fallacies here is that not all CEOs are the same. Would you put Steve Jobs in the same CEO boat as Lloyd Blankfein? Obviously they are vastly different thought they are (were) both billionaire CEOs. Blankfein takes taxpayer bailouts, Jobs would have none of that. If Jobs were taxed more, that means he just would have made fewer great products because, of course, he would have less capital to invest in his own work.
“So why doesn’t that apply to CEOs? Do you think HoundCo would get the best of the best CEO if they reduced the salary offering?”
Short answer- YES. you conveniently ignore two things, the law of supply and demand and the law of diminishing returns. In an open market, such as the teaching profession, supply and demand factors determine wages so that higher salaries most likely will get you a better teacher. But in the rarefied air of the CEO world, this has been negated by the practice of compensation committees populated by their peers- a closed system of corporate cronies who are only too happy to return the favor and give outrageous compensation packages in exchange for the implicit quid pro quo when it’s their turn to have their salary decided by the same committee.
the second law of diminishing returns applies here as well. give a thirsty man a glass of water and he’ll be grateful, give him two and it might make a difference, give him a barrel of water and you’re just wasting water, toss him in the middle of a lake with an empty cup and you’re doing more harm than good. Pay a CEO a million dollars and you’ll get a perfectly fine CEO, pay him ten million and you’ll get the cream of the crop, pay him one hundred million and you’ll get the same CEO only he makes more money, pay him a billion and you DON’T get the God of all CEO’s- someone we mere pawns should bow down to in awe- you simply get an over compensated CEO
OK Yahoo gibberish. A teacher’s average salary is around 40k http://www.teacherportal.com/teacher-salaries-by-state Whereas the average CEO’s salary is over 10 million dollars a year http://blog.aflcio.org/2011/04/19/2011-paywatch-average-ceo-salary-11-4-million/
Are you saying that each teacher is only worth 1/250th of a CEO?
Maybe we should start paying teachers like we pay CEOs and then see what happens.
How would we feel about Jobs if he brought Apple to the precipice of destruction and needed to be rescued by tax payers too.. I wonder?
If Jobs had done so at least he would have lost a lot of money in the process. His compensation was in Apple stock, not a fat salary with a contract stipulating he’d get gigantic bonuses for making terrible decisions. The most sickening thing about most CEO compensation in this country is how disconnected it is from actual job performance.
Right. CEO salary are high because of the competitive pressures in the marketplace to attract the best talent. My salary is low because making it higher would reduce the companies competitiveness in the global market.
You’re deliberately distorting the premise in order to reach an absurd conclusion. While increasing teacher salaries will generally offer more good candidates, nobody except you believes this is a continuous function.
If I offer a billion dollars a day for teachers, I’ll pretty much have my pick – no need to offer two billion. There is a point at which adding salary begins to have diminishing returns, and a point at which you can say that the salary increase is less than the value provided, especially in such a nebulous and subjective role as “leadership”. C-level execs have long since crossed this line and that their exorbitant salaries are the result of cronyism and/or an executive salary bubble.
Speaking of “job creators,” Adobe just moved a few hundred jobs to India. And guess what — we didn’t raise their taxes. They did it all on their own.
The cemeteries are full of people who ‘could not be replaced’
Replying to yahoo-stringofgibberish:
No, they wouldn’t have less capital. This is because:
A.) The personal income they earn is different than the income their company earns, and each is taxed differently. Thus, increased personal tax rates will have no effect on a business’ balance sheet (in theory, at least).
2.) Their company would have actually more capital if they paid their CEOs (and other execs) less.
iii.) Most CEOs (with a few exceptions) have very, very little to do with their companies’ success. The quality of the products made, and service provided, by the “regular” workers have much more influence.
But it was nice of you to try and defend the indefensible salaries of many CEOs. A failed try, but a try nonetheless …
OK, let me try another way: In general, will you get a better employee (CEO, engineer, or whatever) if you offer more compensation, or less?
to Zippy and the “law of diminishing returns” above, “excess” compensation, however you want to define that, does not sit in a rich CEO’s warehouse somewhere. It is invested, used as capital to grow the economy. Even a cash balance in a bank account is loaned out to business by the bank. So, it is hard to call that “diminishing” returns when the money is used by businesses who try to create products and services to make your life better.
to Zippy and the “law of diminishing returns” above, “excess” compensation, however you want to define that, does not sit in a rich CEO’s warehouse somewhere. It is invested, used as capital to grow the economy.
You could say the same if you paid the janitor 40 million dollars a year, but it still wouldn’t make your floors a thousand times cleaner. Of COURSE the law of diminishing returns still applies.
Speaking of fallacies…
If Jobs were taxed more, he might actually invest MORE in his own work. Because business investment is a tax shelter.
Taxes only apply to profits – not to money reinvested.
“You could say the same if you paid the janitor 40 million dollars a year, but it still wouldn’t make your floors a thousand times cleaner. Of COURSE the law of diminishing returns still applies.”
Actually, I think it WOULD make your floors 1000 times cleaner. And there ARE some facilities who need a floor that clean for making microchips, specialized laboratories, or whatever. So you would certainly adjust the compensation depending on how clean you wanted your floors.
And who’s to say what is excess compensation? You know, pro baseball players are paid a lot of money. Is that excess, or is it just what the market will bear?
It would make your floors cleaner if you paid that much to invest in new cleaning technologies, but not if you simply increased the salary of the person pushing the mop. CEO compensation works much the same way. A salary of 100 million dollars a year isn’t likely to get you someone ten times as brilliant and productive as a salary of 10 million dollars a year. If you want a more productive company, there’s almost certainly a better way to invest that extra 90 mil.
Regarding Steve Jobs, Apple didn’t lose him in the 80s because they weren’t willing to pay what he considered a reasonable salary ($1 a year, most of his wealth came from Apple stock). They ousted him because the board of directors didn’t like they way he was running the company.
Sports players generally are expected to give consistently good results or they don’t get their contracts renewed, unlike oligarchs who get bonuses after their companies need tax payer funded bailouts to keep afloat. The players are actually ‘the product’ as well… still they get peanuts compared to the amount of revenue they bring in for those that profit off them.
The thing is, your theory that better-paid CEOs are better CEOs is very easy to test, because we have a history of CEOs being paid various amounts that we can look at. Can you find some statistics to verify your claims? CEOs are getting more compensation now than ever before; how’re they doing, compared to their predecessors? Fifty years ago, the CEO of GM was paid, relatively speaking, vastly less than contemporary CEOs. Were there massive flaws in the running of the auto industry that we can point to, that could only be fixed by paying CEOs more money so they’d do a better job with the decision-making?
“Maybe we should start paying teachers like we pay CEOs and then see what happens.”
I’m all for it! Open your own school, pay teachers like CEOs, and let’s see if kids come out better educated, happier, more well-adjusted, etc…
To me it seems like there’s two separate economies in america: the world of the big investor, and the world of people formerly known as the middle class. Income inequality keeps rising and the percentage of wealth owned by the richest keeps going up. The facts on the ground are that the middle class is getting locked out of: health care, education, even decent public infrastructure – all things necessary to further the lives of real people. CEO pay is one facet of this issue, and it’s an easy one because the numbers are so mind boggling large.
“Sports players generally are expected to give consistently good results or they don’t get their contracts renewed, unlike oligarchs who get bonuses after their companies need tax payer funded bailouts to keep afloat. ”
I agree and I think we need to differentiate between CEOs that are slime and depend on taxpayer bailouts versus those who provide products and services that make our lives better and don’t go begging to mommy government when they hit a rough spot.
Not all CEOs are the same.
I hope we can all agree on that.
It seems like a lot of the analysis of this assumes that take home pay is the end-all be-all. I know many, many folks who could be making subsantially more than they currently do, but put a higher emphasis on creativity, work autonomy, job satisfaction, balance of work & family life and a host of other factors.
Several studies have shown that individual happiness is maximized when someone makes enough to live comfortably and not have to worry about the future (generally health and retirement costs). That’s one reason why countries with socialized medicine generally rate highest on the happiness scale. Too much more or less and worry and unhappiness sets in.
I’ve never understood why people are so eager to white-knight for billionaires. They’re the people who least need your help and you’re gonna spend the next three hours writing little mini-essays in their defence?
Did you miss the part where I was just talking about putting some of those billionaires in prison? If anything, I think people who merely want to tax them are too soft on them. If not outright aiding and abetting. If you can’t look past the money to the methods, then the point still needs to be made.
I admit that I hit “like” on ernunnos’ treatise above. I just kept imagining it punctuated with rimshots and it worked great.
Most of the onerous burden of taxation and regulation is borne by small businesses — they do not have the wherewithal to resort to the extra-legal means of tax-avoidance enjoyed by large corporations, nor can they afford lobbyists. Corporations have stolen the rhetoric of small business people and assumed it as their own.
Significantly, small business is the very home of Job Creation — whereas large multi-nationals hire rather small portions of the overall employed population. If you look in your own region to see who has the largest payrolls, you’ll see corporations. You’ll also see that they provide employment to 10% of the working population at the most. The little cafe on the corner is run by a Job Creator. Megabeast Of No Nation, Inc., is at best, a Job and Wealth Consumer and Destroyer.
This comic isn’t particularly funny or witty. This kind of argument is best presented in an opinion article, it can be put forward much more completely. TtDB is better when it’s using a particular witty metaphor or clever sarcastic scenario; with the Hollingsworth Hound stuff it’s RB’s politics thinly veiled as a comic.
…it’s RB’s politics thinly veiled as a comic.
A political cartoon that’s the author’s politics thinly veiled as a comic. How did that creep up on us?
A political cartoon that’s political? AAAAAAAIIIIEEEEEEEEEEEEEEEEEEEEE
For God’s sake, the so-called ‘debate’ you are having about taxes in the US isn’t about huge onerous tax burdens that will cripple corporate productivity, it’s about removing tax cuts that were always considered temporary, and called such when the Bush government pushed them through. You would still have lower tax rates than when Reagan was in power. I mean, it’s hard to take this discussion seriously, you are fucking insane over there.
Edit: I mean that in the nicest possible way.
People, please! If we won’t defend the slim percentage of the population that has benefited from Supply-Side Economics, who will?
This is why there is no John Galt and never can be; there will always be someone else to come along that will take his place.
There’s a certain amount of incentive created by higher pay, mainly through ensuring a worker can be more comfortable and cover their needs.
That said, pay is not the main reason people strive to succeed in projects and goals they pursue – it is the personal satisfaction in living out one’s values and aspirations, the need for creativity and curiosity, and the simple need to be human.
Marx was right about this, as he was about most things. Capitalism is a perversion of human nature, and it will continually lead to cyclic destruction. There is no class envy as was snidely commented above, there is simply class survival. The rich must go for the survival of all, and centuries from now there will be no tears for these whiny vampires.
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