What’s The Opposite Of Robin Hood?

A recent study on corporate taxes and CEO salaries found that seven of the U.S.’s 30 largest corporations are paying their CEOs higher amounts than the companies’ entire tax bills.

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.

“They received a combined total of $1.9 billion in refunds from the IRS, giving them an effective tax rate of negative 2.5 percent.” (emphasis mine)

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:

“The seven CEOs leading these tax-dodging corporations were paid $17.3 million on average in 2013. Boeing and Ford Motors both paid their CEOs more than $23 million last year while receiving large tax refunds.”

There’s more:

  • 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

The Milking Of America
(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.

More on rising income equality in a previous entry.

  1. In nature, what’s big finds a way to keep getting bigger (unless isolated and subject to island-dwarfism). There’s always a bigger fish eating the smaller fish and growing yet larger. Was it fifty years ago that we had some twenty-five american airlines. And now there are four. It’s no irony then that corporations in every sector are the same way. Even Microsoft, attaining whale status, has learned to feed off of plankton, us.

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