These are people somehow not derided as moochers, even though their million-dollar pay packages are propped up by tax breaks.
The parable of Charles Dickens’ A Christmas Carol springs to mind as Wall Street banks and law firms hand out six- and seven-figure year-end bonuses while Wal-Mart and fast food workers protest wages so low that their holiday meals are food pantry dregs. It is CEOs, not the working poor, who deserve public scorn for their dependence on government handouts.
The Institute for Policy Studies issued a report last month that details the mooching of the nation’s top corporations and CEOs. It’s called “Fleecing Uncle Sam.” The findings are pretty galling.
Of America’s 100 top-paid CEOs, 29 worked schemes that enabled them to collect more in compensation than their corporations paid in income taxes. The average pay for these 29: $32 million. For one year. And corporations mangle tax the code to deduct that too.
Though their corporations reported combined pre-tax profits of $24 billion, they wrangled $238 million in tax refunds out of the federal government. That’s refunds — the government gave money to highly profitable corporations.
That’s an effective tax rate of negative one percent.
That means middle-class taxpayers helped cover the cost of million-dollar pay packages for CEOs. Middle class taxpayers, whose median family income is $51,324 and whose federal income taxes are withdrawn directly from their checks before they see a cent of pay, support CEOs who pull down $32 million a year.
Their corporations pay nothing for essential government services that middle class taxpayers provide. That includes patent protection, the Commerce Department’s sanctions against foreign trade rule violations and federal court dispute resolution.
Some corporations haven’t developed schemes enabling them to tax the federal government. Instead, they pay, but not at that 35 percent rate they’re always whining about. Between 2008 and 2012, the average large corporation, according to Fleecing Uncle Sam, paid just 19.4 percent. Individuals earning $50,000 a year pay 25 percent. Clearly, corporations are not paying a fair share at 19 percent.
There’s this wacky theory that if governments excuse corporations from paying their share, then they’ll expand and create jobs. It’s wacky because it’s fiction. Highly profitable corporations aren’t expanding and creating jobs; they’re buying back their own stock.
A study by University of Massachusetts professor William Lazonick, president of the Academic-Industry Research Network, showed that between 2003 and 2012, S&P 500 corporations used 54 percent of their earnings – $2.4 trillion – to buy their own stock.
And this is the AMERICAN Way??