Report: CEOs Rewarded for Parking Profits Overseas
by Clyde Weiss | September 06, 2011
AFSCME has long denounced U.S. corporations that take jobs overseas, where they can take advantage of low wages and regulations that allow them to escape U.S. taxes to increase their profits at the expense of American taxpayers. Now we learn, in a troubling new report by the Institute for Policy Studies (IPS), that corporate CEOs are rewarded handsomely for engaging in tax-avoidance schemes.
America’s CEOs “are reaping awesomely lavish rewards for the tax dodging they have their corporations do,” says the report, Executive Excess 2011: The Massive CEO Rewards for Tax Dodging. “In fact, corporate tax dodging has gone so out of control that 25 major U.S. corporations last year paid their chief executives more than they paid Uncle Sam in federal income taxes.”
The report discloses these disturbing facts:
- “Of last year’s 100 highest-paid corporate chief executives in the United States, 25 took home more in CEO pay than their company paid in 2010 federal income taxes” (averaging $16.7 million, compared to last year’s $10.8 million average for S&P 500 CEOs,” the report noted).
- “CEOs in 22 of these 25 firms enjoyed pay increases in 2010. In 13 of these companies, CEO paychecks ratcheted up while the corporate income tax bill either declined or the size of the corporate tax refund expanded.”
At the same time the CEOs of those 25 firms got those huge paychecks, their companies also pocketed massive global profits, averaging $1.9 billion last year. General Electric was the big winner, getting a $3.3 billion tax credit despite collecting $5.1 billion in U.S. pre-tax income.
The IPS study’s authors say “CEOs and their corporations are expending considerably more energy on avoiding taxes than perhaps ever before – at a time when the federal government desperately needs more revenue to maintain basic services for the American people.”
Corporations are clearly not paying their fair share of taxes, and CEOs are getting richer than ever before as a reward for keeping those revenues overseas, where they can’t be taxed. Meanwhile, public services (and the jobs they support) are being eliminated nationwide because there is not enough revenue to pay for them.
“Over 40 percent of private-sector job gains in the current recovery have been canceled out by job losses in the public sector,” says a recent Economic Policy Institute report. We cannot let this trend continue!
Corporations that pride themselves as being American are, instead, undermining American values of fairness. If working Americans are expected to pay their fair share of taxes, corporations should do no less. That’s why we need to eliminate financial rewards for CEOs that engage in these tax avoidance schemes.
Read more about the IPS report in this story in The Nation magazine. For more about outrageous CEO compensation, click here.
