Wealth Redistribution or Wealth Return?

[TV and credit cards]

Entrepreneurs have proven that they can make things without a CEO

Oh for the love of god! An entrepreneur is a CEO. You think you can prove the function is unnecessary by renaming it?

An entrepreneur is a CEO but a CEO is not necessarily an entrepreneur and that's the big difference. Elon Musk shows us on a daily basis that Rhea is correct and you are wrong because yes he could easily not be a CEO for either Tesla or SpaceX yet those companies would probably not even know the difference. If CEO's were really worth the big massive salary, how does Musk manage to be CEO of 3 or 4 companies at the same time while naming himself chief engineer of SpaceX as well? Either CEO's really don't do as much as advertised or Musk is able to somehow squeeze 50 hours into a 24 hr day managing all those companies.

The headquarters of those companies are in Hawthorne CA, Austin TX, and San Francisco CA. Something tells me not all of his companies see him regularly.

It's amazing what can get done without the CEO being there.

Where I worked, the bigwigs parking lot was always empty by noon on Friday.

That is true. Never met the man myself, but at least judging from the hearsay of everyone I know who has, Mr Musk comes across an absolute nightmare of an admin.

Leadership is enabling the company to run without you. A CEO's job is to know what is going on and to drive the company in the direction it needs to go. To be the Nvidias of the world and not the International Business Machines. A CEO is there to make the big decisions that push the company in the direction needed to succeed in the future. If any chief officer or department head or nearly anyone in a supervisory position needs to be "there" all the time then they are not doing their job correctly. Their job is to give their employees the tools they need, to remove any impediments, to foster a sense of responsibility, and then to leave that person alone to do the job. If I seen one of my supervisors constantly hovering around their subordinates, that is the supervisor I'd be watching and worrying about. A good leader, a real good leader not only empowers their employees to succeed, they create an atmosphere that encourages them to excel, to make them want to come to work in the morning.

I don't know about Musk but one thing is for sure, in the minds of some, as sure as he is not responsible for the success of Tesla or SpaceX, he damn sure will be responsible for the failure of Twitter.

 

[RVonse]

Entrepreneurs have proven that they can make things without a CEO

Oh for the love of god! An entrepreneur is a CEO. You think you can prove the function is unnecessary by renaming it?

An entrepreneur is a CEO but a CEO is not necessarily an entrepreneur and that's the big difference. Elon Musk shows us on a daily basis that Rhea is correct and you are wrong because yes he could easily not be a CEO for either Tesla or SpaceX yet those companies would probably not even know the difference. If CEO's were really worth the big massive salary, how does Musk manage to be CEO of 3 or 4 companies at the same time while naming himself chief engineer of SpaceX as well? Either CEO's really don't do as much as advertised or Musk is able to somehow squeeze 50 hours into a 24 hr day managing all those companies.

The headquarters of those companies are in Hawthorne CA, Austin TX, and San Francisco CA. Something tells me not all of his companies see him regularly.

It's amazing what can get done without the CEO being there.

Where I worked, the bigwigs parking lot was always empty by noon on Friday.

That is true. Never met the man myself, but at least judging from the hearsay of everyone I know who has, Mr Musk comes across an absolute nightmare of an admin.

Leadership is enabling the company to run without you. A CEO's job is to know what is going on and to drive the company in the direction it needs to go. To be the Nvidias of the world and not the International Business Machines. A CEO is there to make the big decisions that push the company in the direction needed to succeed in the future. If any chief officer or department head or nearly anyone in a supervisory position needs to be "there" all the time then they are not doing their job correctly. Their job is to give their employees the tools they need, to remove any impediments, to foster a sense of responsibility, and then to leave that person alone to do the job. If I seen one of my supervisors constantly hovering around their subordinates, that is the supervisor I'd be watching and worrying about. A good leader, a real good leader not only empowers their employees to succeed, they create an atmosphere that encourages them to excel, to make them want to come to work in the morning.

I don't know about Musk but one thing is for sure, in the minds of some, as sure as he is not responsible for the success of Tesla or SpaceX, he damn sure will be responsible for the failure of Twitter.

The shareholders could give a shit whether the CEO hovers over their employees what matters to them is how much money is getting made.

Which begs the question why so many CEO's have such poor sales and revenue performance, some even bankrupting their company.....yet making millions running their business in the ditch.

CEO salaries are a big scam.

 

[Elixir]

As you get fewer, bigger companies you would expect the overall ratio to change.

Why? I would absolutely NOT expect that. I’d expect turnover to become a problem that grows with the number of employees, and exposure to damage from it to grow as well, which I would expect to result in increasing lowest level pay to help with retention. I see no reason that ANYONE should be salaried at hundreds or thousands of times the rate paid to entry level, yet competition for what is apparently a vanishingly small number of people qualified to run large corporations, has run their pay up to that point.

I see nothing that addresses my point. It's not a US-only pattern at all.

You have a point? All I see there is a hollow assertion there exists some overpowering universal mechanism that makes the ratio of top to bottom worker pay more and more discrepant as a Company grows. That’s bullshit.

 

[Loren Pechtel]

I don't entirely agree about family not being able to inherit family property above $12M. For one thing, there may be many heirs to divide an estate. For another, I've seen some well placed property balloon in price in recent years. Supposing one such property were a family home well situated on a lake or in an expensive city--a family could lose their ability to retain something that is of important sentimental value to them--to a real estate speculator who could care less that is where 3 generations of couples said their wedding vows, for example.

1) Effectively prohibiting passing it on is not good for society as it gets it to a fair degree spent.

2) I favor a very different approach here. Lower the estate tax exemption but make a special category for non-investment things which can't be divided or are substantially harmed by being divided, the tax is assessed in the form of a lien. The lien is not triggered by transfer of a share of the asset to another person who also has a share with the same lien. The lien is a percentage, not a fixed dollar amount. Should property acquire multiple liens only the highest one remains.

The family house remains in the family, the tax is only assessed if it is sold to others. The 20 apartments are an investment, if they have to be sold to pay the tax, so be it. The controlling voting shares in a company don't have to be sold. The family business stays in the family.

I believe this covers all the cases where inheritance tax causes unreasonable harm.

 

[Loren Pechtel]

Let me add one more thing. Some of you seem to think that CEOs and/or corporations shouldn't have to pay much taxes. Well, who depends on the infrastructure as much as large corporations? Where would Amazon be if not for roads, air travel and the Internet, for an example? Should only the little guy be responsible for paying for those things? I have a friend who barely made 40 K last year, yet she paid over 4 K in taxes. That's more than Trump and many billionaires pay in taxes due to all their special tax breaks. Even if they do pay more, the percentage is often lower than what my friend pays. Many of them have a lot of influence in government. Yes. We have just about become a corpocracy.

There's actually a good reason for not taxing corporations.

1) Taxing corporations is regressive. The tax actually falls on the customers of the corporation.

2) It causes a huge amount of effort to be expended in arranging things to minimize the tax. Individuals are much less able to squirm away from taxes.

 

[Loren Pechtel]

It's amazing what can get done without the CEO being there.

Where I worked, the bigwigs parking lot was always empty by noon on Friday.

Which proves nothing. Leadership is the hand on the rudder, not the engine room. Their job is to steer, not to push.

 

[laughing dog]

Let me add one more thing. Some of you seem to think that CEOs and/or corporations shouldn't have to pay much taxes. Well, who depends on the infrastructure as much as large corporations? Where would Amazon be if not for roads, air travel and the Internet, for an example? Should only the little guy be responsible for paying for those things? I have a friend who barely made 40 K last year, yet she paid over 4 K in taxes. That's more than Trump and many billionaires pay in taxes due to all their special tax breaks. Even if they do pay more, the percentage is often lower than what my friend pays. Many of them have a lot of influence in government. Yes. We have just about become a corpocracy.

There's actually a good reason for not taxing corporations.

1) Taxing corporations is regressive. The tax actually falls on the customers of the corporation.

Do you have any evidence to support your claims? I ask because there is a substantial literature on the incidence of the corporate income tax, most of which concentrates on the effects on shareholders and workers, not customers.


Rethinking the Corporate Income Tax is a recent example.

 

[Toni]

Let me add one more thing. Some of you seem to think that CEOs and/or corporations shouldn't have to pay much taxes. Well, who depends on the infrastructure as much as large corporations? Where would Amazon be if not for roads, air travel and the Internet, for an example? Should only the little guy be responsible for paying for those things? I have a friend who barely made 40 K last year, yet she paid over 4 K in taxes. That's more than Trump and many billionaires pay in taxes due to all their special tax breaks. Even if they do pay more, the percentage is often lower than what my friend pays. Many of them have a lot of influence in government. Yes. We have just about become a corpocracy.

There's actually a good reason for not taxing corporations.

1) Taxing corporations is regressive. The tax actually falls on the customers of the corporation.

2) It causes a huge amount of effort to be expended in arranging things to minimize the tax. Individuals are much less able to squirm away from taxes.

Hahahahaha!

Oh. You’re not joking. Your argument against taxing corporations is…. that they will go to a lot of trouble ( and of course, expense) to….avoid paying taxes. Poor corporation!

Taxing corporations is not regressive. Corporations with higher profits pay higher taxes, just as individuals who earn more pay higher taxes. Individuals also seek to minimize their tax burden while enjoying the income they gave.

Yes, corporations do factor the costs of running their businesses Into the price they charge for goods and services. Taxes are one such cost. So is labor. So are materials, utilities, rent/property taxes/mortgages, insurance, etc. So, of course is the cost of the lobbyists they hire to reduce their tax burdens, the cost of their tax attorneys and accountants, the costs of their association memberships and club memberships and the costs associated with entertaining clients and other people to benefit their business. Many of these expenses are written off against their tax bill.

What do corporations get for their taxes? Roads, utilities, police and fire department protection, an educated work force, and much, much more.

 

[Gospel]

Blah, this all just sounds to me like the government should try tackling inflation via their stupid taxes rather than the FED using their stupid interest rates. Both effects high income workers so what's the different other than the FED (which was created and constitutionally bound by the government) just making money go poof while the government can us it to shut up about that deficit in our land of make believe economy.

Edit: Sorry, meant to add what this has to do with redistributing wealth. Tax is often used to raise revenue to fund government programs and to redistribute income from the wealthy to the less fortunate.

 

[southernhybrid]

The idea that the cost of taxes is passed on to the customer is silly. I did a quick read from several sources and oddly enough /s, it was only the conservative sources that made this claim. The person who made the most sense said that if the company raises the price so it can cover the cost of taxes, that will increase profits, which will increase taxes since taxes are based on profits. So, then to cover the cost of the tax increase, they will have to increase the price of the item or service to cover the cost of the taxes. Round and round it goes and where it stops nobody knows.

Conservatives pretend that taxing corporations will raise prices because, assuming we're talking about politicians or the ultra wealthy, they are often owned by corporations or they own corporations.

I also wondered how much a company could raise the cost of a product and still maintain the same number of buyers. Most people will stop buying something if they think the cost of the item isn't worth the price. The argument that taxing corporations raises the cost of products is bullshit. If anything, it might hurt the workers, who might be given smaller salaries or fewer benefits, assuming the corporation is greedy, as most appear to be these days.

I remember when I lived in SC, there was a Michelin plant in the area. I have no idea if this is still true but Michelin was known to treat their employees well. They paid well and gave excellent benefits. Turnover was just about non existent at that plant. They never had trouble finding excellent employees for any position. That's how it should be, but greed has become a sick addiction among the wealthy these days, that companies like that are rare.

 

[Loren Pechtel]

There's actually a good reason for not taxing corporations.

1) Taxing corporations is regressive. The tax actually falls on the customers of the corporation.

Do you have any evidence to support your claims? I ask because there is a substantial literature on the incidence of the corporate income tax, most of which concentrates on the effects on shareholders and workers, not customers.


Rethinking the Corporate Income Tax is a recent example.

Which doesn't address my point at all. They're talking about worker vs management, completely ignoring the fact that it's the customer that actually pays the tax.

 

[Loren Pechtel]

Yes, corporations do factor the costs of running their businesses Into the price they charge for goods and services. Taxes are one such cost. So is labor. So are materials, utilities, rent/property taxes/mortgages, insurance, etc. So, of course is the cost of the lobbyists they hire to reduce their tax burdens, the cost of their tax attorneys and accountants, the costs of their association memberships and club memberships and the costs associated with entertaining clients and other people to benefit their business. Many of these expenses are written off against their tax bill.

What do corporations get for their taxes? Roads, utilities, police and fire department protection, an educated work force, and much, much more.

Any cost that all companies incur is passed on to the customer. What corporations get for their taxes is irrelevant to the issue.

 

[Loren Pechtel]

The idea that the cost of taxes is passed on to the customer is silly. I did a quick read from several sources and oddly enough /s, it was only the conservative sources that made this claim. The person who made the most sense said that if the company raises the price so it can cover the cost of taxes, that will increase profits, which will increase taxes since taxes are based on profits. So, then to cover the cost of the tax increase, they will have to increase the price of the item or service to cover the cost of the taxes. Round and round it goes and where it stops nobody knows.

Conservatives pretend that taxing corporations will raise prices because, assuming we're talking about politicians or the ultra wealthy, they are often owned by corporations or they own corporations.

I also wondered how much a company could raise the cost of a product and still maintain the same number of buyers. Most people will stop buying something if they think the cost of the item isn't worth the price. The argument that taxing corporations raises the cost of products is bullshit. If anything, it might hurt the workers, who might be given smaller salaries or fewer benefits, assuming the corporation is greedy, as most appear to be these days.

I remember when I lived in SC, there was a Michelin plant in the area. I have no idea if this is still true but Michelin was known to treat their employees well. They paid well and gave excellent benefits. Turnover was just about non existent at that plant. They never had trouble finding excellent employees for any position. That's how it should be, but greed has become a sick addiction among the wealthy these days, that companies like that are rare.

Of course the left doesn't discuss the problem.

No matter what people want to happen the reality is that any commodity market will end up stabilizing at a reasonable profit margin. If the profit to be had in a market is appreciably above this point new competitors will enter until the profit margin is pushed down to the natural level. Likewise, if the profit is pushed too low when companies fail no replacement will enter and the decreased supply will bring profit back up.

This profit margin is after taxes.

 

[laughing dog]

There's actually a good reason for not taxing corporations.

1) Taxing corporations is regressive. The tax actually falls on the customers of the corporation.

Do you have any evidence to support your claims? I ask because there is a substantial literature on the incidence of the corporate income tax, most of which concentrates on the effects on shareholders and workers, not customers.


Rethinking the Corporate Income Tax is a recent example.

Which doesn't address my point at all. They're talking about worker vs management, completely ignoring the fact that it's the customer that actually pays the tax.

Of course it addresses your hand waved point - if labor and capital pay the tax, the customer doesn’t. My larger point is there is little evidence to support the idea that the customer pays the tax. Point to a recent study that supports your view.

 

[laughing dog]

Yes, corporations do factor the costs of running their businesses Into the price they charge for goods and services. Taxes are one such cost. So is labor. So are materials, utilities, rent/property taxes/mortgages, insurance, etc. So, of course is the cost of the lobbyists they hire to reduce their tax burdens, the cost of their tax attorneys and accountants, the costs of their association memberships and club memberships and the costs associated with entertaining clients and other people to benefit their business. Many of these expenses are written off against their tax bill.

What do corporations get for their taxes? Roads, utilities, police and fire department protection, an educated work force, and much, much more.

Any cost that all companies incur is passed on to the customer.

Not all companies are corporations. How does that alter your argument?

What corporations get for their taxes is irrelevant to the issue.

That is nonsense. For example, if taxes provide infrastructure that reduces transportation costs, business costs fall. If taxes provide more productive workers, business costs fall.

BTW, not all companies are corporations, so wou

 

[Bomb#20]

Well, that at least is true. It isn't luck. It isn't anything. Worker wages have kept up with inflation.

LOL - if you look at your link, it is clear that median wages did not keep up with inflation during most of the time period between 1979 and 2021. I count about 10 years where the real wage was at least the minimum wage of 1979.

Is this one of those "Ten equals seventeen for sufficiently large values of ten" situations?

Ten out of 42 is roughly 25% of the time, suggesting that it is luck that in any give year wages do keep up with inflation.

And in any given month the price of gas is usually less than in the previous month. From this we can deduce that gas prices are tending toward zero.[/sarcasm] If you merely count the number of years a price goes up less or more than inflation, and ignore how much less or more it goes up, then you'll get an unrealistic idea of the long term trend.

And, of course, that obscures the fact in the view of many people, real wages should rise at least at the rate of productivity increase.

Yes, if by "that", you are referring to Rhea's refuted claim. Drawing attention to the fact that two different comparisons are going on isn't the source of obscuration.

As to the "real wages should rise at least at the rate of productivity increase" view, what do you mean by "productivity" and how would you go about measuring it?

 

[DrZoidberg]

I’m reading an article that mentions “Wealth Redistribition” as an outcome of progressive policies and it got me wondering; Is it a redistribution of wealth from its “rightful” owners, or is it really a return of the wealth TO the “rightful” owners?


When one thinks about, for example, CEOs who have massive incomes and hence wealth, one is obliged, IMHO to include the people who actuially made the thing. Without the thing, there are no sales. Without the person who turned one material into another, there is no thing.

No CEO could make all the semi-conductors. They need the people who make the designs, the people whob assemble the precision equimpent, the people who machine the precision equipment, the people who mine the materials that are machined.

Entrepreneurs have proven that they can make things without a CEO and make at least as much as they would make in a large company. But no CEO has ever proved that they could make as much without the workers - in other words, they have never proved that without skimming off the labor of others, they could not possibly be worth millions.


So social programs like progressive taxation are a return of money earned by labor back into the pockets of labor - where it was earned.

I have a lot of friends who are top level CEO's as well as investors, ie the people who hire CEO's. I have some insights.

The reason CEO's make so much money is because it's a difficult job. Having a clarity of vision, being able to communicate that as well as being dependable is hard work. Top level CEO's have flawless track records.

Poor people tend to struggle with understanding what it takes to get rich. It's not that CEO's work harder than poor people. They just avoid wasting energy on bullshit. That's the secret. Identifying what is bullshit and what isn't, is very hard.

I have a very close friend who has been one of the most successful CEO's of Scandinavia for years. He got fired (politically outmaneuvered) a couple of years ago. It's interesting to follow his search for a new job. Basically, he isn't doing anything. Like a princess he gives audiences to a steady stream of headhunters. He keeps saying no. While he's waiting for an offer that's worth his time he does consultancy work, ie being a mentor to other CEO's and while his hours are short he's making hourly better than when he was a CEO of a major Swedish corporation. He has zero pressure to find a new job. He's doing great.

CEO's are paid what they are because they're worth it. They have a rare and valuable skillset and the market forces are acknowledging this. When I say that they're worth it. I mean that in the market value sense. Not that they are more worth than humans. Just that their skills are paid an accurate wage according to their market value.

Fun story though, my friend is broke. When it comes to money, he's an idiot. He has no idea how to handle his own economy. He's awesome with handling a major corporation. But when it comes to his own finances he just can't make it work. I find this ironic and funny. No matter how much money this guy makes, he will blow it. Every month. Until it's gone. Like a teenager. He hasn't been working as a CEO for the money. He does it because he loves the job. He doesn't seem to care about money at all. He's just not that kind of guy. He doesn't care about the wealth of others. He just loves being a part of big things. He's a very close friend.

 

[southernhybrid]

https://www.business.org/finance/ac...than what an average employee earns ($51,394).

So, Dr. Z, where did your friend fit on the scale below of some of American's largest corporations? And, do the rest of you honestly feel that the CEOs on the list deserve these insane salaries. The only one who I would call worthy of his salary is Warren Buffet. Despite being ultra wealthy, Buffet has never appears to be very greedy. He's even admitted that he's wealthy because he's always had a special talent for choosing investments. His CEO salary of 380 K per year seems reasonable. The rest on the list are insane, imo.

Nobody is worth a salary of 54 million per year or for that matter, 7 or 8 million a year. I don't know how difficult their jobs might be, but a lot of jobs are very difficult. Look at. how low the average salary of their workers tends to be. Amazon's CEO gets almost 36 million per year, but the average employee salary is not quite 29K per year. It's crazy.

It takes a lot of education and skill to be a top neurosurgeon, but I doubt even the best of them make anything near what most of these CEOs make. It's not easy to be a roofer or an electrician and they are in short supply these days. I also read today that airline mechanics are in extremely short supply, as they are retiring in large numbers. My point is that there are lots of hard jobs that require special skills that are paid very low salaries. Some CEOs may be worth very large salaries, but imo, nobody is worth what those on the list are paid, with the exception of Buffet, who has always lived a "modest" lifestyle compared to his peers.

Company	CEO Name	CEO Salary	Average Employee Salary	Hours worked per week to earn CEO salary	Hours of work to equal 1 minute of CEO pay
Nike	John J. Donahoe II	$54,451,903	$30,877	70,540	29.4
Microsoft	Satya Nadella	$44,321,788	$84,000	21,106	8.8
Netflix	Reed Hastings	$43,226,024	$88,518	19,533	8.1
Amazon	Andy Jassy	$35,848,449	$28,875	49,660	20.7
JPMorgan Chase	James Dimon	$31,671,589	$37,333	33,934	14.1
Johnson & Johnson	Alex Gorsky	$29,590,472	$82,000	14,434	6
BlackRock	Laurence D. Fink	$27,356,432	$73,000	14,990	6.2
American Express	S. J. Squeri	$24,221,319	$67,262	14,404	6
Goldman Sachs Group	David M. Solomon	$23,940,657	$61,933	15,462	6.4
Procter & Gamble	David S. Taylor	$22,905,128	$72,186	12,692	5.3
Walmart	C. Douglas McMillon	$22,105,350	$24,960	35,425	14.8
3M	Michael F. Roman	$20,700,347	$72,909	11,357	4.7
Target	Brian C. Cornell	$19,755,188	$24,960	31,659	13.2
Coca-Cola	James Quincey	$18,383,474	$37,988	19,357	8.1
Delta Air Lines	Edward H. Bastian	$17,325,379	$51,982	13,332	5.6
Apple	Tim Cook	$14,769,259	$47,397	12,464	5.2
Starbucks	Kevin Johnson	$14,665,575	$22,880	25,639	10.7
Home Depot	Craig A. Menear	$13,995,092	$24,960	22,428	9.3
Walt Disney	Robert Chapek	$11,458,224	$79,000	5,802	2.4
FedEx	Frederick W. Smith	$11,138,548	$43,680	10,200	4.3
Marriott International	James F. Risoleo	$9,434,465	$27,040	13,956	5.8
Southwest Airlines	Gary C. Kelly	$9,235,103	$43,000	8,591	3.6
Costco Wholesale	W. Craig Jelinek	$8,016,200	$31,200	10,277	4.3
Alphabet	Sundar Pichai	$7,425,547	$82,000	3,622	1.5
Berkshire Hathaway	Warren Buffet	$380,328	$44,914	339	0.1

 

[Rhea]

The reason CEO's make so much money is because it's a difficult job.

It is not a difficult job. It is a specialized job, like a thousand other specialized jobs. It is a grueling job, like a thousand other grueling jobs. It is only “difficult” to the extent that it is like a thousand other “difficult” jobs.

Having a clarity of vision, being able to communicate that as well as being dependable is hard work. Top level CEO's have flawless track records.

LOL, wait - what?
Until they don’t. And then they still get their negotiated parachute? Or they allow themselves to get “politically outmaneuvered”? That’s not a flawless record is it?

And even the ones considered “top level” do not have flawless records. They make mistakes, have made mistakes, and they keep moving on.

Poor people tend to struggle with understanding what it takes to get rich.

I am not poor.

It's not that CEO's work harder than poor people. They just avoid wasting energy on bullshit.

Like a thousand other jobs.

That's the secret.

The secret is that there is a closely held club that self supports. To fail to acknowledge that leaves a lot of reality out in the dark.

Identifying what is bullshit and what isn't, is very hard.

So cops are worth tens of millions a year each, yah?

 

[Toni]

Yes, corporations do factor the costs of running their businesses Into the price they charge for goods and services. Taxes are one such cost. So is labor. So are materials, utilities, rent/property taxes/mortgages, insurance, etc. So, of course is the cost of the lobbyists they hire to reduce their tax burdens, the cost of their tax attorneys and accountants, the costs of their association memberships and club memberships and the costs associated with entertaining clients and other people to benefit their business. Many of these expenses are written off against their tax bill.

What do corporations get for their taxes? Roads, utilities, police and fire department protection, an educated work force, and much, much more.

Any cost that all companies incur is passed on to the customer. What corporations get for their taxes is irrelevant to the issue.

By the same reasoning, all labor and materials are paid by the customer. So what? Should labor and and materials be free? Should CEOs receive any pay at all? After all, why should Walmarts customers pay for their CEO?0