One of the signature concepts of Conservative messaging is the "Overton Window", a concept of Joe Overton at Conservative think tank the Mackinac Institute. It dictates that efforts are made to dictate the terms of debate in such a way that options outside of Conservative orthodoxy and goals cannot be considered as options.
That's why it has taken YEARS to get an open dialogue going over a record breaking, extremely damaging level of inequality. Conservative orthodoxy dictates that Trickle Down Economics, privatization of government services, and deregulation will inevitably lead to a future in which all who want to do well financially will be able to do so. 35 years of a slowing economy, increasing economic instability, and incomes that peaked 15 years ago for over 80% of workers are finally moving the Overton Window, with a rush of new research by eminent Economists throwing it wide open.
Now that it' acceptable to look through the window and see the dangerous level of inequality that's been building since the onset of Reaganomics we can start talking about solutions. I have a bunch of them and am willing to talk about them, but right now I'd like to highlight one that's brand new.
Everybody is talking about inequality, it seems, but now legislators in California are trying to actually do something about it. On April 24, they took the first committee vote on a bill, SB 1372, that would put corporate taxes on a sliding scale, from 7 percent up to 13 percent, rewarding companies who pay their CEOs more reasonable compensation packages, while charging higher rates for those who pay their CEOs exorbitantly, compared to their average workers. (Rates are 2 percent higher for financial institutions.)
The bill, co-authored by state senators Loni Hancock and Mark DeSaulnier, has already drawn the support of former Secretary of Labor Robert Reich, who spoke at a press conference [video] before the vote, saying, “I’m here to testify on behalf of this bill, because I think it begins the process of shifting incentives on corporations back toward the kinds of incentives we had 30 or 40 years ago, when CEOs were paid, on average, 30 times what the average or median worker in their corporations were paid.” Washington Post columnist Harold Meyerson chimed in and argued that “Congressional Democrats should emulate their California counterparts” with a similar proposal.
This California bill is a bipartisan effort, and well it should be. I can't imagine why we can't all agree that subsidizing record levels of corporate profits with welfare to support those on poverty-level wages is a bad thing. I can't imagine why we can't all agree that those who pay a fair days wage for a fair days work should be able to survive cut throat, amoral competition. I can't imagine why we can't agree that Main Street should have a fighting chance against the WalMarts and McDonalds of the world. SB1372 is designed to further all those aims, all while being revenue neutral.
Under SB 1372, there would be nine rates, starting with a 7 percent tax rate on companies with a CEO-to-average-worker ratio of 25 to 1 or less, all the way up to the top rate of 13 percent assessed on companies with a ratio of 400 to 1 or more. California currently has a corporate flat tax rate of 8.84 percent, except for financial institutions, which pay 2 percent more—a difference that would be carried over into the new rate structure as well. Not only does it make sense as policy, it’s politically savvy as well, since it favors the vast majority of smaller businesses, which have not seen such wild explosions of pay differentials. Not coincidentally, DeSaulnier was a small business owner himself, as well as being a union member when he was young.
This is an effort which deserves serious attention and consideration everywhere. It's time to stop incentivizing business behavior which damages the economy and this is a great stop in that direction. It also preserves the freedom of businesses to make their own decisions on compensation at all levels, from bottom to top. It just puts a cost on behavior that expands inequality...as it should since that behavior has a serious cost to America.