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20. Re: Evening Mobilization Feb 22, 2012, 10:47 Beamer
wtf_man wrote on Feb 22, 2012, 10:18:
Beamer wrote on Feb 22, 2012, 09:50:
But yeah, the amount of changes we've seen to how our CEOs operate ever since the top tax bracket dropped from >70% to <40% is insane.

I'm sorry, but NOBODY should be in a 70% tax bracket. That's fuckin' insane.

At the same time... these asshats that are in the 35%-40% brackets shouldn't be able to CHEAT their way down to 15%, either.

You understand marginal tax rates, right?

If you do I'm sorry, but to assume that no one should be in it I'd guess you don't. It means that income after a certain amount is taxed a certain percentage.

So let's use the 1962 tax brackets, adjusted for inflation:
The first $30k is taxed 20%
The next $30k is taxed 22%
The next $30k is taxed 26%
The next $30k is taxed 30%
This goes up until $2.2 million, which is taxed 90%, and 2.9 million, which was taxed 91%.

This doesn't mean that a guy earning 3 million paid 91% in taxes, it just means he paid 91% on every dollar over $2.9 million. He made 9 cents for every buck above that.

Essentially it was a salary cap set by the government. What incentive would a company have to pay their CEO above $2.9 million? Any money to him just goes to the government. Every dollar paid to him was worth only 9 cents to him, which was nothing considering how much he already earned (and kept.)

So salaries were capped. Where did that money go, then? It would be reinvested into growth. It would be spent on other employees. There was no strong desire to cut jobs because those savings weren't as important. These days those savings are considered very important because enormous chunks of them go to very few individuals (just look at what happened to Black & Decker.)
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