January 16th, 2008

moneybear

The Maximum Wage

Everyone knows about the minimum wage, but I wonder if there should be something like a maximum wage? Perhaps I'm just a socialist at heart, but one has to wonder how much is too much? How much does one person really need? I have no problem with capitalism, but runaway capitalism is something I detest.

I started playing around with some numbers to see what a maximum could look like. I started with a nice round number and an assumption that 28% of income would be devoted to housing. So what if you made $1000/day. That's only $365,000/year. Even if we double that to take taxes into account, it's still less than $1 million/year. So if you make $1000/day, your housing costs would be about $280/day. Heck! You could live in a luxury hotel at that rate! In terms of a traditional 30-year mortgage at current interest rates, that's about a $1.4 million house. I think you could live happily in a house like that.

That leaves $720/day for incidentals. Let's take out $50 for breakfast, $100 for lunch, and $200 for dinner. That leaves $370/day. That's pretty good for your other needs.

As I said earlier, I believe that if people work hard they should be rewarded for their efforts. If you trained you body and became a star athlete or you trained your mind and became a CEO of a major corporation, you should reap some benefits. But how much is too much? How much money does the Walton family really need that they have to treat Wal-Mart employees like shit? How much money is the CEO of Citibank worth that he can stay but 1000's of employees can be laid off because of bad management decisions? Should ball players get paid $1000/pitch while fans pay $100 for tickets?

I know people like Bill Gates donate much of their wealth to charities. That's admirable. But is he the exception and not the rule? I would say tax the heck out of all the folks making more than a million a year, but how good is our government in doing what is right or fair?

I don't know where I'm going with this. It had been bouncing around in my head lately. I'm kinda interested in what others think about this.
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