|Reich not accurate in executives column|
In Robert Reich’s recent column, he complains that U.S. taxpayers subsidize the compensation of highly-paid corporate executives because their compensation is, per current tax law, deductible from corporate earnings.
The fact is that their compensation is deductible as an operating expense, not from earnings. Earnings are what’s at the bottom line after all revenues and legitimate expenses are calculated.Another fact he fails to mention is that the compensation and benefits of all American workers are a legitimate deduction from operating expenses for any company, big or small. Should he not complain that the compensation and benefits of all employees are subsidized by American taxpayers?
Reich’s salary and benefits as Secretary of Labor, a government job, was fully subsidized by American taxpayers. As Professor of Public Policy for the University of California at Berkeley, a nonprofit organization, his compensation and benefits are subsidized by California taxpayers and the federal government through grants to Berkeley, which means American taxpayers — that’s you.
His complaint really seems to be the amount of compensation executives receive, mentioning that executive compensation is out of control and that in big companies “the typical CEO raked in $15.1 million.”
I say, so what? Those numbers are driven by the market. If you want to change the market, bring in wage and price controls. We could then put a cap on everyone’s earnings, including Reich’s salary at Berkeley and the mechanics who fix our cars and the people who make cheese in Wisconsin, along with everyone who reads these words.
I’m all for it as long as I’m the one who sets those caps.
|Tuesday, August 13, 2013 5:13 PM|