Barone on Taxes

Well written piece. I would just add the following comment…

If you go back to the 1970s, when the top rates were 50 percent on salary income and 70 percent on investment income, you’ll find that a lot of high earners were getting company cars, company payment of country club dues, and big expense accounts.

The reason: They didn’t have to declare those things as income and pay taxes on them. But when rates went down, there was no demand for company-paid perks anymore.

The employer calculates which compensation delivers the most to employees. When taxes are high, non-cash benefits deliver more benefit than higher pay.

Here.

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