Kulamiena wrote:
I actually don't have any issues with a 5% increase on each dollar over 1 million in earnings. But, until they adjust for non-income benefits including geographic cost of living, pensions and healthcare packages, they aren't really comparing apples to apples, are they. Given the 2 job offers below which would you take?
offer 1:
~$750,000 salary in NE Pennsylvania
~premium healthcare plan paid for in full by company
~50% company match in 401K
~financial planning consultations (including tax preparation) provided at company expense
~membership at fitness facility paid for by company
offer 2:
~$750,000 salary in Los Angeles
~bare bones healthcare plan where you contribute 25% of the cost
Which one are you taking? Offer 1 would be my bet because the benefit package has worth including not having to fully fund the person's own retirement and the salary will go further in NE Pennsylvania than in LA. Dollarwise, which is all that Congress is considering, these two positions are equal. Except they aren't.
As far as "choosing" that isn't an apples to apples comparison in job offers regardless. If the jobs had the exact same pay/benefits I believe it would be the individuals choice. Perhaps the person loves Los Angeles and is willing to work for the same pay, but what would in effect be less buying power in the LA market. There must be some draw to New York, LA, San Fran, Boston, Chicago and other major business areas that make people move there.
Beyond that I would say it is the employers responsibility to make the pay commensurate with the job. If it were an apples to apples comparison and everyone moved to NE Penn because of the lower cost of living, the employer in LA would either have to up their pay or reconsider their location to attract workers.
You also bring up adjustments for benefits. I think benefits are just that: benefits. If your employer wants to provide a gym membership - more power to them. The gym then pays tax on their revenue and everyone is happy. 401ks and IRAs were established to assist people in planning for their retirement. I don't think there is any sort of pay abuse that can occur with them, but I could be wrong. You certainly can't just put money into it and take it out without paying a massive penalty.
And finally - the gold plated health care package. Perhaps the one you describe is one of the "premium" health policies that the government plans to tax insurance companies on. Again, this is your employers choice and part of the way they attract skilled employees.
Personally, I think every employer should provide:
- health insurance
- gym membership
- ira/401k or other retirement planning package
Kulamiena wrote:
You do realize that capital gains are not something that only 'executives' pay, right? The first time I heard this argument it was from Warren Buffet, comparing his own tax rate to his secretary's. It's a really good argument except he didn't address how to shield the secretary from the capital gains tax increase when she sells her home, invests her savings, etc.
I've said it before and I'll say it again, increasing the estate tax rate (I'd say go from 45% current rate to 75%) and lowering the exemption amounts (I'd say go from the current 3.5 million down to 1 million) would allow the generations that benefitted from deficit spending to help pay off public debt or at the very least stave off more deficit spending.
Of course I realize that capital gains aren't something that only executives pay, but I would say that it is only something that the fabulously wealthy
abuse. Just as we have different tax brackets for income, we should probably have different tax brackets for capital gains.
Also capital gains on a house are allowed to reach 250k for an individual and 500k for a couple in
profit before you are required to pay any taxes. Again anyone who is
profiting that much on a home sale can perhaps afford the taxes they must pay in the end. I don't know too many people strapped for cash turning in a 250k+ profit on a home sale. Of course these exemptions only apply to your primary residence, but again if you have more than one home you probably aren't hurting.
And.. I'm pretty sure you are hit with capital gains taxes when you liquidate investments and not the other way around.
As far as the estate tax I would disagree. I think it would be better to raise the tax on money currently being earned, again above the 1 million dollar a year range, than to take what has already been made. Certainly not lowering the exemption.