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Technology Stocks : Cisco Systems, Inc. (CSCO)
CSCO 82.36+1.5%Feb 5 3:59 PM EST
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To: The Phoenix who wrote (41178)10/20/2000 11:13:34 AM
From: aladin  Read Replies (3) of 77400
 
Gary,

I exercised some shares back in March and my effective tax rate was ~49% at a payroll level.

Taxes are paid by cisco through employees like myself.

Now if we gave up options and increased pay to make up for this - the pay would be a deductible expense for the company and they would still pay no taxes (assuming compensation was equivalent).

Or could it be that Parish is saying we pay too much? Does he want less compensation so that we pay corporate tax? Even though this means there will be less collected in payroll taxes? Or does he simply want double taxation?

I have never understood that kind of thinking...

Corporate income taxes go to Federal and State coffers only. Payroll taxes have higher marginal rates and also fund Medicare and Social Security.

High pay, direct or through options, attracts talented people and that ensures success. Options are attractive because they are essentially worthless unless the entire team of employees work hard and effectively.

I suspect Bill is a socialist and would also oppose bonus plans using performance incentives (used by a lot of companies for similar effect before options became popular). One of those 'lets bring everyone down to our level' kind of guys.

John
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