Sunday, March 22, 2009

Capping Pay — Part 2

On February 6, 2009, I blogged on the issue of capping pay and bonuses at $500,000 for financial firms receiving government (taxpayer) bailouts. Now the House of Representatives has reduced that limit to $250,000, with a punitive tax of 90% on income exceeding that amount. The Senate, for its part, is proposing 70%. I wrote on February 6:

“How far might we extend the cap? How about professors who have outside earnings from royalties, speaking, consulting, or business? Let’s cap them too. After all, almost every academic institution is either funded by state governments, and/or receives federal grants, and accepts tax-deductible (tax expenditure) contributions. Ditto for every other business, profession, or line of work that receives government support.”

Once the professoriate and other left-leaning professions rise up against the punitive tax on their above-cap earnings, the proposal will vanish from the political area.

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