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San Francisco voters approve taxes on highly paid CEOs, big businesses

latimes.com

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Re: San Francisco voters approve taxes on highly paid CEOs, big businesses

#211

Earlier quoted context omitted.

CEO compensation historically wasn’t orders of magnitude greater than worker pay like it has ballooned to today and there were plenty of long term jobs. This just formalizes the idea that there shouldn’t be an egregious difference in compensation that was commonplace before the idea that a corporation’s sole purpose is to maximize shareholder value became the main driver of CEO compensation.

I think you missed parent’s point, which is that companies will have (yet another) incentive to replace their lowest paid workers with contractors. First they came for the janitors, but I did not speak up, for I was not a janitor...

I'm completely at a loss as to why they wouldn't have already done as much of this as it was conceivably possible to do right now - or wouldn't get there eventually.

Companies don't pay you more money because they CEO looks at his salary and goes "yeah I think I have enough".

Re: San Francisco voters approve taxes on highly paid CEOs, big businesses

#212
post #153

Earlier quoted context omitted.

CEOs are all just going to move out of San Francisco.

And/Or move their companies too. Particularly all the "tech startups" that think they don't need physical office buildings anymore. For a lot of companies, SF is becoming difficult to justify. Well-intended ideas, not fully thought out, leading to unintended consequences... nothing really new for SF.

I understood this to be the primary intended consequence!

San Francisco is overheated and a majority of residents would expect to benefit from CEOs or tech companies reducing their pressure on housing and services.

Re: San Francisco voters approve taxes on highly paid CEOs, big businesses

#213

This raises some interesting questions / side effects: 1) Companies may now have a direct incentive to have their lowest income earners be outsourced/contracted out to boost the median pay amount. 2) It was smart of them to include compensation such as stock options. However if a city starts to expect this income, it will all go away in recessions when CEO's stock options are not valuable. ie more money to the city i…

2 is true of most forms of taxes though, although I agree this will likely add even more volatility to revenues

Re: San Francisco voters approve taxes on highly paid CEOs, big businesses

#215

This raises some interesting questions / side effects: 1) Companies may now have a direct incentive to have their lowest income earners be outsourced/contracted out to boost the median pay amount. 2) It was smart of them to include compensation such as stock options. However if a city starts to expect this income, it will all go away in recessions when CEO's stock options are not valuable. ie more money to the city i…

1) Lowest-income jobs that can easily be outsourced are very likely already outsourced. If the company has the option to do this, why should it hold off doing so?

Re: San Francisco voters approve taxes on highly paid CEOs, big businesses

#216

does this target only CEOs? what about COOs, CTOs, and other C-level executives? Board members?

> does this target only CEOs?

No, "CEO Tax" is a popular term for this style of tax, but its not tied to CEOs specifically; its triggered by the pay ratio between the "highest paid managerial employee" of the firm and the median full-time-equivalent pay of full-time and part-time employees based in the City.

Re: San Francisco voters approve taxes on highly paid CEOs, big businesses

#217
post #210

It will work out well fiscally because giant companies will suck it up and pay, but it looks like a bad strategy from a forward-looking point of view. You want to incentivize future growth too, and you want to make sure that 20 years down the line, you have the new FAANGs of the world giving you millions in tax dollars, because history has shown that the largest of companies can eventually die out, and tech is full o…

So they show do nothing about today's inequality because this will get them more taxes in 20 years? (Unless someone makes the same point 20 years in that they should better wait another 20 years)

OC didn't claim they should do nothing. He just said that this specific way was short-sided.

Re: San Francisco voters approve taxes on highly paid CEOs, big businesses

#218
Brings to mind the last paragraph here (see my comment below for the ending):

> By the time of Plato’s death (347 B.C.) his hostile analysis of Athenian democracy was approaching apparent confirmation by history. Athens recovered wealth, but this was now commercial rather than landed wealth; industrialists, merchants, and bankers were at the top of the reshuffled heap. The change produced a feverish struggle for money, a pleonexia, as the Greeks called it—an appetite for more and more.

> The nouveaux riches (neoplutoi) built gaudy mansions, bedecked their women with costly robes and jewelry, spoiled them with dozens of servants, rivaled one another in the feasts with which they regaled their guests. The gap between the rich and the poor widened; Athens was divided, as Plato put it, into “two cities:… one the city of the poor, the other of the rich, the one at war with the other. The poor schemed to despoil the rich by legislation, taxation, and revolution; the rich organized themselves for protection against the poor. The members of some oligarchic organizations, says Aristotle, took a solemn oath: “I will be an adversary of the people” (i.e., the commonalty), “and in the Council I will do it all the evil that I can."

> "The rich have become so unsocial,” wrote Isocrates about 366 B.C., “that those who own property had rather throw their possessions into the sea than lend aid to the needy, while those who are in poorer circumstances would less gladly find a treasure than seize the possessions of the rich.”

> The poorer citizens captured control of the Assembly, and began to vote the money of the rich into the coffers of the state, for redistribution among the people through governmental enterprises and subsidies. The politicians strained their ingenuity to discover new sources of public revenue. In some cities the decentralizing of wealth was more direct: the debtors in Mytilene massacred their creditors en masse; the democrats of Argos fell upon the rich, killed hundreds of them, and confiscated their property. The moneyed families of otherwise hostile Greek states leagued themselves secretly for mutual aid against popular revolts.

[1] Will Durant. “The Lessons of History.” p. 58-60

Re: San Francisco voters approve taxes on highly paid CEOs, big businesses

#219

Earlier quoted context omitted.

CEO compensation historically wasn’t orders of magnitude greater than worker pay like it has ballooned to today and there were plenty of long term jobs. This just formalizes the idea that there shouldn’t be an egregious difference in compensation that was commonplace before the idea that a corporation’s sole purpose is to maximize shareholder value became the main driver of CEO compensation.

I think you missed parent’s point, which is that companies will have (yet another) incentive to replace their lowest paid workers with contractors. First they came for the janitors, but I did not speak up, for I was not a janitor...

It would be good if they said something like "staff from other companies who spend more than 50% of their work week at your office will be included in your company average wages, even if hired through a subcontractor" — like residency requirements but for employees — to cover catering/security/reception jobs etc. that may get outsourced.

Re: San Francisco voters approve taxes on highly paid CEOs, big businesses

#220

It will work out well fiscally because giant companies will suck it up and pay, but it looks like a bad strategy from a forward-looking point of view. You want to incentivize future growth too, and you want to make sure that 20 years down the line, you have the new FAANGs of the world giving you millions in tax dollars, because history has shown that the largest of companies can eventually die out, and tech is full o…

This assumes that the performance of companies is driven by the CEO much more than the employees. If the Bay Area has great FANG companies because of talented workforce here, then CEOs will gladly take a pay cut to be able to employ the best workers.
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