The real "trick" to keep businesses up and running and not simply drained of their value and tossed aside like an old shoe, is the high personal tax rate needs to be restored for the highest earners, back to 1949 levels. Otherwise it's just too easy for management to simply empty the treasury by paying themselves huge compensation and they do so regardless of company performance. Because with the low tax rates they are not barred from taking 100 million dollar payday's.
With a very high tax rate inplace that prevents them from just taking a huge salary they have to take stock and/or options which not be of much value if the company doesn't perform. As things stand now, if the corp is not doing well, the CEO gets the board to up managements compensation, then they simply raid the company treasury of cash. If the company hasn't much cash, no problem just take out some loans then use that money to pay themselves and let the company be damned. Can't do that if tax on draws of more than 1 million are taxed at 99%. Then the only way to get big bucks out of the corp is to make it perform better so your stock and options go up in value.
With a very high tax rate inplace that prevents them from just taking a huge salary they have to take stock and/or options which not be of much value if the company doesn't perform. As things stand now, if the corp is not doing well, the CEO gets the board to up managements compensation, then they simply raid the company treasury of cash. If the company hasn't much cash, no problem just take out some loans then use that money to pay themselves and let the company be damned. Can't do that if tax on draws of more than 1 million are taxed at 99%. Then the only way to get big bucks out of the corp is to make it perform better so your stock and options go up in value.
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