More for Them, Less for Us, Talking Taxes and Deficits
Ran across am Americans for Tax Fairness article last night. Corporation tax dodging and executive pay has both is far out of control. A significant number of major U.S. corporations are paying their top executives more than they’re paying federal income taxes.
Matters have worsened with trump taking office in 2016 and the TCJA Making the Tax System, and the Tax Season More Burdensome. There is roughly a $2.1 trillion deficit resulting from this tax break. It was passed using Reconciliation and can be repealed, etc. It has not increased revenues and has worsened the deficit.
Key Findings
- Thirty-five profitable corporations paid top executives more than they paid in federal income taxes between 2018 and 2022.
- The 35 companies not only paid less to the federal government than their top bosses—they paid less than nothing to Uncle Sam, instead receiving almost $2 billion in cumulative refunds.
- 29 other big firms handed out bigger paychecks in the executive suite than they mailed in federal tax checks in at least two of the five years studied.
- Electric-car maker Tesla paid founder Elon Musk and the other four highest-paid executives $2.5 billion over that period. Despite $4.4 billion in domestic profits paid nothing in cumulative federal income taxes and instead got back a net $1 million in tax refunds.
- Wireless giant T-Mobile paid its top five executives $675 million, racked up almost $18 billion in domestic profits Yet instead of paying net taxes, they pocketed a cumulative refund of $80 million.
- Streaming king Netflix paid next to nothing on over $15 billion in domestic profits, only paying $236 million (or 1.6%) in taxes while rewarding their top five occupants of the executive suite with over $650 million in compensation.
Corporate Tax Avoidance in the First Five Years of the Trump Tax Law
Observations
“Both kinds of corporate misbehavior, underpaying taxes and overpaying executives ultimately make working families the victim through smaller paychecks and diminished public services,” said David Kass, executive director of Americans for Tax Fairness.
“Executives of big corporations are rewarded for aggressive tax avoidance while working families and small businesses are left to pick up the tab,” said IPS Global Economy director and report co-author Sarah Anderson.
Corporate taxes as a share of federal revenue and of the American economy have both been declining for decades. The 2017 Trump-GOP tax law — the centerpiece of which was a 40% corporate tax cut — only made things worse. The report also notes that while there have been attempts in recent years to rein in excessive executive compensation, the pay packages keep getting bigger.
Some policy solutions to end corporate tax dodging and rein in excessive executive pay:
- Raising the corporate tax rate to 28% (just half way back to Obama-era levels) would generate $1.3 trillion in new revenue over the next decade.
- Closing loopholes and eliminating tax breaks, through measures such as the No Tax Breaks for Outsourcing Act, which would remove the incentives for American firms to shift profits and production offshore.
- Enacting tax and procurement reforms and stronger curbs on stock buybacks and banker bonuses, which would help return executive pay to more reasonable levels.
“Rather than more tax breaks, Congress should focus on addressing these deficiencies by cracking down on the use of tax havens, eliminating wasteful corporate subsidies and closing loopholes that further enrich wealthy corporate executives,” the report concludes.
More for Them, Less for US: Corporations That Pay Their Executives More Than Uncle Sam
Raising taxes on the Rich & big corporations only results in more loopholes. Taxes on business profits are ultimately passed on to the customer as a cost of doing business. Therefore individuals ultimately pay corporate & business taxes. Best tax policy is an individual income tax at a flat rate low enough to discourage cheating & zero deductions applied to all income sources. Politics being what it is, we will never see a fair and equitable tax system. Likewise, we will never see a responsible government budget devoid of partisan favors until the size & scope of the government is drastically reduced. Apply some commons sense to a review of history ought to be enough to convince.
paddy
common sense is in the eye of the beholder…or the holes in his head.
you can’t run a country with a flat tax.
and you can’t run a country where the politicians cheat as a regular order of business.
“the holes in his head”= the blind spots we all suffer from partly from the ordinary limits of human intelligence and partly from a semi deliberate refusal to see what we don’t want to see because it would mess with our favorite fantasy of how the world works.
speaking of holes…the above should have been addressed to Dennis.
Dennis:
That is a pretty old argument you have going for yourself. How about we just reverse trumps tax break and put it back where it was? Except, you leave 80% of the lower income taxpayers with the tax break and reverse it for the upper 20%. The $200 billion from that segment alone would pay that much for the lower 80% over the 10 years.
Ten years comes in 2025 and by then the tax breaks for business was supposed to generate enough to pay for the tax reductions. It has not resulted in greater tax receipts. Indeed, it appears many of the upper tier companies have benefited greatly from trumps tax breaks. Steve Roth and I were talking about this in the last few weeks.
What is mhtc?
What Dennis said!
Corporate loopholes are small change, the real plunder goes through the pentagon, and the other part of discretionary spending.
Every shell, bomb and hundreds of billions in wasted dollars passed through the military industry complex to extravagant weapons, Ukraine and Israel, pillaged from American families!
The rest of discretionary spending is plundered by and for special interests.
Tax “fairness” in USA is nonsense!
Why pay taxes for the embarrassment that is DC?
paddy:
The loopholes can be readily applied to the population needing it rather than a few corporations that already are profitable, having record profits, and many of which benefited from the Covid plague.
I do not recall discussing the Pentagon. And Dennis is an offshoot.
You boys really need to turn off the television and go play outside …