Adonis Diaries

Maximum yearly wage limit protests: A multiple of minimum wage?

Posted on: February 13, 2012

Maximum yearly wage limit protests: A multiple of minimum salary?

What is the current minimum wage in your country? For example, if it is $15,000 a year (you don’t have to pay a dime in taxes at that level) do you think this evaluation was meant to be able to survive in New York City? Is the minimum wage meant to exclude “unwarranted” people from overcrowding “VIP cities” without imposing explicit discriminatory laws prohibiting entrance to the “sacred cities”?

The New York Times published an alternative recourse to limiting individual maximum yearly revenues “Don’t tax the rich. Tax inequality itself” by Ian Ayres and Aaron Edlin. These “eminent” economists and jurists suggested that the max. revenue should be set at 36 times the median income.  The median revenue is the cut-off line between 50% of population income:  income lower than the median represent 50% of the poorer citizens.

Suppose the median income is $35,000 oer year. Can you rent a condo in any major city (since renting is far more economical than purchasing properties…)? Can you own a second-hand quality economical car and maintain it adequately?  Can you buy fresh fruits and vegetables and once a week steak meal?

How many houses, cars, and luxury items can someone generating $15 million a year spend on? That what 36 times median income amount to!  Do you think “perception of inequality” would vanish if the government set this limit?

Do you know that in 1918, individual revenues surpassing one million were taxed 77%?  In 1944, Congress imposed 94% on incomes above $200,000.  Even during Ronald Reagan the tax break was 50% of the rich classes, before reaching 28% in 1988. What is the tax break now on high income?

It is 35% with a stitch: All profits resulting from transactions in capital gains, shares, obligations… are taxed 15% only.  Basically, the ultra rich are plainly paying 18% tax rate.

Do you know that in 1955 the richest 400 people in the US gained only $13.3 million (after factoring in inflation) and paid 51% in tax rate?  That in 2008, the 400 richest generated $270 million and paid only 18% in tax rate?

Do you know that the same alternative suggested in the New York Times article was proposed a century ago?  Felix Adler, founder of National Child Labor Committee, had launched a vigorous campaign demanding that individual revenue be limited to $100,000 (about $2 million in current dollar)?

Back then, Amos Pinchot, chairman of American Committee on War Finance, declared to Congress:

“Two percent of the richest American capture 65% of the total wealth.  If the State has the right to confiscate the life of a citizen for the general interest (dispatching him to war battle fields), shouldn’t the State enjoy also the right to retain the wealth of the richest class in critical periods?  How can a state go to war and pretend to defend democracy and plutocracy in the same vein?”

Back to beginning: How can you spend $15 million and not exhibit status of inequality? Would Congress abolish cult clubs for strictly the rich?  Do you think the sense of inequality would vanish if you knew someone standard of living revolves around $15 million a year?

Suppose the community or State provides quality public schools for free, cover healthcare expenses, secure jobs, and cover apartment rent…How much an individual should earn maximally in order to reduce the sense of inequality among th citizens?

Note 1: Is it a coincidence? In 2011, Egypt government fixed the max salary for public servants to 35 times the minimum salary of $100.

Note 2: Post inspired from an article by Sam Pizzigati in the French monthly “Le Monde Diplomatique” # 695

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