With all the outrage about bonuses, we thought we should examine the subject further. What is fair?

Are banker bonuses unfair if they are paid as a result of strong performance? We don’t think so. Especially if the shareholders are compensated equally. They seem extremely unfair if they are paid out regardless of performance. The system we have, like it or not, rewards people for exceptional performance. Is it fair that OPRAH, Tiger Woods, George Soros, Madonna, Derek Jeter, Steven Spielberg, Britney Spears, Conan O’Brien, Jay-Z, Alex Rodriguez, Ben Stiller, Rush Limbaugh,etc  earn millions per month? Is it fair that the top 40 Hollywood earners (combined earned over $ 1.3 Billion in 2009) are paid so much for making movies even if they are bad? (Sometimes bad movies make big dollars!) Is it fair that sports figures earn millions even if they don’t perform well?

Lets remember where the money goes: big earners pay BIG taxes. They spend big and pay even more taxes when they spend in sales taxes. They own large, expensive properties (and pay LOTS of real estate taxes and hire LOTS of people to maintain and improve these properties). They also buy and sell lots of property, thus generating transfer taxes with each transaction. When they die, they have to pay more taxes…estate taxes. Yes, they have sophisticated accountants to create fancy loopholes (more jobs), but often the savings are held in trusts that generate income to heirs (who also spend lots, thereby generating tax dollars and jobs).

Should they pay more taxes? We suspect that if taxes are raised, so too will incomes, possibly at the expense of jobs. Worse, when rich people want more money, they usually charge more for their products, which is a form of taxing the little people who buy them. Example: If AVATAR’S Mr. Cameron has his taxes raised by 10%, what will stop him from charging an extra 50c at the movie theater? That’s a disguised tax on the masses, no?

What do you think?