Comment Re:California (Score 1) 37
Although some mandatory proportional income taxes (like social security withholdings from paychecks) are unavoidable in and of themselves,
Up to a point. A person earning $10 million p.a. pays no more to social security than someone who only earns $168k p.a.
A person earning $10MM on standard payroll would be subjected to these payroll taxes. THIS distinction is the whole point -- Should a worker (or CEO) take in only a $1 Salary, then they are subject to those payroll withholdings/burdens on that standard payroll amount.
Money-savvy executives gladly accept a $1 salary because the remainder of their overall compensation package is awarded as semi-regulated financial instruments potentially subject to capital gains taxes, or awarded in any other manner which sidesteps traditional/standard payroll systems.
The net result? The executive's $1 salary means they are paying less in taxes than the $30K laborer employed by the same company.
If any high-income earners are literally making their earnings strictly through standard payroll, then I would question the finance management savvy of that company's CFO! That's a LOT of liquidity walking out the door on an annual basis independent of the company's revenues. (Bonuses are not salaries or wages, so they don't compute the same way for either the employer or the employee.)