I recently read about a proposal in dreary coffee-loving Seattle to levy a ten cent tax on all espresso drinks, with proceeds going to valuable head start programs for underprivileged kids.
At first I thought, well, this is a smart and worthwhile idea! Helping kids at a young age offers bountiful returns for all us in the form of lower crime, a more productive workforce… not to mention, of course, just the good karma of doing the right thing for kids!
But then I began thinking a bit deeper about this espresso tax and realized that it was actually pretty odious.
Beyond the obvious stories of Enron and Worldcom, we still have incompetent and ammoral CEOs making tens of MILLIONS of dollars a year… and for what? Leading companies to greatness? Usually the opposite. Helping society? Not directly, if at all.
But beyond the pure “are they worth it?” question or even “do they deserve it?” exploration, there lies a more profound issue. Does anyone really BENEFIT from salaries in the obscene $100-million range?
After, say, $5 million a year, are the lives of these folks measurably improved? Are they made ten times happier when they make $50 million instead of $5 million?
Imagine what good in the world would transpire if CEOs’ $100 million dollar compensation packages were distributed amongst 1,000 commonfolk.
Certainly, one might argue, this becomes a slippery slope into communism. And despite not being particularly fond of the concept of communism (in practice or in theory), I don’t deny that there are aspects of my argument that are indeed grounded in communism.
But from a purely logical standpoint, let’s examine the purpose of compensation:
1) To incent work
2) To incent excellence in work
3) To provide for necessities and enjoyment
And under this structure, let’s look at a typical CEO making $100 million nowadays.
Would this person work if he (and yes, it’s usually a man) were granted $1 million a year instead of $100 million, or would he (all other factors being equal) decide to panhandle on the street or live a hermit-life in the forest? I’m guessing he’d still be incented to work.
Would this person offer just as much excellence in his work with $1 million instead of $100 million? Considering the lackluster performances of today’s grossly overpaid CEOs, I’d suggest that there might actually be an improvement in performance AND attitude. And from a different perspective, can anyone argue with a straight face that any significant portion of society would take fewer risks or be spurred to create less if offered impressive rather than obscenely huge rewards? Would (good) artists refuse to compose music or create paintings? Most likely, if the distribution of wealth were more sensible and equitable (e.g., fewer mega-rich stars, but also fewer starving artists), then MORE artists or inventors would be incented to invest time and energy in their fields.
Would this person still be able to live comfortably on $1 million a year? You bet your sweet bippy they could.
Returning again to the concept of incremental good or happiness… isn’t it clear that our society would be better served by having fewer multi-millionaires and more people earning $100,000 a year instead?
Can you imagined the increased output in creativity, productivity, and invention?
And — returning to the original issue of the 10 cent espresso tax — doesn’t it seem more likely that we’d be able to stop nickel-and-diming the “rich” folks who are grabbing the occasional espresso, and instead, have enough money inherently within our society to reasonably support every man, woman, and child?
In survey after survey, America ranks lower than a great many European countries in quality of life, overall happiness, and so on. Is it, perhaps, no coincidence that these other countries have demonstrably less poverty and fewer obscenely rich folks than we have?
Is the American Dream really about becoming a billionaire? And if so, is this something we should be proud of?
In the meantime, sure, tax espressos 10 cents each to raise $35 million for poor kids. But do take a moment to ponder why our society needs to continually beg for cash, one bond or ten cents at a time.
Added on September 17, 2003: The espresso tax was voted down today.