A most interesting study came out of the left leaning Institute for Policy Studies. They found 26 corporations paid more to their CEO than they actually paid in taxes. IPS compared executive compensation to how much tax write offs that pay package gives and conclude excessive compensation is a tax on you. Corporations are raking it in and not paying much to Uncle Sam. CEOs aren't being rewarded for actual performance, the excessive pay is more reflective on our loophole ridden corporate tax code. IPS estimates CEO pay at 26 firms is equivalent to a $46 dollar tax on every person in America, or $14.4 billion per year.
- Of last year’s 100 highest-paid U.S. corporate chief executives, 26 took home more in CEO pay than their companies paid in federal income taxes, up from the 25 we noted in last year’s analysis. Seven firms made the list in both 2011 and 2010.
- Once again, low corporate tax bills, or large refunds, cannot be explained by low profits. On average, the 26 firms had more than $1 billion in U.S. pre-tax income but still received net tax benefits that averaged $163 million.
- The CEOs of these 26 firms received $20.4 million in average total compensation last year. That's a 23 percent increase over the average for last year’s list of 2010's tax dodging executives.
- Two of the firms that paid their CEOs more than Uncle Sam, Citigroup and AIG, owe their very continued existence to taxpayer bailouts.
- Combined, the 26 firms have 537 subsidiaries in tax-haven countries such as the Cayman Islands, Bermuda, and Gibraltar.
Now, firstly, all compensation is a business expense, deducted from gross receipts of any business as an operating cost. Businesses don't pay taxes on gross receipts, they pay taxes on profits, or what money is left after deducting the costs of running a business. Still, this report's premise is a great way to look at excessive executive compensation.
We have a culture of CEO. Chief Executive Officers are worshiped, every word they utter considered golden and even politicians gush and glow at the prospect of touching the hem. Instead of corporate meetings and announcements, we have worship groups shouting praises and singing hallelujah over the latest product launch or press release. Financial groupie press publish pictures of executive mansions, rejoice over their billionaire status and executive lifestyle and salivate at the excess most of us will never know. Not one word is written connecting CEO pay or corporate profits to the poverty that the latest round of fired workers were thrown into. Our Corporate Culture Worship never writes about the mega poor, showing their foreclosures, repossessed cars, lost retirement and broken dreams. No, only the mega-rich can make the headlines.
America is no longer a democracy, that's only for show. What we are is a kingdom, with glorified feudal lords called CEOs. Most of America is now the mere peasantry of society.
Income inequality in the United States is at all time highs. Social mobility, or getting ahead by your own bootstraps, has disappeared in America. The American dream is simply some sort of past fantasy used by advertisers to sell product. It's gone, sold down the river by corrupt politicians.
Even the CBO has shown the rich got richer and the rest of us got the shaft. CEO pay now has a 380-to-1 ratio to average pay in America. In 2011, the S&P 500 Index CEOs received an average of $12.9 million in pay. That's a 14% raise from 2010. The average unemployment rate in 2011 was 8.9% with millions dropping out of the labor force.
The Bush tax cuts put income inequality on steroids, as noted also in the IPS study. IPS estimates that 57 CEOs saved over $1 million each per year, thanks to Bush and the GOP.
The GINI index is a measure of income inequality and puts the United States below Iran and right above Uruguay. Think about that next time you hear how America is the richest country in the world. That's a false statement, America has some of the richest people in the world sucking her life blood dry. America is more like other third world countries. A few elite living of the sweat and toil of the peasants. Think that statement is extreme? The GINI index says not.
IPS wants something done about executives sucking America dry while we run up massive deficits and fire workers. The report mentions a fact we've seen time and time again, regulators have failed to implement most of the executive pay-related provisions in the 2010 Dodd-Frank financial reform legislation. This is the story of the last four years, Congress does nothing and if they do even a little bit, one can bet regulators won't implement what Congress passed. IPS lists four loopholes, which if closed could save $14.4 billion a year, shown below.
IPS recommends a few bills languishing in Congress. Congress is the place where all great policy and ideas go to die.
A couple of bills mentioned are H.R. 382, The Income Inequality Act, which is currently buried in the House Committee on Ways and Means. This bill would limit the amount of executive compensation that is tax deductible and also ties executive compensation to regular employees salary.
Another bill going off to die, buried in the Committee on Finance, is S.1375, the The Ending Excess Corporate Deductions for Stock Options Act. There is a double accounting standard for stock options and this bill would stop that at an estimated $2.5 billion in additional tax revenues per year. Employees are granted stock options but they are not deducted from the corporate books until that employee exercises those options. Ignoring incentives for joining start-ups and forming new businesses, it seems corporations can use this double accounting method as a tax refund, against future corporate earnings. The report notes Facebook will get a $500 million refund from the IRS due to the double accounting standard for stock options, like that?
Other attempts to close loopholes have already been killed in Congress or by regulators and the executive branch. Whether Democrat or Republican, anyone who dares try to stop corporations running amok are met with legions of corporate lobbyists flooding the halls of Congress, demanding politicians kowtow to their whims.
The IPS report is 42 pages and at the bottom are various legislative efforts and failures in a two page table to curb executive compensation. They also are launching a campaign to do something. Fat chance. Not with this Congress and our current 2012 candidates.
The US is actually a national Potemkin Village - an illusion
Look around the US and travel abroad. People overseas think we have it so good, we're spoiled, that we need Indians, Chinese, Mexicans, and Central Americans and foreigners to do our jobs. Yet when you explain that CNBS and Bloomberg and Congress paint a certain picture and it's pure bullshit, and real unemployment is 20%+, and that we actually have degree after freaking degree but still are purposely ignored by our own "American" corporations so they can undercut and replace us, they are pretty damn surprised. What's most shocking to them is that our leaders really don't give a crap about their own citizens to this level in a country that preaches about equality and fairness and the rule of law.
See, the corporate-owned media paints that picture, TV wants people to believe that everyone's living like a spoiled leech on "Real Housewives of Who Gives a Crap." so that people think Americans have it coming and we just need to accept less and work harder. Well, f*ck that. That's all noise and we all know it. CNBS has Jack Welch on as some icon? Of what? Getting rich off people who are fired and destroyed? He's an asswipe that loved cutting people so he could prosper, nothing more. And what, his replacement is better? And he's on a "Job Council." WTF has that council done except give more titles to more asshates killing the middle class while Obama and ex-Pres Clinton (yeah, Bill, I have to remind you, you aren't in office anymore, so disappear and stop screwing over more Americans with your foundations and acting like someone who cares about the world) and every other politician meet secretly with CEOs to bone us over.
There's a story about ATP Oil CEO saying the government made it impossible to succeed and that's why he's bankrupt. Isn't it great - whenever they succeed and make mad loot, it's because of their actions solely (are you kidding me, especially in natural resources sector where there are GOVT. LEASES and the oil companies rely on our govt. and military protecting their asses around the world). And when they fail (despite all that $ they lobby with), it's still not their fault, it's the government's? Sounds like ready made excuses at every turn. CEOs succeed, it's all to the CEO's credit, not the workers, taxpayer infrastructure, state-educated workers, military protecting resources globally, govt. that will help protect company in court and WTO, state and federal courts that seek rule of law and settle disputes, etc. And when they fail, damn, it's not the CEO's fault, it's all that uncertainty, the government, those policies 50 years from now they cannot predict. Stop it, while all the complaining is going on, there are tens of millions of people with more skills, brains, education, and a whole lot more integrity and concern for other Americans who are homeless or close to homeless. So preach it on Fox or in Forbes or some other puppetshow that can pretend to care. But don't try to meet Paul Ryan, he might be busy, he's meeting with Adelson so they can make sure justice and law enforcement and foreign bribery laws never affect the people with money -"and justice for all" [audience laughter].
Yeah, Bloomberg, there's an icon everyone can universally despise. So much time to spout globalist 1% agenda, so little time to actually be a mayor - just resign already so you can keep visiting the Aspen Institute, Brookings, Davos, lobbying/lying to Congress about lack of qualified Americans, etc. 365 days a year.
Murdoch, another person loathed around the world.
Eisner (what would Walt say about people like that)?
Bill Gates - the man who stole IP from other people, acts like he invented something, and then perjurs himself in front of Congress saying he just can't find any qualified Americans to do his bidding (but then again, Youtube has the videos of the script they are supposed to follow to get more H-1Bs, and wouldn't you know it, Bill Gates can read scripts).
And on, and on, and on.
But that's the facade they want the world to believe, anything's possible, if it just weren't for the lazy Americans that we have to fire and destroy.
Drop these people off without the family connections and their names, without their bullshit step-on other people and lie your way to the top attitudes and see how great they really are - hint: they aren't.
Hey, Murdoch, bribe a cop to get out of a ticket and we'll see you in a cell within 10 hours. But with your name only and your millions made through crime, you can lobby DOJ to avoid charges. Guess what, that only proves you are worse than the average citizen because you break laws and then require preferential treatment to avoid hard time.
Yeah, most CEOs, they are special, very special. Anyway, time to go, Robespierre is meeting on the tennis court (oh, banksters and CEOs, if you don't know the reference and right quick, you ain't that bright, but ask one of your unpaid interns to kiss your ass, it will make you feel powerful despite your lack of skills and care for your own country).
The worship of CEOs or any individuals is always disconcerting
Raising anyone to hero level is always disconcerting. I'm a firm believer that those who are probably doing the most good in the world are those who you will never hear about, and quite frankly, they'd be extremely uncomfortable with the press - they certainly aren't getting rich through other's efforts and will probably remain anonymous to those writing articles or meeting in elitist retreats. They are doing it, quite simply, because it's right. "I am CNBC"? Huh? Go visit China and find Tank Man or cover the journalists and corruption fighters who are killed or otherwise disappear in the former Soviet Union all the time. Heroes? Praise those who took on Colombia's cartels when that was a death sentence or thousands of other examples around the world every day. Most aren't winning Nobel Peace Prizes and aren't getting rich.
And those we do know about, often passed up any wealth in order to help others. Jonas Salk's response when Edward R. Murrow asked him who owned the patent on the polio vaccine, was “Well, the people, I would say. There is no patent. Could you patent the sun?” Well, nowadays we have private companies trying to exploit outer space for minerals, so never put anything past today's business "leaders." In addition, the polio vaccine required private + public cooperation, which Ayn Rand and many politicians probably wouldn't approve of.
Today the CEOs and politicians and the press would probably mock him, try to steal his vaccine, or have him come up with it as a "freelancer" or get it through crowdsourcing him and he'd get no credit and they'd get rich. Or they'd hire tens of thousands of people in another country to make some hair growth formula because trying to cure polio probably cost too much money and Salk was already too old and overqualified according to CEOs nowadays to really do anything.
Plenty of people throughout history are fighting injustice, protecting their families and neighbors, etc. many of whom were crushed, but did their part for their fellow man.
Today we are bombarded with an "Oracle" that is the son of a politician and makes inside deals and, of course, is rich and is followed 24/7 by a female TV host (PR work or "journalism)? They are celebrating CEOs who hold themselves above the people buying their products, hold themselves above the law, and hold themselves to different rules of conduct and business - after all, this isn't Adam Smith's capitalism, rather, more like the collapsing Soviet Union and years after - plutocracy and crony capitalism.
Truly great men and women in our society will be purposely ignored by the press because the corporate press can't sell more goods if people question the ethics and morals being celebrated daily. They want CEO worship, compliant consumers, and workers who will go along until we are all unemployed and homeless and then they will focus all sales and work overseas. Even without anyone else praising them, CEOs' and politicians' hubris is already taking a terrible toll on society.
They want the US to die with a whimper, while laying blame for all they helped cause at the feet of the most powerless - the American worker and unemployed worker. Too bad for them we won't go silently along as Americans suffer, despite their plutocratic wishes. Thoreau's "Civil Disobedience" doesn't sell [Product X, Y, or Z] and he wasn't getting rich on Walden Pond, but something tells me we could use more Thoreaus and far fewer of today's CEOs setting our path.
Polio vaccines for nothing vs. Bloomberg terminals
Tough choice, polio vaccines for nothing vs. bankster information that will profit a bankster/part-time mayor. Hmm, what would Salk say? I'm guessing the world population matters more than an elitist bankster. Hey, Mayor, dollars to donuts in a push-come-to-shove situation like a Gulag, or concentration camp where Polish and Jewish and Ukrainian and other freedom fighters were killed, or Pol Pot's hellholes where people were killed for wearing glasses, you wouldn't do the right thing, you wouldn't stand up for the weak, the oppressed, etc. And I could see the excuses, "Sorry folks, you've got to die, but I can do so much more if I live." We've heard it, we hear it, and we'll hear it 10,000X more times. An unarmed German young woman had more balls than many more people claiming to be people of integrity - look it up. Are the victims in Davos, are the victims in the UN, are the victims sipping champagne? Americans don't ask for much, we just want people who will look out for their countrymen and the Constitution according to the laws they swore to protect. Looking out for the weak is more impressive than sipping more champagne at a sycophants' convention - but it involves real sacrifice, something most Americans have had more than their fair share of for many years.
Polio, penicillin, public good, national interest
Ralph Gomory and others have recommended we demand corporations being redefined to be good citizens. They are not loyal to the United States and obviously not loyal to American citizens. They do not act in the national interest.
Can you imagine today the discovery of Penicillin? At the time, the British and the U.S. government are the ones who funded the effort for mass production. Nobody was thinking, how much money can I squeeze and my profit margins aren't enough so either pay up or we're not producing it. Save billions of people over time.
Salk as you know gave his discovery to the world.
We need the entire corporate entity to be redefined and this goes along with removing corporate personhood. Since Citizens United, that looks like it has a prayer's chance at the moment.
This idea they are to make quarterly profits for shareholders at all costs is immoral and they are not even doing that. They are making their excessive pay the #1 consideration. Think about Forina and HP-Compaq merger. It was all about the fees, the bonus, the money. Literally HP went from being a world innovation leader to one step above cheap plastic toys from China. HP has been completely destroyed through offshore outsourcing, labor arbitrage, H-1B, short term thinking. All was caused by CEOs who cared more for their bonuses and superstar status than even the company itself.