Quote:
Originally Posted by Tidybuoy
However, if I had a say in things, I would cap the payroll deduction on income taxes to no more than $100,000 per any individual employee. I do not think that the government (us) should be subsidizing million dollar salaries.
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You surely realize that what employers deduct in taxable compensation, the recipients are taxed on that compensation, right? This is an illustration of a broad concept know as the "tax benefit rule" in play. One taxpayer's deduction is another taxpayer's income, and vice versa. The effective rate of taxation on the multi-million dollar executive's W-2 income is currently higher than the Corporate rate, so this trade should work to the benefit of the Govt.