Excerpt: "Tax dollars are flowing from average Americans who depend on public services to the kingpins of America's private sector. They're subsidizing, directly and indirectly, the mega-million paychecks that go to the top executives at our nation's biggest banks and corporations."
American politics are controlled by the 1%. (photo: Winner Take All Politics)
How Our Tax Dollars Subsidize Exorbitant Executive Pay
17 August 12
ationwide, budget cuts have axed 627,000 public service jobs just since June 2009. Schools, health clinics, fire stations, parks, and recreation facilities-virtually no public service has gone unsqueezed. Tax dollars haven't seemed this scarce in generations.
Yet tens of billions of these scarce tax dollars are getting diverted. These tax dollars are flowing from average Americans who depend on public services to the kingpins of America's private sector. They're subsidizing, directly and indirectly, the mega-million paychecks that go to the top executives at our nation's biggest banks and corporations.
Exorbitant CEO pay packages have, of course, been outraging Americans for quite some time now. Every new annual CEO pay report seems to bring a rash of predictably angry editorials and calls for reform. But little overall has changed. Wages for average Americans continue to stagnate. Pay for top executives continues to soar.
One key reason why: Our nation's tax code has become a powerful enabler of bloated CEO pay. Some tax rules on the books today essentially encourage corporations to compensate their executives at unconscionably higher multiples of what their average workers are paid.
Other rules let executives who run major corporations routinely reduce their corporate tax bills. The fewer dollars these corporations pay in taxes, the more robust their eventual earnings and the higher the "performance-based" pay for the CEOs who produce them.
In effect, we're rewarding corporate executives for gaming the tax system. Our tax code is helping the CEOs of our nation's most prosperous corporations pick Uncle Sam's pocket.
In this latest Institute for Policy Studies Executive Excess annual report, our 19th consecutive, we take a close look at the most lucrative tax incentives and subsidies behind bloated CEO pay and highlight those executives who have reaped the highest rewards from tax code provisions that actively encourage outrageously disproportionate executive pay.
We also identify the top executives who have benefited the most from what have become known as "the Bush tax cuts"-the reductions in federal income tax rates on top-bracket, capital gains, and dividend income enacted in 2001 and 2003.
Among our findings:
- Of last year's 100 highest-paid U.S. corporate chief executives, 26 took home more in CEO pay than their companies paid in federal income taxes, up from the 25 we noted in last year's analysis. Seven firms made the list in both 2011 and 2010.
- The CEOs of these 26 firms received $20.4 million in average total compensation last year. That's a 23 percent increase over the average for last year's list of 2010's tax dodging executives
- The four most direct tax subsidies for excessive executive pay cost taxpayers an estimated $14.4 billion per year-$46 for every American man, woman, and child. That amount could also cover the annual cost of hiring 211,732 elementary-school teachers or creating 241,593 clean-energy jobs.
- CEOs have benefited enormously from the Bush tax cuts for upper-income taxpayers. Last year, 57 CEOs saved more than $1 million on their personal income tax bills, thanks to these Bush-era cuts.
What can be done to end today's incredibly gross pay divide between top executives and average workers? In this year's Executive Excess, we once again survey a wide range of reform notions with a "scorecard" that notes those reforms that have already been enacted, those still pending before Congress, and those proposals not yet before Congress that we believe hold the most CEO pay-deflating promise.
Read the full report: Executive Excess 2012: The CEO Hands in Uncle Sam's Pocket (PDF)
Go to the campaign page: Executive Excess 2012 Campaign
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Comments
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When it comes to Corporate interests, our conflict of interest investigators have been completely defunded making them impotent to discover what little of our conflict of interest laws remain.
This all then becomes a vicious cycle as now that corporations are writing the laws via ALEC and various industry lobbyists they can further defund the government by paying less taxes.
I am pretty sure that school principals are not making 400K or even 200K. That may be true of some large city school superintendents , but I would think that is an appropriate salary for that type of job.
But what is more disturbing in your post is your assertion that the property tax is illegal. I am pretty sure that the legality of that tax has been reaffirmed by the courts on numerous occasions. That being said, you are correct in your assessment of it being an unfair tax. It is unfair much in the way that a Sales tax is also an unfair regressive tax; which unfortunately is legal. Lastly, your topic, while important, is not really germane to the article since the property tax is one of the few that do not enrich corporations.
The answer to your question is easy. They blame the victim. The poor are poor because they refuse to look for a job. Notice the uptick in Racial messaging? It is designed to classify all welfare recipients as lazy n-words. So when the unemployment rate among blacks in America goes up, its not because of racism, nope, its their own fault for being a victim of racism.
Blaming the victim is easy and fun too! Watch as your local Right Wingers blame victims of abuse for being abused. Enjoy the hilarity that happens when a family is thrown from their home because their mortgage payments went through the roof while their income was cut in half. Its their own fault for not reading every word on the the 500 documents that banks force them to sign when they close a mortgage. So go ahead, blame the victim!
(pardon my sarcasm)
Its amazing to watch people be brainwashed in to voting against their own best interest. Poor people voting to take support away from themselves and give it to CEO's and they dont even know they are doing it. This always astounds me!
I have a brainwashed...F ox news watching friend they are on food stamps, social security for a health issue, and medicaid, and is living hand to mouth dirt poor, but votes republican. This person insists that they are informed because they watch Hannity and Bill Orally on Fox. Sometimes I just listen in shock as the lies and nonsense are spewed forth in conversation... and Im dumbfounded?
Several decades ago, Margaret Thatcher claimed: "There is no alternative". She was referring to capitalism. Today, this negative attitude still persists.
I would like to offer an alternative to capitalism for the American people to consider. Please click on the following link. It will take you to an essay titled: "Home of the Brave?" which was published by the Athenaeum Library of Philosophy:
http://evans-experientialism.freewebspace.com/steinsvold.htm
John Steinsvold
“Insanity is doing the same thing over and over and expecting a different result."~ Albert Einstein
It’s all the money that society spends for the nature it uses, for land such as parcels beneath buildings and for resources such as oil in the ground, not to mention the value of the airwaves and other natural gifts – trillions of dollars annually unduly enriching a tiny sliver. Government could redirect that spending into everyone’s pockets via a geonomic system of land dues in and “rent” dividends out. Both MLK and Tom Paine urged paying ourselves a dividend from this social surplus, our common wealth.
Once people do get their fair share of Earth’s worth, then they’ll be sufficiently endowed to afford social services of their own choosing. Politicians will lose their excuse to control the public purse. And once government shifts its revenue raising from taxing anything that moves to just using fees and dues to guide only socially-genera ted values into the public treasury -- Paine urged shifting taxes from individual efforts to a region’s land and King cited Henry George, famous for his Single Tax on land -- then politicians will lose their excuse for carving out loopholes. To make it happen, let’s think outside the box of knee-jerk taxation.
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