Apple CEO Steve Jobs used to brazenly park in handicapped spaces, notes the Atlantic’s Joel Pinsker, and motor around without license plates. And why not? A $50 or $100 traffic fine would barely register as even a nuisance for a billionaire like Jobs.
But what if traffic fines varied by income? In Finland – and other nations from Denmark to Switzerland – they actually do. “Sliding fee” fines in these nations give deep pockets reason to think twice before they speed or otherwise trample on community safety norms.
One Finnish businessman recently had to pay a 54,000-euro fine, the equivalent of over $58,000, after police caught him going 65 in a 50 zone. That speeder took home just over $7 million in income last year.
Might the time be ripe for sliding-scale fees in the United States? Judith Greene of the nonprofit Justice Strategies thinks so.
The protests that followed last year’s deadly police shooting in Ferguson, Mo., Greene notes, have revealed how routinely local courts are gouging poor people on fines for minor offenses. Instead of gouging the poor, she posits, maybe we should make like the Finns and make sure our penalties amount to penalties for everyone, even the rich.
In Congress, Rep. Barbara Lee, D-Calif., is also now looking at tax justice and America’s rich. Lee just introduced a new version of her Income Equity Act, legislation that denies corporations tax deductions for any executive pay that runs over $500,000 or 25 times the pay of a company’s most typical workers.
Under current law, corporations can deduct off their taxes whatever excessive sums they lavish on their execs, so long as they label these outlays “performance-based.” In effect, notes Rep. Lee, average working American families are now subsidizing windfalls for America’s most outrageously paid corporate chiefs.
Corporations in the United States haven’t historically had to reveal the pay ratio between their top execs and workers. But the Dodd-Frank Act enacted in 2010 includes a provision that mandates this disclosure.
Unfortunately, this mandate has never been enforced. The Securities and Exchange Commission, under heavy pressure from corporate lobbyists, has been dragging its feet on issuing the regs that would enable the mandate’s enforcement. Last month 58 members of Congress sent the SEC a formal letter protesting the long delay and demanding action.
Why is Corporate America working so hard to kill executive-worker pay ratio disclosure? Look no further than Rhode Island for an answer.
There, State Sen. William Conley introduced legislation that directs state officials to start “giving preference in the awarding of state contracts” to business enterprises whose highest-paid execs receive no more than 25 times the pay of their median workers. A similar bill last year won a Rhode Island Senate majority, but never came up for a House vote.
Bills like Conley’s could quickly multiply if corporations actually had to follow the Dodd-Frank law and annually publish their top executive-median worker pay ratios. Overall, major corporate CEOs now pull in over 300 times the average American wage. Would reaping such taxes make a difference? Look at California.
No state has more billionaires than the Golden State. That hasn’t helped California kids much. Nearly a quarter of them, 23.5 percent, live in poverty, and the state is spending less on child care and preschool programs than it spent eight years ago, before the Great Recession.
That’s reason enough, proposes Roy Ulrich of the University of California-Berkeley’s Goldman School of Public Policy, for a state wealth tax, an annual levy on household assets worth over $10 million.
This net worth tax, adds Ulrich, should include penalties for substantially undervaluing or attempting to hide an asset. What sort of penalties? One possibility: In India, if a taxpayer’s listed appraisal grossly undervalues an asset, the government can purchase that asset for the taxpayer’s listed assessment price plus 15 percent.
Let’s try doing that here.
Veteran labor journalist Sam Pizzigati edits Too Much, a weekly journal sponsored by the Institute for Policy Studies about wealth and inequality.
Photo: AFL-CIO Executive Paywatch