Deferred Compensation is Unearned and Acquired Wealth is Earned

I don’t believe the premise advanced by that title, but its a notion that struck me in part based on a couple of posts I saw today by Jon Easter and Abdul today in the context of the gubernatorial campaign. Abdul’s was painting Gregg’s health benefit from his days as a state legislator in a negative light and Jon’s was suggesting that Pence’s compensation as a federal legislator was too high in light of his accomplishments. Neither really advanced or negated the premise of this post, but I wanted to mention them because that’s the context in which I had the thought.

In political discussions, my sense is that the starting point is that if you have acquired wealth, then the assumption is that you have earned it and that if you have deferred your compensation in exchange for ongoing benefits (health care, pension, etc.) then there is something of a rebuttable presumption that it’s just free stuff you are getting because of corruption or something. So, we see people supporting the idea of cutting pensions because they’re too expensive — largely ignoring the idea that this amounts to theft of services. Meanwhile, when you tax wealth, the presumption is that the wealth was earned. Given these presumptions, I’d guess that your average voter is going to react more negatively to Gregg’s compensation with healthcare benefits years after the fact than to Pence’s compensation in cash at the time he was a legislator.

Neither ought to be a huge factor in  a voter’s decision — the voter should be deciding which person would do a better job governing the state. But, when we’re looking at the two kinds of compensation, the real question ought to be whether the men earned the compensation. The form and the timing (now and in cash versus later in the form of a health care benefit) shouldn’t matter. But the form and the timing, I think, makes the average voter more forgiving of an overpayment if it’s made now & in cash than an overpayment made in the form of deferred health care benefits.

I have some thoughts on why that might be, but none of them terribly well defined. The first is just temporal proximity. Maybe they think on some level that, because the person was willing to defer the compensation, they actually would have been willing to do the work for only the compensation they received at the time. So, the amount that was deferred is just gravy — in excess of what the work was worth. The second is maybe a class thing. The types of jobs with deferred compensation are in the same neighborhood as the jobs done by the average voter (e.g. teacher, police officer), and they have an easier time comparing (and criticizing) what they make and the job they do as compared to the deferred compensation job. Arguably excess immediate compensation jobs are maybe more often on a much different level than the average voter (CEO, maybe) and so don’t invite the same kinds of negative comparisons. (But, like I said, these are more or less half-formed thoughts.)