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View Diary: URGENT: Last chance to get a better tax cut deal (163 comments)

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  •  Good point. Deductibility is not a real issue (0+ / 0-)

    here though as taxes only account for a fairly small portion of the cost of this compensation to the company. Why do you think they wouldn't have done it if it wasn't deductible? Please note that a lot of this compensation was not salary.

    •  Deductibility of executive salaries (1+ / 0-)
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      FG the issue because shareholders do not have a real say in stopping the bleeding of the corporation through executive compensation.  And the public is paying a huge price for the decisions that such compensation plans encourage.

      I think that the more stakeholders (especially shareholders) who know about these arrangements and have a financial stake in their consequences, the more likely the infantile behavior of executives will be constrained either through the political processes of governance of the corporation or  the law.

      For folks like the Koch Brothers whose corporation is closely held, the tax will offset some of the damage that they cause.

      When an employee uses a company vehicle for personal business with the employer's permission and the employer doesn't ask for reimbursement, the employee has to pay taxes on the IRS-defined mileage amount of that benefit.  That is compensation beyond salary.

      50 states, 210 media market, 435 Congressional Districts, 3080 counties, 192,480 precincts

      by TarheelDem on Fri Dec 10, 2010 at 05:23:09 AM PST

      [ Parent ]

      •  Eh, your last point is irrelevant. Of course, (0+ / 0-)

        employees pay taxes on all compensation, salary or not. The question is whether an employee's salary is considered legitimate business expense for a company and can be deducted from company's taxes. CEOs pay taxes on their compensation as well (although it's usually structured to minimize them).
        I completely agree that shareholders should do a better job controlling executive compensation but it's not really related to the tax code.
        If you're going to separate executives from regular employees on deductibility of compensation, it will be hard to draw a line between the categories, especially in large companies. It's easier to achieve similar results in other, less controversial ways.

        •  Easy to draw the line (1+ / 0-)
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          Those who have control over their own compensation and those who don't.  Just like the standard used to be for overtime premiums.  And like that you could have a total compensation lower limit just like the upper salary limit for exempt workers and the reverse of the payroll tax income cap.  That would allow more flexible compensation for owners of real "small businesses".

          Less controversial ways is not the issue.  Anything that might limit executive pay is controversial, which is why we are in this tax cut mess to begin with.

          50 states, 210 media market, 435 Congressional Districts, 3080 counties, 192,480 precincts

          by TarheelDem on Fri Dec 10, 2010 at 11:45:00 AM PST

          [ Parent ]

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