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I'm not agreeing / disagreeing on both the issues at hand here (US CEOs get paid too much, US corporations don't pay enough in taxes), but it's important to tak
by ajiang 14y ago
I'm not agreeing / disagreeing on both the issues at hand here (US CEOs get paid too much, US corporations don't pay enough in taxes), but it's important to take these statistics with a huge grain of salt. In any given year, a corporation's tax paid can vary widely. It's not common to see very little tax paid for perfectly legitimate reasons such as operating loss, acquisition of companies with net operating loss, tax shields from major capital investments, etc. It's a significantly more meaningful to look at these statistics over time and with the context of the individual businesses.
- npguy 14y agoYou do have a good point on the very weak comparison of these two numbers - but the bigger point regarding the scale of these two numbers - holds. It is funny we can even compare these two variables - CEO pay and US tax - but that is the sad reality.
- jstelly 14y agoAlso without seeing more of the detail of the analysis there are perfectly reasonable cases for this, e.g. A company with 1 employee (the CEO) has a profit of $1,000,000. This company pays corporate income tax on the profits. The next year the same company decides to take all of its profits and pay them to the CEO (he's the only employee). Now that company supports this statistic (pays no corporate income tax since there is now no profit so by definition pays the CEO more than it pays in taxes), but now the CEO pays personal income tax on that profit. This is by design in the US tax system isn't it? I don't see anything wrong in this case. I realize that you can make it less clear by adding in some kinds of equity compensation and other benefits.