Tick, Tax, Toe

Equitable treatment of employees is one of the more enlightened corporate policies to which the Small Office can lay claim. The company is, for the most part, a meritocracy; you do the job well, you are rewarded. If two employees at the same level do their jobs equally well, they are rewarded equally well. Perhaps more equal than well, but that is another story.

Which brings us to J.C. He is a senior sales rep working out of our Seattle office. He is a fine employee, a salt-of-the-earth fellow with little to deride and nothing obvious to admire. He is vanilla pudding in a job where you’d prefer a bit more flavor, but that, too, is another story. The real story is that he earns, net, more than virtually all his peers.

Why? Because he lives in Seattle, Washington, and Washington does not have a state tax. It is one of seven states that levy no income tax at all. So right off the bat, J.C.’s net is considerably more than most of his peers – a whopping 9.3% more than those living in California. If one happens to work in Canada, the same salary is worth (or at least costs the company) 30% less because of currency exchange. If that Canadian employee happens to live in Quebec, an $85,000 salary is subject to provincial tax of 24%.

One could argue – and, indeed, some employees have – that the system is unfair. The Black Widow was unmoved by their arguments on the basis that apples are not oranges and Seattle is not San Jose and certainly not Quebec, not just in terms of taxes but also in terms of the cost of living and even the job market itself.

Add one cup of fresh blueberries and one teaspoon of cinnamon.

Well the story takes an odd turn – as they usually do in the Small Office. J.C. lived in Seattle and paid no taxes. When he moved to Atlanta, he realized that, after tax, he would earn 6% less. We couldn’t expect him to make a move and lose income at the same time. We eventually relented and increased his gross by just over 6%.

If you follow the Small Office long enough, you could guess what comes next. J.C. moved back to Seattle just a year later. It was clear to him that we couldn’t expect him to make a move and cut his gross salary at the same time. In making his case, he told the Black Widow that apples are not oranges and Seattle is not Atlanta, not just in terms of taxes but also in terms of the cost of living and even the job market itself. We eventually relented and so, in the space of 12 months, J.C. got for himself a raise of 6% excluding any adjustment for merit, cost of living or promotion.

He was always one step ahead of the company. Take that vanilla pudding, then add one cup of fresh blueberries and one teaspoon of ground cinnamon.