Boeing, Ford Motor Company, Chevron, Citigroup, Verizon, JPMorgan Chase & Co, and General Motors were the seven companies named, which reported more than $74 billion in combined U.S. pre-tax profits in 2013, yet somehow paid negative taxes.
Right-wing think tank The Heritage Foundation repeatedly says the U.S. corporate tax rate is the highest in the world and that the “high rate reduces investment in the U.S. and costs American workers jobs and higher wages.”
They usually fail to mention that the average large corporation actually only pays 19.9%, that corporate taxes as a share of GDP remain near all-time lows, or that corporate profits in the U.S. continue to set record highs, year after year. And while they cite low worker wages as proof that corporate tax rates keep wages low, they neglect to note that CEO salaries are near all-time highs.
Companies are not using their record profits for raising salaries or “investment in the U.S.” They’re using the money to buy back their own stock, buy out competitors, and form ever-larger monopolies.
Of the seven companies mentioned above:
- Of the 100 highest-paid CEOs, 29 were paid more in 2013 their company paid in federal income taxes
- These 29 CEOs made nearly $1 billion last year ($32 million average)
- Their corporations reported $24 billion in U.S. pre-tax profits
- Their corporations claimed $238 million in tax refunds (effective tax rate of negative one percent)
- 12 of the 29 reported U.S. losses in 2013
- At the 12 unprofitable firms, CEO pay averaged $36.6 million
- Citigroup got the largest tax refund, at $260 million
- Citigroup paid its CEO $18 million
(Courtesy of Center For Effective Government.)
While free market ideology says people are paid what they’re worth, I say there’s very probably an upper limit to what a person can contribute to a corporation. Therefore, there should be an upper limit on pay at some point.