Revolving Door Surtax For Government Officials Who Parlay Their Time In Government Into Outrageous Bucks
Glenn Harlan Reynolds is exactly right about officials who work in government and then leave and cash in big. He writes at USA Today:
A few weeks back, I wrote here about taxing the revolving door that takes people back and forth between the federal government and the various industries that federal government agencies regulate. My proposal was to put a surtax -- 50%, say, or maybe 75% -- on the post-government earnings of federal officials in excess of their government salaries for the first five years: Leave a federal job paying $100,000 a year for an industry job paying $600,000 a year, and you'd pay a $250,000 surtax. After all, with folks leaving the Obama administration, as they left previous administrations, for salaries several times what they earned in the public sector, and with excessive entanglement between government and business a growing problem, why not use the power of the IRS to modify behavior?I didn't think my proposal would go very far, but maybe I was too pessimistic. It seems that people are noticing and approving.
Not long after my column ran, it got an endorsement from Boston Herald, which noted: "In his 2008 campaign, President Obama promised to 'close the revolving door.' It's still open." And spinning more furiously than ever."
...The revolving door is just one symptom of a bigger picture: Whatever claims our political class makes about the general welfare, it is really running things mostly for its own benefit. That's why comparisons to theHunger Games, where the fat-cats in the Capital City live it up while the provinces starve, keep coming. Addressing the revolving door problem won't solve things, either, but it might help. And since it's getting more attention, perhaps I should flesh this idea out a bit more.
First, I'd apply it only to political appointees in the executive branch, at least to begin with. I'd be thrilled to apply it to congressional staffers -- and to members of Congress -- as well, but I think that such a bill would face too much opposition in, well, Congress to make it through. But if executive officials are subject to this sort of law, the pressure will grow to extend it the legislative branch as well. (And I wouldn't apply it to people who aren't political appointees because it seems unfair to slap a surtax on someone who finishes his hitch in the Marines and joins a private-security company).
What about an ambulance chasing lawyer that leaves the White House. He gets the magical case that is a $3M and his contingency fee is 1/3 or $1M? It is a one time case. Has nothing to do with politics or the political apparatus.
Same with a surgeon. Or the contractor who is hired to build the Trump Tower V in two months for a ridiculous amount of money?
Just throwing out thoughts.
Jim P. at March 23, 2014 5:40 AM
The only thing such a tax would do would be to raise their "earnings" after office.
While their take-home amount would be the same, the amount they would charge for speaking engagements, salaries for working for lobby groups, etc. would simply increase to cover the cost of that additional tax.
And just who does Reynolds think, ultimately, pays that tax?
We do. We would see fees at universities raised to cover those extra expenses to pay for the "privilege" of hearing them speak. We would be paying more for consumer goods, insurance, etc. as companies would need to pay more for lobby efforts aimed at Washington.
IMHO, Reynolds is only fooling himself if he thinks this will stop the revolving door. The political class has always found ways to keep themselves above us and they will continue to do so. And they usually find a way to do so with us footing the bill.
You cannot even outlaw this, as they will find ways around it by being "consultants" or something.
Nope, the only way to end it is to have an informed, paying-attention, voting public. And that will happen when pigs fly.
Charles at March 23, 2014 7:10 AM
That's a problem with wonks, always thinking about new taxes.
His idea sounds more like a commission paid back to the league once a player hits free agency. I'll bet there's a market there. I bet it can be done with employment contract law when they go into the 'D' league of govt. service.
Canvasback at March 23, 2014 7:48 AM
That seems surprising coming from Reynolds.
Isn't my choice of work part of my freedom of speech in much the same way that my spending my dollars on my election campaign is part of my freedom of speech or that spending my marketing budget on election campaigns is part of my freedom of speech?
jerry at March 23, 2014 11:53 AM
Amy Alkon
https://www.advicegoddess.com/archives/2014/03/revolving-door.html#comment-4421458">comment from jerryPeople in government, in high-placed positions, are not making vast sums of money afterward based on their good looks and valuable qualities but on value that is only from the who you know/who you can score favors/no bid contracts from based in their time in government.
Amy Alkon
at March 23, 2014 2:30 PM
" value that is only from the who you know/who you can score favors/no bid contracts from based in their time in government. "
Unfortunately, it is often more deferred payment for writing certain regulations or giving contracts while still in office.
Joe J at March 23, 2014 6:58 PM
Isn't my choice of work part of my freedom of speech
No.
Besides, many of these people rail against the 1% for not paying enough taxes.
Physicians, heal thyselves!
I R A Darth Aggie at March 24, 2014 6:09 AM
I'd be OK with it if it was extended to people who work in policy or communcations positions with the government and then go to work as journalists covering the government.
Cousin Dave at March 24, 2014 8:01 AM
Leave a comment