If you were wondering why Republicans fought tooth and nail this summer to keep corporate tax loopholes off the bargaining table during the debt-ceiling negotiations, it's because the CEOs of those companies make lots of money shirking their tax responsibilities. A report conducted by the Institute for Policy Studies found that "25 major U.S. corporations last year paid their chief executives more than they paid Uncle Sam in federal income taxes." Tax rebates didn't come from low profits, but from "aggressive corporate tax-dodging" using overseas tax shelters and exploiting loopholes.
Not angry yet? Average executive pay for the country's biggest companies rose even higher than initially believed in 2010, to "$10,762,304, up 27.8 percent over 2009," while the plebes made "$33,121, up just 3.3 percent over the year before." But remember: raising taxes hurts job creation. Just think of all the gardeners and maids these masters of the universe will hire. And if you're really lucky, you'll get a job as their pool boy so you can screw their wives. The system works!
A spokesman for GE, one of the companies shamed in the study, tells the Daily News that "GE pays what it owes." Another rep for Boeing, a company that is earning up to $900 million in tax subsidies for moving a plant to South Carolina, says the study is "simply wrong." Maryland Congressman Elijah Cummings, the ranking member on the Committee on Oversight and Government Reform, has called for a hearing on the report's findings but that will probably die, given that the 25 companies featured in the study spent more than $150 million in lobbying and campaign contributions last year.
While the entire report [pdf] is fantastic, here are a few gems that will have you lingering in the "pointy farm implement" aisle of your local hardware store this weekend:
- Chesapeake Energy paid no federal taxes in 2010, despite making $2.8 billion in profits, and thanks to tax breaks the company averaged a tax rate of 0.3 percent from 2002 to 2006. But look at all of the wonderful things those breaks have allowed them to do: give CEO Aubrey McClendon a $75 million bonus, and buying his $12 million antique map collection. Who cares that the company saw a 40 percent decline in share price in 2008? Can you argue with a company's solid investment strategies of antique map collections previously owned by their own CEOs? Of course you can't!
- Prudential CEO John Strangfeld was paid 16.2 million, while is company received a $722 million tax refund thanks in part to renovating luxury hotels in high-poverty neighborhoods. By gutting hotels in Chicago and Portland near poor people and students, the company made $58 million exploiting the New Markets Tax Credit, which was designed to help the very people they screwed. Nice work, John. Good luck sleeping in any of those hotel rooms!
- Verizon CEO Ivan Seidenberg was paid 18.1 million while his company received $705 million in tax rebates, meaning that "every Verizon phone customer paid more in federal telephone excise taxes than Verizon paid in federal income taxes." Oh, and they also cut 13,000 jobs last year, which definitely helped their—and Seidenberg's—bottom line.