Shocker: some companies pay their CEO's more than those companies pay in tax
Although we blogged this yesterday in our Quote of the Day, we want to devote some more space to the issue.
As the IPS points out:
Corporations don't dodge taxes. The people who run corporations do. And these people — America's CEOs — are reaping awesomely lavish rewards for the tax dodging they have their corporations do.Reuters reports:
Compensation for the 25 CEOs with pay surpassing corporate taxes averaged $16.7 million, according to the study, compared to a $10.8 million average for S&P 500 CEOs. Among the companies topping the IPS list:
eBay whose CEO John Donahoe made $12.4 million, but which reported a $131 million refund on its 2010 current U.S. taxes.
- Boeing, which paid CEO Jim McNerney $13.8 million, sent in $13 million in federal income taxes, and spent $20.8 million on lobbying and campaign spending
- General Electric where CEO Jeff Immelt earned $15.2 million in 2010, while the company got a $3.3 billion federal refund and invested $41.8 million in its own lobbying and political campaigns.
Two-thirds of the firms studied kept their taxes low by utilizing offshore subsidiaries in tax havens such as Bermuda, Singapore and Luxembourg.The NY Times reports that the companies averaged $1.9 billion each in profits, but a variety of shelters, loopholes and tax reduction strategies allowed the companies to average $304 million each in tax benefits — which can be taken as a refund or used as write-off against earnings in future years.
The authors of the study, which examined the regulatory filings of the 100 companies with the best-paid chief executives, said that their findings suggested that current United States policy was rewarding tax avoidance rather than innovation.
“We have no evidence that C.E.O.’s are fashioning, with their executive leadership, more effective and efficient enterprises,” the study concluded. “On the other hand, ample evidence suggests that C.E.O.’s and their corporations are expending considerably more energy on avoiding taxes than perhaps ever before — at a time when the federal government desperately needs more revenue to maintain basic services for the American people.”
The study comes at a time when business leaders have been lobbying for a cut in corporate taxes and Congress and the Obama administration are considering an overhaul of the tax code to reduce the federal budget deficit.The article quotes Chuck Collins, senior scholar at the institute and a co-author of the report:
“Instead of sharing responsibility for addressing our nation’s fiscal challenges. corporations are rewarding C.E.O.’s for aggressive tax avoidance.”We agree. And as IPS points out - those who are behind the decisions of "the corporation" are those who benefit from the excess of privilege they derive from it, at the expense of others. If enough of us mobilise in objection, perhaps we have a chance of political will moving towards the greater good.