Capping Executive Pay

Friday, February 02, 2007
I was watching TV when the topic of executive pay came up.

There is a provision in the minimum wage bill before congress about effectively capping executive pay by taxing it. Now I admittedly don't know the full details of how they will try to limit executive pay, it seems they want to eliminate some loopholes in the tax code, but this post is not about the details.

The person who was arguing for caps on executive pay gave the usual rhetoric of how it isn't fair that CEOs make so much money, but I loved his reasoning of why government should do anything about it. He made the argument that it is government's responsibility to do something because they subsidize these corporations and rich people by making a tax code that essentially allows them to not pay taxes.

Oh, I see. So let's try and fix the loopholes, which are caused by adding more and more rules to an overly complex tax code, by adding more rules. It's like trying to dig yourself out of a hole. It's just simpler never to get in the hole in the first place.