Stop Letting Billionaires Shirk Their Duties to the Community

We all seem to be suckers, distracted by the Trumpian antics and losing focus on corporate privilege and compensation. We shrug it off as if to say, “Shit happens.” But if we take some power into our own hands, we can make good things the reality, rather than losing ourselves to a national preoccupation with Donald Trump. The best way to predict the future is to create it.

A federal law still in force from the Obama era requires disclosure of CEO pay of publicly-traded corporations and the ratio to average employees’ pay. The data are starting to dribble in. They are not pretty, especially in our own state.

Expedia CEO Mark Okerstrom made $30.7 million in 2017. That is 431 times the pay of the typical Expedia employee. T-Mobile US CEO John Legere made over $32 million. That is 424 times the median pay of $55,739 for T-Mobile employees. Now we know who is cashing in on those incomprehensible cell phone charges we all seem to get sucked into. It’s not the workers, it’s the corporate elite who rule over them and us.

The median annual wage at Amazon is $28,446. Amazon’s executive officers, not including Jeff Bezos, averaged over $8.6 million a year for each of past three years. Each of these executive officers additionally realized on average $17 million in vested Amazon stock in 2017. These officers and the Amazon Board, minus Bezos, own $593 million in Amazon stock. And of course, the big daddy at Amazon, Bezos himself, has Amazon shares totaling $145 BILLION.

What does this have to do with public services, education, housing, transit, health care? Nothing, because we don’t tax income or wealth in our state. Of course, we could. And then we could begin to fund higher education and early childhood education as the public services they are, not some scholarship gift from another corporation. We could also then lower property taxes and sales taxes that affect the poor and middle-class more than the rich. We could do this right now with an excise tax on executive compensation in our state.

Here is how it would work: for any compensation for an employee that exceeds $1 million, the employer would pay an excise tax on income above that $1 million threshold to fund public services. It is not a novel idea; it’s already in federal law. There is no good reason we couldn’t replicate this in our state.

We could place a 10 percent tax on compensation in excess of $1 million, a 1 percent tax on annual vested stock in excess of $5 million, and 0.5 percent tax on the values of shares owned in the employee’s company in excess of $50 million. That simple mechanism would net about $155 million just from Amazon. That would be enough to offer tuition-free community college for all students for their first year in Washington’s colleges.

Just looking at compensation, not stock, we now have the data for 28 publicly traded companies headquartered in our state. Taxing compensation in excess of $1 million at 15 percent and compensation in excess of $10 million at 25 percent, the state would gain $35 million from these 28 companies. That would enable health care coverage for all early learning caregivers and teachers across the state.

These are net positive trade-offs. Bezos really doesn’t need to spend billions on a private rocket into space. Even though Amazon has been a historically stingy community partner, it’s seems Amazon realizes now that it should at least look like it’s giving back.

We certainly need to open up higher education to all comers, and make sure that the people who care for our youngest children have health care themselves. Taking the excess income and wealth of the corporate elite for public goods and services is good for them, and good for us.

Posted in An Inclusive Economy

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