CEOs Earned More Than Companies’ Tax Bills

CEOs Earned More Than Companies’ Tax Bills – Bloomberg.

Twenty-five of the best-paid chief executive officers in the U.S. earned more in salary and other compensation in 2010 than their companies’ federal income tax expenses as disclosed in public filings, according to a report by the Institute for Policy Studies.

 

Companies in this group, according to the report, included EBay Inc., General Electric Co., Verizon Communications Inc., Boeing Co. and Dow Chemical Co.

 

The group said its findings underscore the need for an overhaul of the U.S. tax code that would reduce the number of tax strategies available to companies, especially their ability to lower tax payments by parking profits overseas.

 

Eighteen of the 25 companies mentioned in the report operated subsidiaries in countries known as offshore tax havens, Collins said.

Twenty of the 25 companies on the institute’s list reported spending more on lobbying Congress than they did on federal taxes, the organization said.

 

The report echoes some elements of a study released in May by Citizens for Tax Justice, a Washington-based nonprofit group backed by labor unions, which said 11 U.S. corporations reported $62 billion in domestic profits while paying a negative 3.6 percent tax rate in 2010.

NeilS – The term “shared sacrifice” continues to rear its head as the debt and deficit reform debate continues.  A few weeks ago Warren Buffett wrote an op-ed about taxation of the rich that met with both vast support and harsh criticism.  Almost unanimously, Washington politicians agree that tax reform is necessary, but the methodology to pursue this goal is vastly different.

The above data reflect just how skewed the corporate tax code has become.  With a vast array of tax loopholes and the ability for companies to keep money offshore and reinvest abroad, corporate tax receipts seem lagging.  Not only did the CEOs of these companies earn more than their respective companies paid in federal taxes, but many of the companies spent more on lobbying than their federal tax outlay.  With proper reform and transparency, these companies could spend substantially less on lobbying and put that money directly toward reducing our deficit.