Except the bulk of the taxes come from W-2 earnings. How many CEO’s have $0 salaries but are compensated with equities and deferred compensation?[/quote]
If a CEO is paid in stock, he still has to pay tax on that stock. That is, a CEO can’t get out of paying tax just because he is paid in something that is not “cash”. For example, if a CEO is paid in cows, he still has to pay taxes on the fair value of those cows. So this is a straw man.
[quote=fat_lazy_union_worker]
Also, if we were to remove the cap on social security taxes on income, who is this really hurting?
[/quote]
Under Obama’s plan, the social security tax will apply to income up to something like $95K, then there would be no social security tax on income between $95K and $250K, and then the social security tax would apply to income over $250K. Another straw man.
[quote=fat_lazy_union_worker]
I can see this already. Across the nation, CEO’s are going to (for the interest of the company) starting taking a $0 salary…(Of course the equity will be doubled, and especially at these market prices, that’s even more reward for the future).
Think about it.
[/quote]
As I stated above, the CEOs will be taxed on that equity when they receive it. Then, they will be taxed at a higher capital gains rate when they sell that equity. Another straw man.
[/quote]
So, stock gains are not taxed at income tax rates. Capital gains rates are lower. No Social security tax is taken from these gains.
So, if you consider these three items labelled as “straw man” arguments it becomes obvious that taking stock options rather than salary above 250K, becomes a way to avoid BOTH the increase in social security taxes on payroll aver 250K and any other federal income tax rate increases in this category.
Calling each of these things individually straw men, without considering their combined effect is itself a straw man.
