Havard Professor Gregory Mankiw again raises the issue about compensation of the wealthy across many fields in society today. First he uses Robert Downey Jr's $50 million compensation for his role as Iron Man in the Avengers blockbuster as an example of income well deserved, even in the public's opinion. However, in some cases, such as in the finance industry, it is more difficult to see why CEOs are so highly compensated; Mankiw argues that the decisions they are responsible for making have significant monetary value for shareholders, employees and stakeholders.
He adds that their compensation is subject to taxes as high as 33.8% that can serve as a redistribution effort by the government to fund public services/goods.
He adds that their compensation is subject to taxes as high as 33.8% that can serve as a redistribution effort by the government to fund public services/goods.
5 comments:
This is a very interesting article. People have no problem with the income of celebrities, yet they always question the compensations of CEO or CFO, just because they are the people who manage the economic resources. The salaries and bonuses of leaders of companies have been increasing drastically, but I agree with Dr. Mankiw that it is not a problem at all, because CEOs and CFOs work hard under stressful condition in this tough economy. The main problem in our society is not the over-compensation of good CEOs, but the over-compensation of bad ones.
This article makes a point that those highly paid people, whether they be actors, athletes, or CEOs, pay very high taxes, and therefore they make a higher contribution than those in lower economic classes. This is strictly from a monetary standpoint, but they do fund the government more than anyone, so they do have a trade-off to making all of the money they make.
I agree with Nam. I think it is not fair that people are more lenient with the income of celebrities while they ask for the compensations of high-income CEOs or entrepreneurs. I think they should be treated the same. Recently, I read an article that deals with rich people in Korea who never pay taxes by hiding their wealth in the name of other family members. I think government should pay more attention to people like them because it is not fair how they never pay tax and still are treated the same as people who paid tax.
Post a Comment