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Dozens of big U.S. companies paid top executives more than they paid in federal taxes, report says
Top executives of dozens of major U.S. companies received more in their compensation packages from 2018 to 2022 than the businesses paid in federal taxes, according to a new analysis of financial data from the Institute for Policy Studies (IPS) and Americans for Tax Fairness (ATF).
The report highlights the issue of whether some America’s biggest and most profitable companies are carrying their weight, and comes as President Joe Biden is proposing to boost the corporate tax rate to 28%, up from the 21% rate set under the 2017 Tax Cuts and Jobs Act (TCJA).
The analysis, which examined tax and compensation data for the first five years after the TCJA went into effect, seeks to link generous pay packages for top executives with the lower tax rates that corporations have enjoyed since 2018. Pay for corporate leaders has been on the rise for decades, with CEOs in 2022 earning about 344 times more than the typical worker, up from a ratio of 21-to-1 in 1965, according to the left-leaning Economic Policy Institute.
“We have these never-ending fights in Congress over our fiscal situation, one crisis after another, and one reason why we’re facing fiscal challenges is because corporations have not been paying their fair share of taxes,” said Sarah Anderson, a lead author of the report and director of the global economy project at IPS, a progressive think tank.
She added, “The executive compensation system is really set up to incentivize executives to push for corporate tax cuts and take other measures that will boost the value of their shares in the short term and the value of their paychecks.”
Pay in the billions
Among the corporations that paid their top five executives more than they paid in U.S. taxes over the study’s five-year period are many household names, including automakers Tesla and Ford Motor and financial services company AIG. Tesla and Ford didn’t immediately respond to requests for comment, while AIG declined to comment.
Tesla paid its top executives, including CEO Elon Musk, a total of $2.5 billion between 2018 and 2022, while receiving a $1 million tax credit over the same period, IPS said. The electric car maker, which earned $4.4 billion over that time, relied on a legal tax strategy to carry forward losses from earlier years to offset more current profits, the report found.
“Ford complies with tax codes and fulfills our tax obligations in every jurisdiction,” the company said, noting that it had yet to see IPS’s report. “Base pay for all our employees is competitive, with variable compensation tied to drivers of quality and customer and shareholder value. For executives, the variable compensation represents about 90% of their pay.”
IPS and ATF, a group that advocates for higher taxes on corporations and the rich, said the analysis includes only corporations that were profitable every year during the five-year span. The study relied on regulatory filings for tax data as well as compensation information for the top five executives at each company.
To be sure, tax data can be difficult to discern from regulatory filings and public statements, such as quarterly earnings reports. Business tax filings in the U.S. are confidential. The analysis also examines pay for executives who oversee global corporations, while excluding overseas profits earned by the businesses as well as any foreign taxes they paid.
What do big companies pay in taxes?
Many corporations pay effective tax rates that are considerably lower than the statutory 21% federal rate because of loopholes and other breaks that help them lower their tax burdens. The effective tax rate for large, profitable companies declined to 9% in 2018, the year the TCJA’s lower rates kicked in, from 16% in 2014, according to the Government Accountability Office.
Overall, in 2022 corporations in the U.S. had an average effective tax rate of 22.4%, according to data from the Organisation for Economic and Co-Operation Development.
Although that rate is higher than some other developed nations, the U.S. receives a fairly low share of revenue from corporate taxes, according to the Peter G. Peterson Foundation.
Meanwhile, there’s nothing illegal about corporations that take advantage of available tax breaks. But Biden and other Democratic lawmakers are arguing that big companies and their executives have enjoyed the bounty of the TCJA’s tax cuts, while failing to provide a commensurate investment in workers and the U.S. economy.
The TCJA’s tax cuts, which also lowered individual tax rates, are partially to blame for the nation’s ballooning debt, which has almost doubled in the last decade to $33 trillion. Some of the debt is also tied to pandemic spending measures authorized by Biden and former President Donald Trump.
According to the IPS and ATF, the tax cuts and outsized executive pay are also exacerbating income and wealth inequality.
“It says a lot about the priorities of the companies that a handful of people at the top are getting more than all of the money that profitable corporations are paying to help fund the vital public services and infrastructure that we need for our economy to thrive,” Anderson said. “Just because something is legal doesn’t make it fair.”
NEW YORK – The man accused of killing three people when drove drunk into a crowd on the Lower East Side on July 4th was arraigned on a host of charges Saturday.
Daniel Hyden of Monmouth Junction, N.J. is charged with aggravated vehicular homicide, aggravated vehicular assault, manslaughter, assault and operating a motor vehicle while intoxicated charges. Hyden was driving with a suspended license, prosecutors said.
According to prosecutors, Hyden, 44, drove a Ford F-150 pickup truck into the crowd at Corlears Hook Park just before 9 p.m. local time. He allegedly ran through a stop sign at the intersection of Water and Cherry Streets, drove up onto the sidewalk, slammed through the chain link fence, and into the crowd.
Eleven people were killed or injured, prosecutors said. The three people killed have been identified as Lucille Pinkney, 59, and her son Herman Pinkney, 38, and Ana Morel, 43. Another person was critically injured, and seven others hospitalized. The youngest victim was 11, according to prosecutors.
Responding police officers say they found Hyden on the ground next to the driver’s-side door, wearing pants but no shirt or shoes. He had bloodshot eyes, was stumbling and there was “a strong odor of an alcoholic beverage on his breath.”
“I hope we get justice”
Photos provided
On Friday, Family members of the victims returned to the scene, some breaking down in tears.
“I hope we get justice for my brother and my mother,” Diamond Pinkney said. “Herman, I love you. I’m going to do you proud.”
“We’re all devastated with this. It breaks my heart, and I’m so sad about it,” neighbor Nereida Garcia said.
The world’s oldest mummies have been around longer than the mummified pharaohs of Egypt and their ornate tombs — but the ravages of time, human development and climate change are putting these relics at risk.
Chile’s Atacama Desert was once home to the Chincorro people, an ancient population that began mummifying their dead 5,000 years ago, two millennia before the Egyptians did, according to Bernando Arriaza, a professor at the University of Tarapaca.
The arid desert has preserved mummified remains and other clues in the environment that give archaeologists information about how the Chincorro people once lived.
The idea to mummify bodies likely came from watching other remains naturally undergo the process amid the desert’s dry conditions. The mummified bodies were also decorated with reed blankets, clay masks, human hair and more, according to archaeologists.
While UNESCO has designated the region as a World Heritage Site, the declaration may not save all of the relics. Multiple museums, including the Miguel de Azapa Archaeological Museum in the ancient city of Arica, put the Chincorro culture on display. Some mummies and other relics are safely ensconced in those climate-controlled exhibits, but the remains still hidden in the arid desert remain at risk.
“If we have an increase in sea surface temperatures, for example, across the coast of northern Chile, that would increase atmospheric humidity,” said Claudio LaTorre, a paleo-ecologist with the Catholic University of Chile. “And that in turn would generate decomposition, (in) places where you don’t have decomposition today, and you would lose the mummies themselves.”
Other clues that archaeologists can find in the environment may also be lost.
“Human-induced climate change is one aspect that we’re really worried about, because it’ll change a number of different aspects that are forming the desert today,” said LaTorre.
Arriaza is working to raise awareness about the mummies, hoping that that will lead to even more preservation.
“It’s a big, big challenge because you need to have resources,” Arriaza said. “It’s everybody’s effort to a common goal, to preserve the site, to preserve the mummies.”
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