You're subsidizing CEOs' massive pay
A tax loophole allows corporations to deduct millions when they give CEOs huge stock options and other types of 'performance pay.'
This post comes from Krystal Steinmetz at partner site Money Talks News.
If you shake your head when hearing about multimillion-dollar pay packages for executives, you're probably not going to be happy to hear that you as a taxpayer have helped subsidize that huge CEO pay.
It's true. A new report by the left-leaning Institute for Policy Studies found that a tax loophole has allowed corporations "to deduct unlimited amounts from their income taxes for the cost of executive compensation -- as long as the pay is in the form of stock options and other so-called 'performance pay,'" the institute said.
In other words, the more a company pays its top executive in performance pay, the less the company has to pay in taxes.
This loophole has provided a massive subsidy for exorbitant executive compensation.
The report focuses specifically on the restaurant industry, and for good reason. The industry has proven to be a double burden for taxpayers. While restaurant workers are often paid so little that they are forced to rely on taxpayer-funded programs for the low-income, taxpayers are also unknowingly helping to subsidize millions in executive compensation.
At the same time, the National Restaurant Association is lobbying to block minimum wage increases.
The chief executives of the NRA's 20 largest members take home more than $662 million in fully deductible "performance pay" over the past two years, which reduced their corporate tax bills by $232 million, the study found. Meanwhile, many low-paid workers at restaurants run by NRA members -- such as McDonald's and Chipotle -- rely on government programs for services they can't afford on their earnings.
A number of restaurant corporations are using tax subsidies to boost executive pay, CNN Money said. Here are a few of the heavy hitters.
- Starbucks. The company gave CEO Howard Schultz a total of $236 million in performance pay for 2012 and 2013. "That translates into an $82 million taxpayer subsidy -- enough to raise the pay for more than 30,000 baristas to $10.10 per hour for a year of full-time work," the institute said.
- McDonald's. The fast-food chain dished out $34 million in CEO stock options in 2012 and 2013, which generated a taxpayer subsidy of $12 million.
- Chipotle. Handing out nearly $200 million in performance pay to its CEO in 2012-2013 led to a $69 million tax break.
- Yum! Brands (owner of Taco Bell, KFC and Pizza Hut). The company received a $23 million tax break after handing out $67 million in performance pay in the past couple of years.
How do you feel about subsidizing executives' excessive performance pay?
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That isn't all we subsidize.
How about all those ridiculous government jobs Irs, judges, union supported jobs like police and fire.
I could go on an on u know the ones, YOU and me pay and pay and go without while these guys scam the system and get rich pig rich.
This country is out of control
another idiotic story.. yes a business deducts its expenses from its income and then pays taxes on what is left...... this is not news...
Someone needs to tell the left-wingers at NBC that the government NOT taking money from the private sector is not a 'government subsidy'.
A subsidy is actual cash payments of taxpayer money by the government to a certain group or organization such as Obama's largess to so-called 'green energy companies' which get both special tax breaks and direct cash payments.
And, as usual, NBC's 'source' (the Institute for Policy Studies) is a George Soros-funded Marxist organization.
Taxes on wages (in any form – flat or progressive) are the greatest evil of our American Republic. When government is free to steal from you, there are no limits to waste and abuse in government. If a person chooses to work extra hours or two jobs in order to better provide for themselves or their family, they should not be penalized, but that is what happens. The more you make by working harder and longer, the more money is stolen from you, and given to those who spend their lives living off the hard work of others.
The revenue the government needs to provide legitimate constitutional services should be obtained primarily from a national sales tax instead of a tax on wages. All would pay based on consumption, the more you spend the more you pay. The more luxury you surround yourself with, the more you pay. Your choice. A national sales tax system would capture money spent by criminals and by illegal aliens who currently pay near zero in taxes. There would need to be some exemptions: Cars (already have a federal excise tax) Primary Residence/Rental Properties (vacation homes would be subject to tax/rental profit would be taxed) Fresh Food (Preprocessed foods and prepared meals would be taxed – only fresh/fresh frozen/canned goods would be exempt) Insurance Premiums, Health Care & Certified Education.
Adding another layer of tax to a business would not be fair. Businesses would need to be compensated by keeping a portion of the tax to cover the expense of collection and reporting. A percentage of .20 to .05 would be fair.
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