Maximum Wage

What are the major problems with a maximum wage? Specifically a relative earnings limit, but I'd appreciate broader answers all the same. I like the idea but I'm sure I'm missing some angles.

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Maximum wage sounds bad. 100% tax bracket is better. As communist as it is I do think that a single person making millions of dollars a year is fucking stupid and should be stopped. Implement a tax bracket so fucking high only the top .1% of people hit it, and make it 100%.

Kills incentive for an ambitious genius. That's about it since most of the top 1% barely work at all. I think you are also missing that a lot of top earners make money on investments and don't get a standard pay check like you and I.

A 100% tax bracket is still a maximum wage though. I can't imagine anyone is stupid enough to let the name fool them, but I've been wrong before

A relative earnings limit can be based on the lowest earner at a company or the number of employees or both. So you can still do very well for yourself, but you can't leave everyone else behind. No reason to stop trying unlike an absolute maximum.

Both of these policies will have the same incentive impact.

> Amazon Go
> Uber self driving
> McDonald's Kiosk

Somethings to help you out there burger.

Automation is going to happen anyway. You still have to have someone maintain the equipment so at that point you have to weigh the cost of an outside company doing it vs managing it in house. Not to mention you have to have humans around for the tasks robots can't complete just yet.

> fear of losing money = innovation
> gaining money = innovation
> money out of thin air = pic related

A 100% tax bracket is different to a maximum wage because a maximum wage would only affect wage-earning employees.

With a maximum wage, everyone who earned maximum wage would be forced to start their own business to get around the price control.

Either they'd start their own completely different business, or they'd just work as a contractor.

Either way, this is a useless regulation that forces people to have to pay more just to work higher skilled jobs.

In what way is it money out of thin air? It's redistribution of wealth or some kind of forced reinvestment.

No matter what you did, you could only make $1500 a month for the rest of your life.

Explain to me how you'd feel.

That leads to depression, higher crime and poverty.

Do you know why most Americans, until at least 2014, got their healthcare insurance through their employer? Because the US government instituted wage control during WW2. They also instituted price controls on products.

So, how do businesses respond? Well, businesses like butchers just created new cuts of meat, which being new didn't have a price set by the government. Or they kept making their product "smaller" because their costs were still going up (limited labor pool meant more money for the same labor, limited resources meant resources cost more).

What about the labor pool? Two things--- 1) they started hiring women to fill all those empty job spots. And 2) business start offering "benefits" to go along with the cash salary/wages. One of the benefits offered was "health insurance". That's right, prior to WW2, women stayed at home (and a man could earn enough by working full time to pay for himself, his wife, and his 6 kids), and jobs only paid wages/salary.

America actually instituted an effective maximum wage after WW2. That's why companies started paying their executives in stocks and stock options.

First hurdle is globalisation. If the tax isn't global then every rich person will just leave whatever country makes it. Even if it is global some countries will offer better benefits and it'll just be a race to the bottom again.

Ignoring all that a maximum wage is argued to decentivise the very brightest from making their fortunes and thereby slowing growth. However, personally I would argue something needs done to tackle gross income inequality but the way to do it is through higher marginal taxes and capital taxes not just a max wage.

Perhaps increase (over a generation- 25 years) the top marginal rate from the ~40% it's at now to about 70-80% but make that rate apply to income over 1 million or some fairly high number to avoid flight of high earners.

Then comes the argument of small government which roughly says the government only uses taxes inefficiently and so should be minimised where possible. In that viewpoint the rich with their ridiculous incomes actually invest the funds efficiently and it's better for the economy to let them keep their money.

But what is economically efficient isnt always socially or politically efficient as we've all witnessed over the last 2 years.

T. Econfag

I mean, right now that's the reality of my life so I can't say If be all that bothered by it. However, that's not what we're talking about. This is more along the lines of only making 20 times as much as the lowest earner in your company or only making X amount compared to the lowest paid full time worker in the country.

I agree that globalization is a major hurdle but I'm already way out of my league. How do you feel about a relative maximum instead of a hard cap? As in you can only earn a multiple of the lowest wage at your company, perhaps modified by the number of people employed. Wouldn't that allow for building a fortune while also providing an incentive for job creation and reinvestment

Regardless of globalisation, having high marginal tax rates and capital taxes will slow growth just like maximum wages, although probably not as much.

Since globalisation is inevitable, education reform seems to be a better alternative to harmful taxation policies. If the average worker in the first world is far more educated, they face less competition from the rest of the world.

Keep in mind that any education spending must be much better targeted than we have now. The public believes that any education spending is a good idea, however a lot of it (i.e. community colleges) doesn't have anything but a very weak correlation with higher wage rates.

it's probably difficult how to treat investments and "indirect property". If you take away those things though, it can seriously hurt the desire to grow the company.

Investments are pretty difficult to deal with, especially here. Money from investments isn't treated the same as money from a paycheck and I'm not sure why.

Focusing on education might work assuming you can't educate people from other countries and then pay them peanuts. Isn't that why people are up in arms about the H-1B visas? And why people complain their tech support calls get routed through India?

If people can evade taxes they can circumvent easily a maximum wage limit
Having the company gifting the CEO a new car, paying for his vacation, weekly food and restaurant bills, or as primes.

I agree about education. It is the most cited cure but I still believe top marginal rates should rise, if only to finance it. (Obviously sharp significant tax increases are dangerous and therefore a slow controlled rise would be required).

Economic growth is a distorted idea these days. All growth over the last 30 years has went into the pockets of the top decile, proportionally more so into the top 1%.

Real median wages since 1986 (the year Reagan cut taxes from 50->28%) have actually declined so growth has offered nothing to them albeit still probably better than nothing.

First, the government can suck a fucking dick

Second, from a purely practical standpoint there's always going to be somewhere, some backwater caribbean or pacific island territory or country that wont have a maximum wage, then everything gets moved there

That would make pay rises for the top earners very expensive effectively applying a earnings cap.

> Be CEO, get paid $50 000/month
> Have 2000 workers earning the lowest wage of $1000/month
> Law caps CEO pay at 50 times the minimum lowest paid worker earns
> For CEO to get $5000 month payrise it would require the company to increase lowest worker pay to $1100 and it would cost the company an extra $200 000 dollars a month (instead of $5000)

Also don't forget big companies have tens of thousands of workers making this issue exponentially worse.

If you can't attract good CEO with good pay, by hiring a shitty CEO you are looking at risking:
> No growth (no more jobs or salary increases)
> Financial Losses (loss of jobs or pay cuts to workers)
> Bankrupcy (Everyone loses their job)

I see a lot of cons and very few pros in favour of such pay regulation.

>I still believe top marginal rates should rise, if only to finance it
I don't necessarily believe revenues would have to increase in the long term to pay for education reform.

If you go down a route of school privatisation with vouchers, education could be cheaper in the long term.

>Real median wages since 1986 (the year Reagan cut taxes from 50->28%) have actually declined so growth has offered nothing to them albeit still probably better than nothing
According to pic related they have grown, although I agree that they should've grown more.

As an addendum to what i mentioned, we all know that in the real world corporations in order to mitigate this problem in order to attract good CEO's, they would lobby the government to get somekind of loophole to hide money away and thus not pay income tax on the extra real earnings of the CEO

Well paid ceos actually do very little to improve company profits

Forgot pic.

Possible, but i have no data on this matter myself to argue on that point.

If that is true at the very least CEO's keep it afloat and tend to expand the company even if profits are kept at a steady rate.

After all, as a company what do you do with profits? You save or invest them.

I appreciate the conversation everyone, but I'm off to work now. Thanks for all the info and insight

I don't think many people get more 500k in wages anyway. The truly rich don't work they have investments.

I would literally stop working anymore hours if my wage would start getting into a 100% tax bracket. And if not i would hide my money away by throwing money at lawyers and bankers to find some loophole.

Also instead of asking/receiving payrises, i would ask for more paid holidays or less work hours.

The end result would be the same:
- No extra tax revenue for the government
- Less productivity

100% tax rate is some hardcore commie bullcrap

>more along the lines of only making 20 times as much as the lowest earner in your company

So, in something like retail or fast food where you have minimum wage cogs making $7.25 and hour, we'd cap CEOs, IT professionals, attorneys, and accountants at 300k a year, based on $145 an hour?

Its too easy to get around.
People dont even declare their taxes ffs

Thats fine just hire another person along with you to do your job

No one specified how would that be calculated.

If by salary per hour worked, yes that would be true.

If by total wage per month or year, no. It would just make higher paid professionals stop working extra time.

I know some IT professionals in London that refuse to work overtime after they reach a certain level of overtime pay earnings per tax year.

Well they've broadly flatlined and for men decreased slightly. Perhaps it's post-tax I'm thinking of, on mobile so I'm not going to search the graph but it's fairly irrelevant anyway. It's clear median income has broadly stagnated considering the wider growth that has occured in the same time span.

Privatisation is interesting, not something I've really considered. I'm sure like everything there's potential problems, for example I can think that if it's privatised then it will actually benefit the rich even more as they can afford the best schools (much as they do anyway) but poorer people will be stuck with whatever their vouchers afford making the situation much what we have already (in the UK anyway as that's my experience, public and private education) or perhaps even worse as good teachers become more focussed in rich schools.

To find a way to attract higher quality teachers into schools would be a great policy, something I can think off the top of my head would be incentivising retired industry leaders or academics to do guest classes or something to inspire students into working towards fields that need more people.

But if the ceo makes more profit (other than cutting pay) he gets more pay

Despite my disagreement with a max wage cap you point it something interesting as the polish bloke pointed out.

Once you hit max income you'll start to reduce your working days and that will open new jobs for others.

Singaporean my bad

Limits on salary or high tax brackets don't touch real, preexisting wealth. They just screw over professionals and small businesses.

>I know some IT professionals in London that refuse to work overtime after they reach a certain level of overtime pay earnings per tax year.

Why would they do that?

...

I don't remember exact numbers, but it's basically because their tax rate would increase quite a bit.

Lets say you worked 7 hours in a day and be taxed 30% on the earnings, then work another 2 extra hours and be taxed 50 or 60% on the extra earnings.

How would you feel about working those extra hours if you knew the government would get a substancial amount of the money?

You probably wouldn't work the extra time if you were content with your normal pay.

hut hut hut hut hut hut hut hut hut hut hut hut hut hut hut hut hut hut hut hut hut hut hut hut hut hut hut hut hut hut hut hut hut

But what are the pros of the current system though? What reason do the CEOs have to be earning more in one month than their employees get in a year? Shouldn't it be invested back into the company and create more jobs or a better product? In the US part of the 2008 befuckle with a lot of these companies was CEOs sucking away money through bonuses, vacations, parties etc etc. They became rich, did little to no actual work, and lots of good working class people lost their jobs and homes because of it. Then these same cunts got bailed out, and continued doing the same shit or took out huge severance packages before they even paid back the Fed. An even bigger kick in the balls was the ones who up and left America after taking the bail out. Honestly I'm pretty far right, but I'd never defend a bunch of worthless cunts who have done so much damage to our working class considering I am working class.

If you work too much overtime it will push you into the bottom of the next tax bracket, thus increasing the amount of money that they deduct. Working hard, putting in the extra hours doesn't pay off if you're going to be raped by taxes for your efforts.

Reminder that socialism never failed on its own

it's the worst populist idea i ever heard, solves nothing, contributes to obfuscate the problems, encourages tax evasion.
you are hitting on the 2 smart kids who studied their entire life to become lead engineer or top level actionist for hedge funds, but you are missing on Mr. Shekels trillionaire capitalist gains. What's even the point?

what about American start using their awesome brain powers to force big companies and billionairies pay the same tax % all the common people do?
that would do very good.

if there is someone who knows all the evasion tricks to pay an employee more that's the high ups.
i can only pay you 300k/year? too bad: here is your yearly 300k and now you go to """work""" for me at the Hawaii for 20 days with your family, all paid by the corporation.

>BUH PEOPLE SHOULD ONLY BE AS SUCCESSFUL AS I THINK THEY SHOULD BE SO MY FEE FEES DONT GET HURT FOR NOT BEING AS SUCCESSFUL

Don't make us bring another atomic bomb over there you stupid nip.

There are several issues combined in your statement that don't necessarily belong together like CEO pay and bailouts, market crashes, etc.

The free market logic of CEO pay is acceptable in my view, if shareholders want to ensure their investment is successful they are going to try to have the best CEO pay the company can offer in order to attract the best in order to expand the business or keep it afloat at the very least.

The issue with the 2008 crash is largely different and CEO pay is a drop in a bucket compared to the shit they made. 2008 crash was largely fed from banks loaning out the money they didn't have to people who couldn't afford it and part of this reason was because the government intervened in 2 key ways:
> It told the banks that the Federal reserve would always support them (removing real risk of bankrupcy)
> It incentivised banks to loan money to low income families (some which couldn't possibly pay back)

This made the housing market cost skyrocket which then made lots of people invest into it because the prices kept going higher and higher until eventually the housing costs were higher than alot of people could pay back and thus banks started panicking when they realised how fucked they were.

Moral of the story: Government intervention fucked shit up

If banks had the real risk of bankruptcy (no government help) and the government didn't push the banks to loan money to people who couldn't really pay it back then this would have never happened in the first place.

It's a marginal tax though, moving up into the next band only affects the money you earn in that band, fair enough it implies you earn less for the overtime but it doesn't impact earnings below that so the 40% tax actually makes them consider it not worthwhile?

Yeah, so it'll create new jobs?

Your first point is flawed.

Across the western world the central banks didn't actually tell the banks they would save them if something bad happened but it became implicit as the large banks became so integral to the system that they became "too big to fail".

So it wasn't government intervention completely at fault unless you want to point to the repeal of the Glass-Steagal as the turning point where these banks became TBTF.

Same thing that's wrong with the minimum wage. Freedom vs force. Free market vs govt controlled shit show.

THAS RITE!!! SOCIALISM ONLY FAILED BECAUSE OF THE EVILS OF CAPITALISM!!!!!

Mates it's even simpler than that.. top level executives get most of their renumeration via STOCK issue, not salary. This plan would fuck over salary men and further wreck the middle class and do fuck all towards curtailing exec pay

NOOOOOOO STOP MAKING MORE THAN ME PAY YOUR FAIR SHARE

Let me rephrase your suggestion of a maximum wage

>Should it be legal to rob people who make a certain amount of money?

No, you communist fuckhead. Go hang yourself.

>be productive add millions to the economy
>provide jobs for hundreds of people
>stop working in march because you hit 100% tax bracket

I recommend you look into Alan Greenspan and his role as the Chairman of the Federal reserve, specially in the 2008 crisis.

TBTF banks are cancerous to society.

This. Not to mention most of the so called 1% are paid via stock not a paycheck. OP is an under achieving faggot who wants everybody to be held down.

Businesses own america.

We have trump to fix things for now, once he's gone start dusting off those rifles

1. Ruins incentive to work, especially for self employed
2. In fucking flatiron cunt
3. Execs get shares not salary you utter retards. Your governments are playing you hard

I agree, they are meant to provide a risk aggregating and reducing service (through screening which risks to take) as well as providing liquidity to businesses.

Instead, particularly recently, they have taken ridiculous risk, ultimately collapsing the economy, and then in the recovery refused to pass liquidity to businesses as they kept it to themselves as insurance against more of their bad loans failing.

In their current form they are a parasite on society and a friction on the economy.

It's quite interesting as I always assumed these people were incredibly intelligent but having friends working for various banks makes it clear intelligence isn't high on their list (for front office jobs at least).

everyone with billions moves to china instantly, half american jobs lost

youtube.com/watch?v=jqQPTxo_voo

You can tax their shares on realisation.

I better get an accounting degree, because there will be an inordinate amount of shenanigans to hide assets/income.

Resources aren't free and you aren't entitled to the labor product of others simply by virtue of existing.

Ceo doesnt provide jobs hes just the top guy at the company
Stock options dont circumvent the rule because stock is worth money derp

Except interest, now thats free

>>stop working in march because you hit 100% tax bracket

cool, do that. It will probably get you removed from your position.

Are you retarded?if you make that much you either own the company or are so indisposable they can't get rid of you

The richest people don't work
They don't have wages.

>What are the major problems with a maximum wage?
The problem is that the burden of proof is on you that such a thing is justified, and you always fail at that.

>us companies moving thier executives to china
Hahahahaha