Twenty-six major US corporations paid more to their chief executive officers than they did in federal income tax, a study released Thursday by the Institute for Policy Studies found.
The Los Angeles Timesreports that the 45-page report from the left-leaning think tank concluded that corporations such as Boeing, AT&T and Citigroup paid their CEOs an average of $20.4 million in 2011, even as they paid little or no federal tax on massive profits.
"Tens of billions of... scarce tax dollars... are flowing from average Americans who depend on public services to the kingpins of America's private sector," the report states. "They're subsidizing, directly and indirectly, the mega-million paychecks that go to the top executives at our nation's biggest banks and corporations."
The report slams Boeing CEO James McNerny Jr., who was paid $18.4 million last year even as his company received a $605 million tax refund. It also criticized Citigroup CEO Vikram Pandit, who earned $14.9 million while his company got $144 million in tax benefits.
The study asserts that deductions and credits in the corporate tax code are enabling corporations to offer massive pay packages to CEOs so they can avoid paying taxes, even as the federal government struggles to deal with record deficits.
"Our nation's tax code has become a powerful enabler of bloated CEO pay," it states.
The report blasts tax rules allowing unlimited deductions for CEO performance-based pay, which saved the 26 companies $232 million in 2011, as well as research and development credits, without which companies would still invest in R&D, and overseas tax havens such as shell companies in the Cayman Islands. The 26 companies, the report says, have 537 subsidiaries in tax havens.
A similar report released by Citizens for Tax Justice in April detailed how many of the 26 corporations in the IPS study actually earned hundreds of millions, even billions, of dollars from tax breaks. CTJ also reported how other corporations did pay tax, but a pittance compared to their profits. GE, for example, paid just 2.3 percent in federal income tax over the past decade on profits of more than $81 billion.
Very few politicians from either major party have made an issue out of this, although Sen. Bernie Sanders, an independent, has publicly "named and shamed" the worst corporate tax dodgers.