So they want to “fix the debt” do they?
by digby
Representative Barbara Lee wrote this piece yesterday for Daily Kos and I thought it raised an important issue. It’s good to see Democrats speaking in this explicitly worker friendly (dare I say populist) language and introducing bills to deal with the problem. For too long all we’ve heard from both parties has been a celebration of producerism to one degree or another. Like the new move to raise Social security benefits, this sort of thing will undoubtedly provoke a torrent of complaints from the owners of America, but that’s part of he process.
The more they complain, the more likely it is that Americans will hear the other side of the argument:
Imagine a group of CEOs who want to “fix the debt” but benefit greatly from corporate tax breaks. That’s what’s happening today.
While the American middle class hangs on by a thread through a “jobless recovery”, corporations are making record profits and paying out record bonuses as well as over-the-top executive compensation packages. Corporations paying such huge executive pay packages have nearly unlimited deductibility.
Cash-strapped taxpayers shouldn’t be picking up the tab.
To stop this rising income inequality and fix our broken tax system, I have introduced HR 199, the Income Equity Act, which would limit the tax deductibility of executive compensation packages.
Under the current rules, the more a firm pays its CEO, the more the firm can deduct from its taxes.
To be clear, corporations can compensate their executives as much as they’d like. The idea is to prevent corporations from passing the buck to the American taxpayers.
My bill would eliminate a “backward” incentive for excessive compensation, which the bill defines as more than 25 times that of the lowest paid workers at the company.
Please take a look at a chart (below) by the Economic Policy Institute showing the total economy’s productivity over more than half a century vs the real hourly compensation of production/non-supervisory workers in the private sector.
To understand the impact of the incentives that our tax code creates, see a report by the Institute for Policy Studies. It documents 25 corporations that paid their CEOs more than the entire company paid in federal income taxes.
There’s a petition you can sign at DKif you so desire.
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