Before the deficit reduction “super-committee” embarks on a $1–2 trillion course of human slashonomics , it should take a hard look at the Institute for Policy Studies’ (IPS) eighteenth annual executive compensation report , which details how corporations are rewarding CEOs for aggressive tax avoidance—to the tune of at least $100 billion in lost tax revenues every year.
Executive Excess 2011: The Massive CEO Rewards for Tax Dodging reveals that last year twenty-five of the 100 most highly paid CEOs took home salaries greater than the amount their companies paid in 2010 federal income taxes. And it wasn’t because the corporations weren’t making dough—they averaged global profits of $1.9 billion, and only seven reported losses in US pre-tax income.
But these twenty-five companies shielded their profits in 556 tax haven subsidiaries in places like the Cayman Islands, Isle of Man, and Singapore, which proved to be a lucrative tax dodging strategy for the CEOs themselves: the twenty-five CEOs averaged $16.7 million in compensation, compared to $10.8 million for their peers in the S&P 500.
“What we’re seeing here is tax dodging, pure and simple,” says Sarah Anderson, who directs the global economy project at IPS and has coauthored the Executive Excess report for eighteen years running. “And tax dodging that’s benefiting the CEOs of these companies personally.”
It’s not that the corporations are breaking the law. Indeed, the report co-authors emphasize that tax dodging isn’t illegal. But Anderson points out that the laws are “the result of a corrupt system where hundreds of millions of dollars spent lobbying can result in these kinds of crazy, corporate tax loopholes.”
That’s why twenty of the twenty-five companies who paid their CEOs more than they paid in federal income taxes also spent more on lobbying lawmakers, and eighteen contributed more to the political campaigns of their preferred candidates than they paid to the IRS.
America's wealthiest are like modern day feudal lords - they get all the wealth, and the power and privilege that goes along with that wealth, yet they take advantage of a system of tax laws that were largely written by their well paid lobbyists. What happened to those American ideals about a government for and by the people. We've bypassed that fundamental egalitarian ideal because that ideal is now seen as some kind of socialism by conservatives - conservatives who claim to be the embodiment of patriotism. How can someone be an American patriot and never stand up for American values.