Geithner announces salary caps on executives at companies receiving government money. This is fair and good and, in fact, not an unusual demand when putting money into a company, especially a troubled company. No investor wants to fund a company just to see the money flow back out to executives. No taxpayer should want that either.
I believe this program also applies to the car companies receiving government money. This also makes sense. Any company that gets taxpayer money should have this cap, as a matter of consistency. I hope that companies like Cargill and Archers Daniel Midlands, who receive massive farm subsidies, will be included next time a farm bill is up for debate. This seems only fair, since their executives are paying themselves with our money.
And it’s not just federal subsidies we should look at. Any government subsidy should incur the obligation to not pay more than a living wage to those taking the dole. Consider the state and city subsidies of the new Yankee Stadium: nobody in the Yankee’s organization should be taking a salary of more than $500k, including the players: I have heard that some are taking home quite a bit more taxpayer money than this.
Preferred tax treatment is no different than government payments, if you think about it. Both result in more money in the company’s pocket and less in the taxpayer’s pocket. So, executives of not-for-profits and other entities that don’t pay taxes should be subject to the salary cap. Charities like the Metropolitan Museum of Art have paid execs more than $500k. Not to mention universities: my alma mater has quite a few people living large on my tax money.
Then there are government subsidies that are not direct cash payments or cash credits. For instance, the use of the airwaves at below-market costs. For the privilege of relying on these, the executives of Disney and GE need to be subject to the salary caps. And the cell phone companies, of course.
Similarly, government enforced monopolies cause higher payments from consumers to monopolies. Because these are government mandated transfers, they are certainly a form of tax. Companies that rely on government enforced monopoly must be included in the salary cap. This gets Major League Baseball, of course, but they are already in there. The cable TV companies are certainly government protected monopolies, so they should be salary-capped. And then there are the patent and copyright holders. Patents and copyrights are inarguably a form of government protected monopoly. So, the movie and record companies, for instance, need to have caps. And then, by extension, the actors and musicians. And don’t forget Oprah, and Steven King. Oh, and the software companies.
This is getting to be a pretty broad net, but it’s certainly fair to say that if anyone getting taxpayer funded support of their business is going to have a salary cap, then they all should. And if the companies in question don’t like it, then maybe they should stop taking my tax money.