A report, titled “Fleecing Uncle Sam,” released this week by the Institute for Policy Studies and the Center for Effect Government found that 29 of the 100 top-paid CEOs in the US were paid more than the total amount their corporations paid in federal income taxes in 2013.
“Our tax system is so full of loopholes that the biggest companies can get away with paying nothing or receiving huge refunds,” Sarah Anderson, co-author of the report told Common Dreams. “With the windfall profits these companies reward the CEOs who managed to bring tax bills down with even larger paychecks.”
Of America’s 30 largest corporations, seven (23 percent) paid CEOs more than they paid in federal income taxes last year, said the report. All seven of the corporations were highly profitable, earning a collective $74 million before taxes. Their tax refunds, however, dwarf any money they made: they received a combined $1.9 billion from the IRS, bringing their effective tax rate down to negative 2.5 percent.
The report found that the company on the top-100 list with the largest tax refund was Citigroup, “who owes its existence to taxpayer bailouts” and “paid its CEO $18 million while pocketing an IRS refund of $260 million” in 2013.
For some of the companies, this wasn’t the first year they’ve paid CEOs more than the government. In fact, Boeing, Chesapeake Energy and Ford Motors have been on the list each year the IPS and CEG have conducted their survey.
Some of these companies avoid paying taxes by operating subsidiaries in tax havens. According to the report, the companies with the 29 highest-paid CEOs have over 230 subsidiaries in these havens. “The company with the most … was Abbott Laboratories, with 79. The pharmaceutical firm’s CEO paycheck was $4million larger than its IRS bill in 2013.”
Corporations love to complain about the US having a corporate tax rate of 35 percent, whining that it’s the “highest among industrialized nations,” but they never seem to mention that the “average large corporation paid only slightly more than half that rate – just 19.4 percent – between 2008 and 2012.”
“For corporations to reward one individual, no matter how talented, more than they are contributing to the cost of all the public services needed for business success reflects the deep flaws in our corporate tax system,” read the report. “Rather than more tax breaks, Congress should focus on addressing these deep flaws by cracking down on the use of tax havens, eliminating wasteful corporate subsidies, and closing loopholes that encourage excessive executive compensation.”