America’s Biggest Companies Paid Top Execs More Than They Paid In Taxes

Corporate tax dodging and extreme government pay have grown so rampant that dozens of main American firms now pay more cash to their high executives than they pay in federal revenue taxes, a brand new report has discovered.

The progressive nonprofit Americans for Tax Fairness and the nonprofit wealth hole watchdog Institute for Policy Studies examined government pay from 2018 to 2022 on the nation’s most profitable company tax dodgers. They discovered that at 64 main firms, compensation outstripped their company tax payments no less than two years out of 5.

“Corporate boards have more money to spend on their highest-paid employees when they don’t have much or anything to pay in taxes,” learn the report. “Executives are in part reaping rewards for the corporate tax avoidance strategies they pursue.”

At 35 firms — together with Netflix, Ford, Tesla, T-Mobile, DISH Network, and greater than a dozen vitality firms — the highest 5 executives took dwelling more cash than these firms paid in taxes for all 5 years of the examine. About half paid no federal company revenue taxes in any respect and acquired substantial tax refunds.

The cumulative government pay at these 35 firms was $9.5 billion, whereas their whole company tax payments netted out to a refund of $1.8 billion. Every firm included within the report posted a revenue all 5 years.

The report partly linked runaway government take-home pay to the Tax Cuts and Jobs Act, signed in 2017 by then-President Donald Trump. The legislation supercharged inventory buybacks — a apply that permits firms to inflate their very own inventory value by shopping for again shares from the open market — which may straight increase government pay.

The act additionally slashed the beginning company revenue tax fee from 35% to 21%, which main multinationals lowered even additional utilizing loopholes and particular tax breaks. In apply, the 64 firms highlighted on this report paid a mean federal tax fee of two.8%.

But even earlier than the Trump tax cuts, the tax code privileged the pay of extremely rich executives. One loophole permits executives to shelter a vast share of their pay in particular retirement accounts. Unlike odd 401(ok)s, there aren’t any caps.

Quite a lot of progressive Democratic proposals earlier than Congress would rein in government pay by taxing firms the place the CEO-to-worker pay hole is bigger than 50 to 1 or pegging an organization’s tax fee to the scale of that its worker-executive hole. Another would shut the loophole permitting limitless government contributions to tax-deferred retirement accounts.

“This report shows how executives of big corporations are rewarded for aggressive tax avoidance while working families and small businesses are left to pick up the tab,” mentioned IPS Global Economy director and report co-author Sarah Anderson.