Thanks a Billion (or So)
Small Loophole Inserted 20 Years Ago Helps Companies Avoid Paying the U.S.
Treasury Big Money
Nov. 11, 2013 - In 2012, the ratio of
CEO-to-median worker pay had soared to 354:1. Meanwhile, corporations have avoided paying
taxes on their executives’ huge paychecks by paying them primarily on the basis
of incentives, sometimes of questionable legitimacy. The top 20 highest-paid
CEOs in the most recent version of the AFL-CIO’s annual list of highest-paid
CEOs were paid base salaries totaling $28 million, but had performance-based,
tax-deductible compensation totaling more than $738 million. Assuming that these CEOs’ companies paid a
corporate tax rate of 35 percent, tax-deductible performance-based compensation
for these CEOs cost American taxpayers as much as $235 million in lost tax
revenue. To address the
unintended loophole in section 162(m), Congress should pass the Stop
Subsidizing Multi-Million Dollar Corporate Bonuses Act.