Re:Reed Hastings: Please Raise My Taxes
by anamax on Friday February 06, 2009 @05:20PM
(#470478)
I'm surprised that Hastings didn't mention that there's already a "luxury tax" on CEO salaries over $1M.
Ordinarily, salary is a deductible biz expense. However, there's a cap - if Netflix wants to pay Hastings $2M/year, it can only deduct the first $1M.
This cap doesn't apply to performance-based pay or options.
Curiously, options and the like for CEOs and so on didn't become popular until that cap was imposed.
Oh, and he's wrong about tax rates. CA's top rate is over 9% (it hits that at around $50k) and the fed top rate is almost 40% and there's a phase out of deductibility of state taxes. If he's paying around 30%, he's not working for salary.
Ordinarily, salary is a deductible biz expense. However, there's a cap - if Netflix wants to pay Hastings $2M/year, it can only deduct the first $1M.
This cap doesn't apply to performance-based pay or options.
Curiously, options and the like for CEOs and so on didn't become popular until that cap was imposed.
Oh, and he's wrong about tax rates. CA's top rate is over 9% (it hits that at around $50k) and the fed top rate is almost 40% and there's a phase out of deductibility of state taxes. If he's paying around 30%, he's not working for salary.