May 19, 2013
Subsidizing the CEOs
Posted on Aug 16, 2012
Twenty-six of the nation’s largest corporations paid their CEOs more than they spent on taxes in 2011, according to a report by the Institute for Policy Studies.
“Our nation’s tax code has become a powerful enabler of bloated CEO pay,” says the report, which documents how American tax dollars have been diverted from public services to the accounts of executives at the nation’s biggest banks and corporations.
Americans are subsidizing CEO paychecks at a time when budget cuts have cost people 627,000 public service jobs since June 2009.
Josh Harkinson at Mother Jones explains some of how it’s done. First, there is no limit on the amount of executive compensation corporations can deduct from their taxable income as an expense. Second, there is similarly no limit on how much of their income CEOs can legally shield from taxes. Third, executives who get paid in stock rather than salary can pay taxes on a 15 percent capital gains rate rather than the 35 percent that applies to standard income. And finally, corporations can make additional money on stocks by delaying deductions taken from executive stock options until after their value has swelled.
Those loopholes amount to $14 billion a year in costs to Uncle Sam.
See some of the Institute for Policy Studies’ key findings below, then read the full report here.
—Posted by Alexander Reed Kelly.
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