Why should Corporations be allowed to write off compensation in excess of $1Million

[FreakinDJ]

Huge Wall St. Bonus structures have actually forced many of the Financials out of the profit margins

It certainly IS NOT an investment into the infrastructure of our corporations. "H.R. 857:Limit Executive Compensation Abuse Act" sought to limit the compensation of executives, but only for those companies receiving emergency economic assistance from the Government.

But why - in the interest of creating jobs would not want to impose tax incentives to minimize CEO pay and maximize Re-Investment in the corporations and in creating Jobs

[elleng]

1. No good reason.

[Orrex]

2. It's simple, really.

"The Talent" has no incentive to work unless you pay them huge sums of cash, while the serfs have no incentive to work unless you pay them next to nothing.

[RegieRocker]

3. That makes no sense to me.

[rucky]

9. If your wages just cover your basic needs...

you're less likely to quit, strike, or do anything to risk losing your job - especially in this engineered depression. You'll be willing to work for cheaper than you deserve, because there are no other alternatives.

Meanwhile, the people who manage the capital (money & human) are rewriting the rules in their favor. As long as they have profit to show, they'll reward themselves. The profits - instead of going to expand the US workforce - are going to investments in the up-in-coming nations like China, India & Brazil. These are winning bets. They don't need a strong American consumer or a solvent US economy to survive anymore.

[FreakinDJ]

4. Sufficienty proven to have an adverse effect on corporations

Short Term Profits with "Long Term Effects" is a large part of the problem with America's corporations right now. All those "High Talent" individuals seeking to boost their quarterly bonus have been engaged in decisions and policy making that has been leading to the demise of many of our corporations.

So if you believe "What is good for Corporate America ..." then limits on the amount of individual compensation that can be written off as a business expense makes perfectly good sense

[Lint Head]

5. Corporation shopping and roulette is also an issue with executives.

Good talent moves on to make more money leaving behind others to pick up their mess.

[FreakinDJ]

6. Fine let them shuffle the deck - but No Corp can write off the expense

of personal compensation in excess of $1Million on their corporate taxes - so in essence the playing field is level in that respect

This would encourage corporations to re-invest more in their own infrastructure, (Durable Goods) and create jobs

[rasputin1952]

7. The argument most often presented is that...

institutions must pay a high price for exceptional talent...facts speak otherwise.

It appears to most people that the most highly compensated individuals did not do much to expand said institutions, rather they increased profits by cutting back on labor and producing shoddy goods. To add insult to injury, any "profit" realized did not go to the average outside of the corporations inner workings shareholders as one would expect, rather it went to bonuses and even more perks for those at the top.

It should be understood as well, that corporations are a wholly different animal than most people understand, they work by "one share, one vote", if 10,000 shares are divided amongst say 500 individuals equally, that gives each 20 votes; some of these votes will go to the person at the top, others will not. If, however, the individual at the top has common shares, (different rules apply for preferred stock), as well...say 8,000, that means that one individual has 8,000 votes, ensuring that whatever he wants to happen will happen, to include massive bonuses, the investor therefore loses any compensation for his/her investment, (or receives a pittance). Bottom line, the rules of corporations are stacked against the common investor, but enough is usually made to keep them interested.

FWIW...many of the highest compensated CEO's, CFO's etc, brought many corporations to the brink of bankruptcy, (quite a few actually drove the businesses into the ground), and walked away with piles of cash and a new job at a corp where they did the same thing.

Often, logic and good faith are not parts of the equation when it comes down to how corporations work, although some do a fine job in serving the consumer and the investor...these are hardly ever mentioned though.

Edited: typo...:blush:

[FreakinDJ]

8. Excellent observation !!

My points exactly