1:12 will it destroy swiss economy?

[Sherman Bay]

If you look at this through Ayn Rand glasses, the top minds, wage earners, companies and investors will be leaving the country; parts of the economy will move underground; and schemes to avoid this will be hatched.

It will encourage citizens to disrespect the law, government, and each other.

That can't be good.

 

[Ladewig]

If you look at this through Ayn Rand glasses, the top minds, wage earners, companies and investors will be leaving the country; parts of the economy will move underground; and schemes to avoid this will be hatched.

It will encourage citizens to disrespect the law, government, and each other.

That can't be good.

I've worked in Switzerland for only two weeks, but my impression was that it would take a force majeure to get the Swiss to disrespect their laws.

 

[Muldur]

I presume that to get around the law, organisations will fragment so that the person who cleans the toilet is employed by one company with a wage structure running from, say, 20,000 Francs to 240,000 Francs whereas the investment bankers work for a firm where the payscale runs from 1,000,000 to 12,000,000 Francs.

If the top guy in the first company isn't earning enough he'll be given an additional job for another firm.

Then you amend the law to forbid that practice and put strong enforcement in place to catch the cheaters.

I like this law's concept. It should be world-wide. Then the "we're leaving" BS would stop.

 

[Muldur]

If you look at this through Ayn Rand glasses, the top minds, wage earners, companies and investors will be leaving the country; parts of the economy will move underground; and schemes to avoid this will be hatched.

It will encourage citizens to disrespect the law, government, and each other.

That can't be good.

By that logic, NO laws should be passed, as some people will be "tempted to avoid them", and "encourage disrespect for the law".

The key is strong enforcement and making a very public and painful example out of the lawbreakers.

 

[TubbaBlubba]

Somebody, somewhere, is a lot wealthier than I am. This has to stop.

I don't really get what laws like this are supposed to achieve. What's going to happen with the surplus, exactly? Is it going to be redistributed? Hardly. It'll probably turn into dividends, maybe a few cents for each stockholder.

I also don't think it will help "wealth inequality", because very little inequality happens due to salaries >12x some low wage. There's a lot of room in there, and then there's capital gains...

 

[The Don]

Then you amend the law to forbid that practice and put strong enforcement in place to catch the cheaters.

IMO such a law would be impossible to implement unless you set an absolute maximum on income that any one person can have rather than basing it on minimum salary in an individual company.

I like this law's concept. It should be world-wide. Then the "we're leaving" BS would stop.

Won't work, living costs vary tremendously worldwide.

 

[timhau]

IMO such a law would be impossible to implement unless you set an absolute maximum on income that any one person can have rather than basing it on minimum salary in an individual company.

Don't give him any ideas.

 

[The Don]

Don't give him any ideas.

At one point in time didn't Norway have a marginal tax rate of more than 100% ?

In the UK the marginal tax rate topped out 98% (though other figures say 136%) in the 1960s.

Such marginal tax rates effectively put a cap on earnings (so long as the taxes are paid) but of course there's a lit of tax avoidance or evasion.

 

[timhau]

At one point in time didn't Norway have a marginal tax rate of more than 100% ?

Don't know about Norway, but there was a rather famous example of it in Sweden.

 

[Muldur]

Yep. Mexico at one point had a law that 10% of profits had to be shared with the employees.* Thus any company in Mexico with employees was not profitable, but the parent company without employees always seemed to do fine. Nice idea, just no real way to make it work.

That's why you word the law to forbid such "shells". It's not rocket science.

 

[theprestige]

That's why you word the law to forbid such "shells". It's not rocket science.

I think the word you're looking for is "legal expertise".

Also, successfully implementing public policy in the form of complex legal constructs is probably not as easy as you seem to think.

 

[Muldur]

IMO such a law would be impossible to implement unless you set an absolute maximum on income that any one person can have rather than basing it on minimum salary in an individual company.

An explorable alternative.

Won't work, living costs vary tremendously worldwide.

Then index it by CoL in the particular region. Set it in terms of the lower wage, whatever it is in that area. So if it costs $5/hour to live a sufficient life in one region than the max in that region is (to use the example) $60/hour.

If in another region it is $10/hour, then the max is $120.

Simple.

 

[Muldur]

I think the word you're looking for is "legal expertise".

Also, successfully implementing public policy in the form of complex legal constructs is probably not as easy as you seem to think.

It is once you reintroduce common sense into the legal system and stop the lawyer-ization of legislation.

What is the clearly expressed intent of Law X?

Is the person/business in question in compliance with that intent? Not some tricky legal parsing of words, but the clear intent.

 

[Sherman Bay]

By that logic, NO laws should be passed, as some people will be "tempted to avoid them", and "encourage disrespect for the law".

Not at all. Laws that best fall into that category are ones that are highly unpopular, very heavy-handed, and easily circumvented.

 

[Dr. Keith]

That's why you word the law to forbid such "shells". It's not rocket science.

That you have no understanding of corporate structures is not your fault, but what you are essentially saying is that there should be no international companies.

An explorable alternative.



Then index it by CoL in the particular region. Set it in terms of the lower wage, whatever it is in that area. So if it costs $5/hour to live a sufficient life in one region than the max in that region is (to use the example) $60/hour.

If in another region it is $10/hour, then the max is $120.

Simple.

Is this salary alone or does it also restrain what a contractor can charge his clients for contract labor. For instance, would a professional firm be able to bill their clients more than $120/hr? If so, could an individual contractor bill more than $120/hr?

 

[Muldur]

That you have no understanding of corporate structures is not your fault, but what you are essentially saying is that there should be no international companies.

I understand it quite well, and yes, I abhor international companies. They are deliberately engineered to place themselves in whole or in part outside the reach of sovereign national laws. NO corporation should be beyond the law of the nation it inhabits.

Is this salary alone or does it also restrain what a contractor can charge his clients for contract labor. For instance, would a professional firm be able to bill their clients more than $120/hr? If so, could an individual contractor bill more than $120/hr?

How many man-hours will the contract take? Multiply that by the permitted amount and there's your answer. It's not nuclear physics-level math...

 

[theprestige]

I understand it quite well, and yes, I abhor international companies. They are deliberately engineered to place themselves in whole or in part outside the reach of sovereign national laws. NO corporation should be beyond the law of the nation it inhabits.



How many man-hours will the contract take? Multiply that by the permitted amount and there's your answer. It's not nuclear physics-level math...

Funny that you should mention nuclear physics... People who can perform nuclear reactor maintenance are extremely rare, and their skills are extremely valuable. Why shouldn't they be able to charge whatever the market will bear, to descend into reactor cooling tanks and perform difficult and demanding work that few people will do, and even few can?

Do you really think their wages should be capped at 12x the wage of the lowliest file clerk or summer intern at the power company?

 

[Dr. Keith]

Do you really think their wages should be capped at 12x the wage of the lowliest file clerk or summer intern at the power company?

Yes, yes he does. It makes no sense whatsoever, and I am a person who abhors the high level of income inequality in the states. This approach just makes no sense.

 

[Puppycow]

I honestly don't know what effect this will have on the economy.

I can imagine it having a serious impact if too many companies make good on threats to leave. But I can also imagine that companies, when faced with a real-world decision, would decide that it doesn't make enough business sense.

 

[DC]

well one of the companies that said they would leave Switzerland was in the news again, turns out they didn't pay taxes in 2011 nor in 2012..... also they almost have no emplyees here in Switzerland, then they are also in troubles for corruption and human right violation, pollution etc etc.
lol i hope they leave Switzerland tomorow. i am almost thinking of voting yes just to increase the chance that they leave.
they are only here in Switzerland because they are too greedy to pay taxes.
http://en.wikipedia.org/wiki/Glencore_Xstrata