CEO Surprise: Please Raise My Taxes
Netflix CEO suggests alternative to executive pay cap: a 50 percent tax.
Feb. 7, 2009— -- It's rare to hear anyone say "please raise my taxes," least of all a CEO who makes more than $2 million a year. But in a New York Times Op-Ed piece Friday, that is exactly what Reed Hastings, CEO of the popular DVD rental service Netflix, did when he called on President Obama to raise taxes on corporate executives and other wealthy people.
Executives have come under a harsh spotlight in the financial crisis, with much of the downturn attributed to their irresponsibility and greed. Hastings argues against the pay cap for CEOs that Obama announced this week, suggesting instead that executives' income as well as their taxes be raised.
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If CEOs and others who make more than $1 million annually pay half of their earnings in taxes, he says, it's a win-win: Companies get the best people, executives still get well paid and the country gets a tax boon.
One need look no further than to three of Obama's Cabinet nominees, including Treasury Secretary Tim Geithner, to know Americans are generally opposed to paying high taxes. All of them admitted to not fully paying their taxes
Hastings, who did not return a call from ABCNews.com, writes that other attempts at capping executive salaries, including a Clinton initiative to halt executive pay at $1 million, did not work. He does not, however, mention that tax rates in the 1970s for wealthy Americans hovered at around 50 percent and much of the economic growth in the 1980s, conservatives argue, was a result of tax cuts.
As the economy spirals ever downward, liberals and conservatives have each taken up their traditional banners on how to best stimulate growth, with Democrats calling for more government intervention and higher taxes and Republicans calling for tax cuts.
It is no surprise to hear any liberal calling for a tax hike; it is a surprise, however, to hear that call coming from the boardroom.
While Hastings' suggestion might have its supporters, there is no shortage of executives -- especially at companies like Hastings' that do not receive funds from the Troubled Assets Relief Program -- who believe they are entitled to the money they have earned. There is also no shortage of conservatives who believe lower taxes allow private individuals to stimulate the economy through spending.
