Robert Reich explains
why we should stop subsidizing sky-high CEO pay:
Almost everyone knows CEO pay is out of control. It surged 16 percent at big companies last year, and the typical CEO raked in $15.1 million, according to The New York Times.
Meanwhile, the median wage continued to drop, adjusted for inflation.
What’s less well-known is that you and I and other taxpayers are subsidizing this sky-high executive compensation. That’s because corporations deduct it from their income taxes, causing the rest of us to pay more in taxes to make up the difference.
This tax subsidy to corporate executives from the rest of us ought to be one of the first tax expenditures to go, when and if congress turns to reforming the tax code.
We almost got there twenty years ago. When he was campaigning for the presidency, Bill Clinton promised that if elected he’d end the deductibility of executive pay in excess of $1 million.
Once in office, though, his economic advisers urged him to modify his pledge to allow corporations to deduct executive pay in excess of $1 million if the pay was linked to corporate performance—that is, to the value of the company’s shares. (I hate to sound like a told-you-so, but I was the one adviser who wanted the new president to stick to his campaign promise without creating the pay-for-performance loophole.)
Clinton agreed with the majority of his advisers, and a new provision was added to the Internal Revenue Code, Section 162(m), allowing corporations to deduct from their tax bills executive compensation in excess of $1 million, if the compensation is tied to company performance.
How has it worked out? Even Senator Charles Grassley, the ranking Republican on the Senate Finance Committee, agrees it’s been a sham […]
|
Blast from the Past. At Daily Kos on this date in 2011—MA-Sen: Elizabeth Warren considering Senate run:
Elizabeth Warren is considering a run for the U.S. Senate:
Elizabeth Warren, a Harvard Law School professor whose consumer protection work has made her a favorite among liberal activists, will spend early August assessing whether to try to unseat Senator Scott Brown, an adviser said.
Back when we started this campaign in February, a lot of people thought it was a shot in the dark. It's clearly not anymore. |
Tweet of the Day:
On today's
Kagro in the Morning show, it's a tab-clearing Friday show: that
Politico list; Snowden; the nuclear option fight, deal, and schisms in the Gop ranks; still more executive nomination threats; more McDonnell grifting; OH's delayed college tuition proposal; #GunFAIL (of a sort) at the White House; Reich on "Why We Should Stop Subsidizing Sky-High CEO Pay"; ACLU on license plate tracking, and how cheap data storage might redefine privacy; stalky Utah gun dude Clark Aposhian; Cate Long notes a conflicted
NYT Dealbook blog post on public-private partnerships
High Impact Posts. Top Comments.