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
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