Netflix CEO to Obama: Please Raise My Taxes

hastings-shotIn an Op-Ed piece in the New York Times today, Chief Executive Reed Hastings (pictured) recommends raising the tax rate for those with incomes over $1 million, allowing the government to keep half. There’s method to his madness. It’s his way of protesting the idea of capping pay for executives at public companies. Allowing executives to make eye-popping compensation would be a way of collectively celebrating their economic success.

“Then, the next time a chief executive earns an eye-popping amount of money, we can cheer that half of it is going to pay for our soldiers, schools and security. Higher taxes on huge pay days can finance opportunity for the next generation of Americans.”

50 percent sound draconian? Here’s a question:  what was the average tax rate paid by those in the highest bracket in the thirty years following World War II?Answer: 82.8 percent, according to figures found on the National Taxpayers Union Web site. OK, there are several footnotes involved, but even accounting for all of them, the figure is still well north of 50 percent.

It’s hard to imagine how folks stayed motivated during that time, isn’t it?

Give Hastings credit for being in the forefront of other issues. His company, Netflix, started accounting for stock compensation on its balance sheet years before it became mandatory.

And there wasn’t a whiff of backdating scandal at Netflix because it long ago adopted a policy of periodically granting stock options on a monthly basis, essentially making the issue of timing grants moot.

 

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  • Kimberly

    If Chief Executive Reed Hastings would like to give more to the government then there is a form that allows him to do just that. Let him put HIS money where his mouth is.

  • Alex

    There were a lot more ways to exempt or exclude income from your taxable income when the highest marginal rate was 82.8%. Although the marginal rate is lower, the entire tax base is much larger, so the amount of total revenue has remained relatively constant. Any comparison between the two highest marginal rates is shaky at best. Perhaps reading footnotes should enter your repertoire in the future

 
 
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