Now isn’t this special?
According to the Institute of Policy Studies, a liberal think tank, 25 of the country’s 100 highest-paid CEOs were paid more personally than their corporations paid in federal income taxes last year. (The corporations in question made, on average, a profit of $1.9 billion each.)
If you believe many conservatives, that’s pretty amazing. After all, corporate taxes in America are allegedly sky high, so the fact that so many profitable companies somehow managed to pay their CEOs even more than they paid Uncle Sam — well, that’s really saying something.
“In 2009, we calculate, major corporate CEOs took home 263 times the pay of America’s average workers. Last year, this gap leaped to 325-to-1. Among the nation’s top firms, the S&P 500, CEO pay last year averaged $10,762,304, up 27.8 percent over 2009.”
Average CEO pay among the S&P 500 up 28 percent in a year. Tough times. And again, that’s not the high-performers, the CEOs who did something special. The average CEO got a 28 percent pay hike last year.
And how did those companies end up paying so little in taxes? The IJS helps explain:
“No tax-dodging strategy over recent years has filled U.S. corporate coffers more rapidly than the offshoring of corporate activity to tax havens in low- or no-tax jurisdictions. Eighteen of the 25 firms highlighted in this study operate subsidiaries in offshore tax haven jurisdictions. The firms, all combined, had 556 tax haven subsidiaries last year….
How do tax havens work? One common corporate accounting technique, “transfer pricing,” helps corporations shift profits offshore. Technology and drug companies regularly open shell companies — in tax havens — that hold their intellectual property rights. They then charge their U.S.-based operations inflated amounts for the use of these rights. These inflated costs get deducted off U.S. taxes. The overseas tax haven profits go un- or lightly taxed. Adding insult to injury, a coalition of corporate tax dodgers is now asking Congress to reward their tax avoidance with a deeply discounted 5 percent tax rate if they bring these funds back home where many of them started.”
These are American companies — corporations that are based here in the United States because they know that locating here maximizes their profits. They want all of the advantages of being American, meanwhile pretending that a lot of their operations are located on some little Caribbean island.
Personally, I think I’m going to open an offshore branch of Jay Bookman and have my paycheck sent there. I mean, why not? I’m a person, corporations are persons. If they can do it, I can do it too, right?
Well, there is one difference. As the IJS notes,”the 25 firms highlighted in this study spent a combined total of more than $150 million on lobbying and campaign contributions last year.” In contrast, I didn’t spend a dime.
In fact, 20 of the companies in question spent more money “lobbying lawmakers than they paid in corporate taxes. Eighteen gave more to the political campaigns of their favorite candidates than they paid to the IRS in taxes.”
You get what you pay for.
– Jay Bookman