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At many large American corporations, more money is paid to a single executive than to the U.S. Treasury:

Twenty-five of the best-paid chief executive officers in the U.S. earned more in salary and other compensation in 2010 than their companies’ federal income tax expenses as disclosed in public filings, according to a report by the Institute for Policy Studies.

The Washington-based nonprofit group’s report, released today, examined 100 publicly traded U.S. corporations with the highest-paid CEOs. It found that companies whose CEOs’ compensation exceeded reported tax expense in 2010 had average global profits of $1.9 billion.

Companies in this group, according to the report, included Cablevision Systems Corp., EBay Inc., Verizon Communications Inc. and Boeing Co. In fact, some companies that rewarded their CEOs with seven-figure compensation were getting money back from the government.

The majority of these companies use tax havens to dodge federal payments:

The institute said its findings underscore the need for an overhaul of the U.S. tax code that would reduce the number of tax strategies available to companies, especially their ability to lower tax payments by parking profits overseas.

“Tax reform has to close up some of these loopholes and the offshore system,” Chuck Collins, one of the report’s authors, said in an interview. “We might be able to lower the overall corporate rate by broadening the base.”

Eighteen of the 25 companies mentioned in the report operated subsidiaries in countries known as offshore tax havens, Collins said.

The tax rate was actually less than zero at General Electric, Bank of America, Prudential, Bank of New York Mellon, and Verizon.

Saudi princes have no less accountability than corporate boards, which nominate their own members.  Even investors are not allowed to put nominees on the board's ballot.  The SEC rolled over and played dead when challenged on a shareholder access rule by the Business Roundtable, a CEO lobbying arm.

The United States itself is the biggest tax haven in the world, with executives extracting bonuses at the expense of a population working at record productivity.  CEO's are making 400 times the salary of the average worker, while squabbling over slave-level wages:

Chart source: AFL-CIO

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Comment Preferences

  •  Tip Jar (7+ / 0-)

    What we are seeing today is not an aberration; the aberration is only that we are seeing it, and what we are seeing is still not most of it.

    by The Anomaly on Sun Sep 11, 2011 at 03:52:19 PM PDT

  •  That article on News Corp was retracted. (1+ / 0-)
    Recommended by:

    They didn't get $5 billion in refunds; that's what they paid.  The journalist got it backwards and retracted the article.

    •  News Corp has dodged $21B in taxes (0+ / 0-)

      according to The SMH:

      The court heard that News structured the transfer to avoid triggering a tax bill of almost $21 billion on capital gains it made in Australia, the US and Britain. The Tax Office said the scheme consisted of a circular series of steps which occurred on the same day - June 8, 2005.

      It began with the off-market share buy-back of shares in one News Australia subsidiary, paid for with a $39 billion promissory note, and ended several steps later with the sale of the same shares later that day, generating a $4 billion loss which was reduced to $1.5 billion. ''The share buy-back step itself makes no sense'' unless it was done for tax avoidance, the Tax Office said.

      What we are seeing today is not an aberration; the aberration is only that we are seeing it, and what we are seeing is still not most of it.

      by The Anomaly on Sun Sep 11, 2011 at 04:58:24 PM PDT

      [ Parent ]

      •  Corporate tax is a mess; just wanted to (1+ / 0-)
        Recommended by:

        point out that one story.

        Note, though, that News Corp's restructuring you reference was upheld as legit by the Australian tax board.

      •  The Anomaly - a lot is apples and oranges (1+ / 0-)
        Recommended by:
        johnny wurster

        There is a useful political point here regarding executive compensation, but this is comparing apples and oranges. The only thing we know about the numbers shown in the annual proxy of public companies regarding executive compensation is that they are wrong. In many cases the overwhelming majority of the amount is the calculated present value of stock options that will vest in the future. If the stock price of the corporation declines, or if the executive leaves the company, the options will be worth nothing. I have always thought there should be two tables, the current one and the other that counts only cash.

        The other issue is that, based on 10K data it is often difficult to determine how much companies pay, or accrue, for US taxes. The US is one of a very few countries that tries to tax non-domestic income. There are also significant carry back and carry forward section of the US corporate code which allows for selective use of numbers for authors trying to make a political statement. This is the case for companies like GE and Bank of America which had huge losses a few years ago and have big tax loss carry forwards that are sheltering current income.

        "let's talk about that"

        by VClib on Sun Sep 11, 2011 at 05:46:00 PM PDT

        [ Parent ]

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