While Congress is figuring out how to get a second round of COVID-19 stimulus checks to Americans, San Francisco is charging full steam ahead on its end-goal of distribution of wealth. The city recently passed its latest “wealth tax” which supporters affectionately call the “overpaid executive tax,” making another great leap down its already slippery slope towards financial ruin.
National Review assessed the new tax reporting, “even critics of modern income equality see policy prescriptions such as this as counterproductive.” In the COVID-19 era, “San Francisco needs all the help it can get to attract businesses and well-paid taxpayers. This couldn’t come at a worse time.”
“Technically,” reports National Review, “the citywide tax will operate as a levy of at least 0.1 percent on companies that pay their CEO more than 100 times the median pay of their workforce.” 0.1 percent can climb as high as 0.6 percent depending on “how far above the company’s median pay the CEO’s total compensation is.”
The consequential and dangerous precedent set by this new tax is simply laid out by National Review. “Embedded in the name attached to this new legislation is the belief that disinterested third parties should determine fair and appropriate pay.” Whether decided by “city bureaucrats or voters unconnected to the company in question, the notion that such actors should service as the arbiters of proper pay levels is nothing more than a form of price-and-wage control.”
In summation, the “fatal flaw” of San Francisco’s tax and those similar, “lies in the idea that fair compensation should be defined by people other than those who have skin in the game.” Additionally, “once one concedes the principle that legislative intervention is required to force those within a company to change the way it pays people, the door is opened to an arbitrary exercise of power.”
Setting the taxation level at 0.1 is “arbitrary” writes National Review. “Perhaps 1 percent of 5 percent will be the ‘right’ number next year. And perhaps even higher the year after that. The lack of limiting principle here is frightening.”