dollar signs

I was in my third year as editor of The Capital Times back in 1986 when John Patrick Hunter, a legendary and revered member of our staff, walked into my office and told me he no longer wanted any raises.

Here was one of the most productive members of the staff, who was beloved by thousands of our readers and, as a result, was one of the paper's highest paid employees, proclaiming he was earning enough money.

Hunter, who passed away in 2003 at the age of 87, had just turned 70 that year and consequently had to start taking his Social Security.

"I don't need any more money," he told me. "Give whatever raise I was to get to some of the younger reporters on the staff. They need it more than I do."

I was indeed able to take Hunter's planned raise and add a few bucks to the weekly wages of some new staffers who were on the low end of the wage scale.

Hunter's unselfishness came back to me when I read David Leonhardt's column in the New York Times on Labor Day. He told the story about the late auto executive George Romney — Mitt's father — who routinely turned down annual bonuses when he was the CEO of the old American Motors, which, incidentally, was going great guns under his leadership in the first half of the 1960s.

Romney told his board that he didn't believe any executive should make more than $225,000 a year, which, Leonhardt said, translates into almost $2 million today.

Unlike today, where CEOs manipulate stock prices and engage in all kinds of accounting tricks to pad their annual bonuses, which can average $2 million a month, George Romney made about 20 times as much as the average worker at one of his AM plants. That compares to today's CEO making roughly 271 times as much as his or her average worker.

Leonhardt, however, isn't sure that the explanation for that disparity is solely due to the unselfishness of the CEOs of years ago. He notes that when George Romney eschewed his bonuses, the nation's top income tax rate was 91 percent. That was a huge disincentive for millionaires to claim more and more pay when those who reached the top bracket would wind up with just 10 percent of the largess. So they let those big bucks go to lower paid workers and stockholders instead.

As he sees it, the lowering of that top bracket through the years — it's now at just under 40 percent for the amount of income over $1 million — turned the tables. CEOs can now retain most of the money for themselves.

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In other words, it's another example of the myth that lower tax rates on the rich benefit the economy. The money doesn't go to the workers — it winds up in the hands of the top 1 percent, who are loath to share it.

Quite the opposite of what people like John Patrick Hunter had in mind.

Dave Zweifel is editor emeritus of The Capital Times. dzweifel@madison.com and on Twitter @DaveZweifel

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Dave is editor emeritus of The Capital Times.