Netflix CEO To Congress: Please Raise My Taxes to 50%; Hey, He Can Pay That Higher Rate Right Now
I’m the chief executive of a publicly traded company and, like my peers, I’m very highly paid ($3.5 million in 2007 including options exercised). The difference between salaries like mine and those of average Americans creates a lot of tension, and I’d like to offer a suggestion. President Obama should celebrate our success, rather than trying to shame us or cap our pay. But he should also take half of our huge earnings in taxes, instead of the current one-third.
Then, the next time a chief executive earns an eye-popping amount of money, we can cheer that half of it is going to pay for our soldiers, schools and security. Higher taxes on huge pay days can finance opportunity for the next generation of Americans.
Another advantage is that it would also cover the sometimes huge earnings of hedge fund managers, star athletes, stunning movie stars, venture capitalists and the chief executives of private companies. Surely there is no reason to focus only on executives at publicly traded companies.
This week, President Obama proposed imposing a $500,000 compensation cap on companies seeking a bailout. It’s a terrible idea. We all want the taxpayers’ money returned, and capping compensation at bailout recipients will just make it that much harder for those boards to hire and hold on to the executives who can lead their companies to compete and thrive.
Perhaps a starting place for “tax, not shame” would be creating a top federal marginal tax rate of 50% on all income above $1 million per year.
~Reed Hastings, CEO of Netflix, in Thursday's NY Times
According to one writer at US News and World Report, in an article "One CEO Who Gets It":
The jury’s still out on whether there’s a modest CEO in the land. But there’s at least one very clever CEO: Reed Hastings of Netflix. In a New York Times op-ed, Hastings argues that President Obama’s proposal to limit certain CEO pay is “a terrible idea.” Most CEOs probably agree. But instead of the usual bromides about how CEOs are geniuses who deserve every penny they earn, Hastings proposes an alternative: Tax anybody who earns over $1 million – which includes most Fortune 500 CEOs – at 50%. Including him.
Dear Mr. Hastings:
If you think that you should pay more in taxes, you don't need to wait for Congress to increase the highest marginal tax rate to 50%. You can actually voluntarily pay more taxes right now, today by making a gift to the United States Government. Tax yourself for your 2008 earnings above $1 million at your proposed rate of 50%, and then simply write a check payable to the "United States Treasury" for your additional taxes owed, and mail to the address below. And if you think 50% is a good rate for earnings above $1 million now and in the future, please consider paying that rate on your earnings above $1m in 2007 and all previous years, and add that amount to your gift. You could not only be clever, you could also set a great example for other CEOs.
Gifts to the United States
U.S. Department of the Treasury
Credit Accounting Branch
3700 East-West Highway, Room 6D17
Hyattsville, MD 20782