26 U.S. companies pay more to CEO than in taxes
laker1963
Everyone, Registered Users Posts: 5,046
Twenty-six big U.S. companies paid their CEOs more last year than they paid the federal government in tax, according to a study released Thursday by a liberal-leaning think-tank.
The study, by the Institute for Policy Studies, said the companies, including AT&T, Boeing and Citigroup, paid their CEOs an average of $20.4 million last year while paying little or no federal tax on ample profits, according to regulatory filings.
On average, the 26 companies generated net income of more than $1 billion in the U.S., the study said.
The study blasted tax rules allowing unlimited deductions for CEO "performance-based" pay, like many stock options. It said the five biggest performance payers among the 26 companies took $232 million of these deductions last year.
Among the "kingpins" it criticized was CEO James McNerney Jr. of Boeing. It said he got $18.4 million in pay last year while his company received a tax refund of $605 million.
The study also laid into Citigroup for paying CEO Vikram Pandit $14.9 million while the bank received a net $144 million in tax benefits.
Eighteen of the 26 companies received cash back or credits to apply against tax in the future, according to the report.
The study, a 45-page attack on the corporate tax code, said deductions and credits are allowing companies to lavish big pay packages on executives so they can cut their tax bills while Washington gets less money in a time of trillion-plus deficits.
"Our nation's tax code has become a powerful enabler of bloated CEO pay," the study said.
To calculate tax, the study used companies' own math based on accounting rules. Regulators require companies to estimate their tax bill and disclose it in public documents for investors.
The tax filings the companies make to the government, typically in September, are private and can differ from the estimate.
Another problem is that the study doesn't count tax the company plans to pay but has deferred to future years. The authors argue that deferred tax can be put off indefinitely.
Charles Bickers, a Boeing spokesman, said that the company's federal tax bill, including deferred tax, was $1.3 billion last year, not a net credit, as the think-tank 's study found.
Boeing did lower its tax, in part by using a popular tax credit encouraging companies to spend more on research and development. Bickers said that helped the company hire 11,000 people in the U.S. last year.
"Boeing supports a simpler, more competitive tax code. At the same time, we have put the R&D tax credit to exactly the use it was designed — creating U.S. jobs in a high-value, advanced technology industry," he said in a statement.
The Institute for Policy Studies said Boeing would have spent the money on R&D without the credit.
In addition to performance-pay deductions and R&D credits, the report criticized the use of tax havens that allow technology companies, for instance, to assign intellectual-property rights to shell companies in the Cayman Islands, so they can run profits through them and avoid taxes. It noted that 26 companies have a combined 537 subsidiaries in tax-haven countries.
The study also cited accelerated depreciation on investments, which allow a company to take deductions for big-ticket purchases in one year, as opposed to over several years. That cuts taxes in the first year.
The study said AT&T used accelerated depreciation to save $5.2 billion on its 2011 taxes while paying CEO Randall Stephenson $18.7 million last year.
Sarah Lubman, an AT&T spokeswoman, said the deductions encouraged the company to make $20 billion in investments last year. She also said that the deductions won't be available to take in future years, which should increase taxes.
A Citigroup spokeswoman noted that the company lost money in 2008 and 2009 and used the losses to offset taxes on profits this year.
© The Associated Press, 2012
The study, by the Institute for Policy Studies, said the companies, including AT&T, Boeing and Citigroup, paid their CEOs an average of $20.4 million last year while paying little or no federal tax on ample profits, according to regulatory filings.
On average, the 26 companies generated net income of more than $1 billion in the U.S., the study said.
The study blasted tax rules allowing unlimited deductions for CEO "performance-based" pay, like many stock options. It said the five biggest performance payers among the 26 companies took $232 million of these deductions last year.
Among the "kingpins" it criticized was CEO James McNerney Jr. of Boeing. It said he got $18.4 million in pay last year while his company received a tax refund of $605 million.
The study also laid into Citigroup for paying CEO Vikram Pandit $14.9 million while the bank received a net $144 million in tax benefits.
Eighteen of the 26 companies received cash back or credits to apply against tax in the future, according to the report.
The study, a 45-page attack on the corporate tax code, said deductions and credits are allowing companies to lavish big pay packages on executives so they can cut their tax bills while Washington gets less money in a time of trillion-plus deficits.
"Our nation's tax code has become a powerful enabler of bloated CEO pay," the study said.
To calculate tax, the study used companies' own math based on accounting rules. Regulators require companies to estimate their tax bill and disclose it in public documents for investors.
The tax filings the companies make to the government, typically in September, are private and can differ from the estimate.
Another problem is that the study doesn't count tax the company plans to pay but has deferred to future years. The authors argue that deferred tax can be put off indefinitely.
Charles Bickers, a Boeing spokesman, said that the company's federal tax bill, including deferred tax, was $1.3 billion last year, not a net credit, as the think-tank 's study found.
Boeing did lower its tax, in part by using a popular tax credit encouraging companies to spend more on research and development. Bickers said that helped the company hire 11,000 people in the U.S. last year.
"Boeing supports a simpler, more competitive tax code. At the same time, we have put the R&D tax credit to exactly the use it was designed — creating U.S. jobs in a high-value, advanced technology industry," he said in a statement.
The Institute for Policy Studies said Boeing would have spent the money on R&D without the credit.
In addition to performance-pay deductions and R&D credits, the report criticized the use of tax havens that allow technology companies, for instance, to assign intellectual-property rights to shell companies in the Cayman Islands, so they can run profits through them and avoid taxes. It noted that 26 companies have a combined 537 subsidiaries in tax-haven countries.
The study also cited accelerated depreciation on investments, which allow a company to take deductions for big-ticket purchases in one year, as opposed to over several years. That cuts taxes in the first year.
The study said AT&T used accelerated depreciation to save $5.2 billion on its 2011 taxes while paying CEO Randall Stephenson $18.7 million last year.
Sarah Lubman, an AT&T spokeswoman, said the deductions encouraged the company to make $20 billion in investments last year. She also said that the deductions won't be available to take in future years, which should increase taxes.
A Citigroup spokeswoman noted that the company lost money in 2008 and 2009 and used the losses to offset taxes on profits this year.
© The Associated Press, 2012
Comments
Henry Ford
That was the old America. Unfortunately, today it's : Make the goods at the lowest possible cost, paying the lowest possible wages, so that profit is maximized, providing the highest possible CEO compensation.
It's not about envy. It is about recognizing that greed is NOT good, and that it can, and may destroy everything that is good and decent about living in the USA. I would not want to live in a completely unregulated free-market capitalist society any more than I'd want to live under Soviet Communism. Both will produce an economic totalitarianism imposed on the vast majority. It should be remembered that the Communist and the Capitalist, though diametrically opposed in nearly all economic positions, share one trait. They both have complete disdain and contempt for the middle class. The Communist blames it for oppressing the poor, and the Capitalist sees it as a redundant and unnecessary expense that diminishes his profit.
The measure of a great Nation is not how well it allows the most cunning capitalist to live, it is how decently it cares for the least among us. The Christian understands this, the Social Darwinist (like Aynn Rand and Milton Friedman) believes that society is benefited when the poor die.
I don't really give a rat's ass if you are really tired of what you consider class envy. That is a joke in itself, as you know NOTHING about me or "my class". What a thing to say. I can recognize unfairness and outright wrongness without any trouble whatsoever. If you have problems seeing these things in today's society I feel sorry for you. Now be a good little sheeple and go watch your Fox News.
Amos, JDH, and Pheebs especially, you'll get tons of upvotes there and have a ball. Enjoy
EDIT - Seems this thread topic popped up there as well: http://www.reddit.com/r/politics/comments/ybfa9/26_corporations_including_att_boeing_and/
The real difference is, back in the day you got rich by producing something. These days, you get rich by stock swindling and bank fraud.
That's the real issue.
Most of those companies have federal subsidies and as such, should be taxed accordingly.
- US Olympians Wonder Why Fox News Calls Themselves News
- I could type out all of things about that I hate about Fox News...
- Jon Stewart Explains Fox News Gay Marriage Reaction
Those are the current top 3 topics; I think you'd enjoy it quite a bit more than I would
The moral, and ethical manner in which these monies are got is the whole subject of the story. (shaking head)
If you think it is moral and ethical with your country in the shape it is in, and with taxpayers forking over bailout money to some of these same companies that act like this... then I think your moral and ethical compass need calibration.
With some of your comments from the past, you throwing your support behind these types of practices is not really surprising to many of us either.
I guess you find it ethical for these Corporate Welfare types to dip into public money so they can ethically take the well earned and hard worked for wages they deserve? The fact that there is nothing left over for anyone else in society by the time these moral and ethical folks have finished feeding at the trough is just a consequence of a well run capitalist system, I guess?
As for being psychic? No, As I stated clearly (even if you didn't actually read it before you responded) that my comment was based on past comments you have made on this and related subjects. I didn't post this as a political statement ( I feel the need to state that again) Gypsy, you went there and also threw in a comment about my throwing around such subjective terms etc. You state your beliefs pretty clearly. Why would I need to be psychic? Nobody asked you about your feelings for the government and frankly I don't care. This was a post about corporate greed.
EDIT - on another note, fairness is a common theme in r/politics, and is accepted as a reason to do exactly what you're proposing:
http://www.reddit.com/r/politics/comments/ybfa9/26_corporations_including_att_boeing_and/
http://www.reddit.com/r/politics/
Also when it was citicorp it still had help from the govt via taxes and other "commons" structures to get it up and running. It even now continues to get money from us (the govt). So yeah it is in our (the people) interest on how many of these companies spend their money and especially when they can and have wrecked both our (the United States') economy and how we are respected around the world.
What about all those socialist defense contractors? They need to take their business into the free marketplace where it belongs! And what about all those socialist businesses that sell stuff to the government? To hell with that, eh? Dang straight. Git the bling blang guvermint offen the backs of business! What about all them airlines? They don't need no help from the bling blang guvermint! What about them hospitals? They don't need no help from the bling blang guvermint neither! No sireebob! And what about all that research commin outta our State Supported socialist Universities! Shut 'em down I say! Let our businesses git the help they need from themselves! We don't need no Postal Service neither, and all of these businesses that sell stuff to the Postal Service can jest go find somebody else to sell stuff to. And what about all these farm sibsidsies? These bling blang farm corporations who call themselves farmers can just go farm without any help from the bling blang guvermint! So what if food prices go through the bling blang roof, we got to git the bling blang govermint offen our backs! And there aint no corporations looikin to the guvermint for a sweetheart tax break is there? Well to hell with that, too! They don't need no help from the guvermint neither!
BRILLIANT!