U.S. Tax Code Encourages Excess CEO Pay

[tay]

As a result of these incentives in the tax code, 26 out of the 100 highest paid CEOs received more in overall pay than their companies paid in federal income taxes (and many of those corporations actually received tax refunds). With few exceptions, these were profitable companies.


Simply by declaring that its pay to the CEO is for his or her performance, a corporation can write off on its taxes any amount, not just up to the limit of $1 million for standard compensation. Taxpayers also effectively pay for other incentives to high CEO pay--unlimited deferred compensation, double standards on accounting for stock options, and preferential treatment for "carried interest" in hedge, private equity and other investment funds (where payments that should be taxed like regular income are instead taxed at a much lower rate).

These same CEOs are the major beneficiaries of the Bush-era tax cuts, and would be as well under Romney's proposals. The Bush-era cuts saved James Mulva, CEO of ConocoPhillips, as much as $8.7 million last year on his taxable income of $146 million.

In its 19th annual report on "Executive Excess," the Institute for Policy Studies, a Washington-based think tank, focused on how U.S. tax laws encourage exorbitant executive pay and then grant tax breaks and reduced rates to those same executives as well as their businesses. For example, last year Apple paid a record $374 million to Timothy Cook, its new CEO, at a time when journalists were reporting on how Apple contract manufacturers in China overworked, abused and underpaid workers making iPhones.


U.S. Tax Code Encourages Excess CEO Pay - Working In These Times

 

[Liberalman]

Top heavy means money heavy

 

[damngrumpy]

But we shouldn't expect these people to pay their share it would be a hardship
after all. Give me a break. These people have been over paid for years at the
expense of consumers. I don't mind paying money for research and development.
I don't mind paying exploration costs and some money for risk compensation.
Be damned if I am ready to pay for some clown to get out of paying over eight
million of his tax share.
Ever gone to the bar and one guy usually one who can afford it goes to the
washroom when its his turn to buy a round? These guys are all going to the
washroom when its their turn to pay.
I don't think they should extend the Bush tax cuts period and the rich and powerful
need to pay up.

 

[Liberalman]

But we shouldn't expect these people to pay their share it would be a hardship
after all. Give me a break. These people have been over paid for years at the
expense of consumers. I don't mind paying money for research and development.
I don't mind paying exploration costs and some money for risk compensation.
Be damned if I am ready to pay for some clown to get out of paying over eight
million of his tax share.
Ever gone to the bar and one guy usually one who can afford it goes to the
washroom when its his turn to buy a round? These guys are all going to the
washroom when its their turn to pay.
I don't think they should extend the Bush tax cuts period and the rich and powerful
need to pay up.

These people are not overpaid they get pennies on the dollars but they get paid for all products sold. They make the jobs for other people the higher the quality the more the consumer pays. If the consumer wants to buy cheap products they can but they will buy more which ends up being the same price. The government gives incentives to these companies by offering them tax breaks and the cycle continues. Take the tax breaks away from the companies then they will re-locate and the have provinces or states slips into a have not category. In Canada the NDP believes in no tax breaks and their provinces they lead suffered for years like Saskatchewan that is only now turning around since the people dumped the NDP.