I have mixed feelings about a Maryland Senate bill aimed at taxing excessive executive pay. As a progressive, I do find most executive bonuses to be excessive, and I agree that something should be done to curb them. But I also fear that this bill will hurt Maryland's economic interests because it is a state based bill.
Senator Paul G. Pinsky weighs in on the necessity of the bill:
“At the end of the day, they have to pay taxes on their profits. There are no limits on their ability to write off compensation packages. So if one company has an executive who’s paid $300,000, and another $15 million, that $15 million is considered a legitimate business expense, and I think it’s not,” Pinsky said. “When you get a corporate write-off for that, it transfers the tax burden to middle- and working-class people. I think we’re losing money.”I am inclined to agree, these bonuses should not be tax deductible. In fact, I am inclined to agree with the whole bill and its proposed implementation. My problem is, if CEO's only have the follow the rules in Maryland, what will stop them from picking up shop and heading out of state? Not too much.
A bill like this needs to be passed nationally, and unlike some other issues, where it is beneficial for states to take the lead, that seems not to be the case here. Maryland should not handicap itself with the good-intentioned, economically populist legislation until we are sure that it will not adversely harm our working class population with loss of jobs or revenue. Otherwise, we could be placing ourselves at a serious economic disadvantage in the future.