Actually, the owner was in kind of a secondary role. They bought in someone from outside as CEO to basically run the operation but the whole situation seemed a little too corporate-raiderish for me (talks of selling a few years down the line left me with visions of a few grand and a gold watch).

 

Yes, but as I said. in the case of those trades people, it's what the market can bear.

Although it may be all the same company, it's fundamentally different businesses.

FWIW, at my employer, we contract all that out so the headcount isn't sitting on our books. The contract company then dictates a flat rate.

 

Regardless of tradesman or execs, compensation is always dictated by what the market can bear.

 

Yes the %'s make that look like a great case (richest 1% of taxpayers paid 25%). However what is the % of difference in pay between the two groups? And what about the % of individual income each class is paying.

How many people in the lower income bracket even have assets which are taxed by captial gains, probably nill.

I'm not some champion of the poor, nor am I an accounting wiz, and when I make my money I want to keep it too.
I'm just saying the argument of the wealthiest pay the the majority of the taxes, and that top 1% argument is usually used out of perspective. Seriously the top1% money makers in this country are indeed making alot of money, probably more than 25% of all taxable income, and I'm sure they have some great accountants who are helping them maximize that money (see taxshelters).

However I think you are on the level and totally agree with your dividend tax statement.
In the end this is a capitalistic country we live in.

back on topic/

 

Ark, I totally agree that I'd love to make millions, even if I pay more in taxes than the blue collar guy. My point to Zeiss was simply that they pay a lot of taxes, while he was saying that capital gains, inheritance tax etc was nil.
When I started doing taxes a long time ago, there were lots of tax shelters, and even owning rental properties was a good way to cut your taxes. But I have to tell you, most of them are long gone. The 1986 Tax Act started what's called Passive Losses, and that wiped out 90% of them. Investing in oil wells is still a good one that can be taken advantage of, but you can also lose all your money real easy. This is another reason the middle class is getting hurt with taxes, along with the Alternative Minimum Tax, but I won't go there.
The trick is to be really poor or really rich!

 

Yes. . . which leads us back to the actual question. Can the market bear what we're compensating CEOs? What is the market on them, seeing as they're at the top of the food chain? Are they at the top of the food chain?

 

Lots of people complain that the execs of a company get paid a lot more than the average worker, but do not understand how difficult the top jobs really are.

The article posted about the board chairman who makes $21,000/hr part time is, in my opinion, very reasonable... He is the founder of the company. The reason why there is so much competition between companies and products (which drives down prices and increases quality) is because of this. Most of us will never know how hard it is, and how risky it is to start up a business. Entrepreneurs put everything on the line, and about 1 in 20 suceed... not very good numbers... So why do they do it? The driving motivation, the possible rewards. I am working on starting up a business myself, and countless hours go into research and development and thousands of other factors and areas that need to be covered.

As stated above, talent/skills/ideas are very hard to put a value to. Ivy League and Elite colleges routinely turn down people with 1600 SATS (2400 now), why? because they look for creativity, not just knowledge. Someone with a "photographic memory" isn't needed as much anymore, due to the availability of information and how easy it is to access it. What is needed is people who are good problem solvers and creative.

If you think about it, its like a racehorse... A million dollar race horse may only be 1 second quicker than the other horses, why is it worth so much? The same goes for the top paid athletes, and the top paid executives and business founders. Why do they get paid so much? because they can do what nobody else can, if others could, than they wouldn't have that job.

 

Unfortunately you are too correct.

 

[QUOTE=YoZUpZ,Jan 11 2008, 03:54 PM] Lots of people complain that the execs of a company get paid a lot more than the average worker, but do not understand how difficult the top jobs really are.

The article posted about the board chairman who makes $21,000/hr part time is, in my opinion, very reasonable... He is the founder of the company. The reason why there is so much competition between companies and products (which drives down prices and increases quality) is because of this. Most of us will never know how hard it is, and how risky it is to start up a business. Entrepreneurs put everything on the line, and about 1 in 20 suceed... not very good numbers. . .

 

Angelo Mozilo, CEO of Countrywide Financial Corp, is capable of receiving $115mil in severance pay. This isn't based on their profits (or lack thereof these days), it isn't based on the pending purchase by BofA. It's just, from what I've read, what's written into his contract from when he hired on. (Oh, that $115 is in addition for lifetime flights on the company plane, and free country club to 2011.

I don't know the details surrounding his hire, or his effect on the company and its performance. Is the above of the rich preserving wealth for themselves and their kind? Is it an example of how difficult it is to recruit somebody competent for such a position?

How does Steve Jobs, a very wealthy man with a $1.00 salary (yes, one dollar) fit in?