The Spectacle Blog

Re: Populist Quin, etc.

By on 3.27.08 | 4:17PM

James and J.P.,
I am surprised I haven't gotten MORE blowback on the executive compensation part of my otherwise pure free-market package. I wrote it with the full intention of causing a few vapors. Time and space do not permit a full debate on this right now (I actually think this is a subject the right SHOULD debate, in public -- and it was the one issue on which I was careful NOT to over-criticize Mike Huckabee), but I do think a few points must be emphasized. First of all, I do NOT think that corporate boards are adequate representatives of shareholders or of workers; and I think that, both morally and politically, huge executive compensation packages are despicable. I wish that social ostracism were a more effective tool to punish outrageous and socially harmful pursuits of Mammon.

But I do hesitate to have government try to decide what does and doesn't amount to "excessive" compensation or wealth. And I do not think it is government's job to punish ANYbody for accepting compensation that he can convince the market to bear for his services.

But I DO think the government has a right to nudge corporations -- which, after all, are NOT individuals, but purely legal constructs -- to consider, just consider, the implications of its compensation schemes, ESPECIALLY when the government is NOT otherwise taxing the corporation's net income by a single penny. You will note that I ask for only the COMPANY'S share of the FICA tax to go into the fictional "transition cost" part of the fictional Social Security pot. And you will note that it only is being asked for that exceedingly small extra donation to Social Security in return for a complete elimination of corporate income taxes. It's not an added tax; in effect, it is an incredibly small diminution of what would remain a massive tax cut.

The political calculations are multiple here. First, the executive compensation proviso would add a bit of a populist tinge to the plan to eliminate corporate income taxes. It's a small price to pay for adding a populist political incentive to support the corporate income tax elimination. Second, it goes a long way toward helping get rid of the crazy "transition cost" argument against personal accounts in Social Security. Okay, Lefty, you want to cover the transition costs? I'll COVER the damn transition costs! NOW can we let people save and invest some of their own bleeping retirement money?!? Third, it appeals to most people's notions of fairness. One big argument against eliminating corporate income taxes is that corporate boards will merely dump all the newly kept profits into the hands of the already-filthy-rich execs. This proviso tells voters that we are doing something "good" with at least some of that money -- that taxpayers, too, will get a windfall.
We do, after all, live in a political world, which sometimes means playing to the crowd (as long as we are not compromising fundamental principle, which I am not).

James' "slippery slope" argument is not at all unreasonable, however. Still, it would be a debate I would welcome. Every time the Left tries to argue that professional households ought to pay more into Social Security without any concomitant benefit increases, and then starts citing numbers, we win. So many families in the high-cost-of-living coastal zones make up to $200,000 or so without living extravagantly that we conservatives win every time government talks about confiscating more of their money. I would be perfectly happy to let the Democrats try to argue the "details" of their tax hikes on families that do not think of themselves as "rich." Bring it on!

There is a lot more to say on the overall topic, but just let me reiterate for now that I am, as always, trying to think like a practical pol -- which, in one sense, is what I did for a living for a long time. As long as what I am proposing is clearly a tax cut overall, not a hike, then I see no problem with tweaking the cut a little bit to achieve other political ends. All y'all's arguments to the contrary are perfectly legitimate, but I think they amount to niggling over 2% contradictions of philosophical purity rather than embracing the vast benefits, both philosophically and practical, that the 2% is designed to help achieve.

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