Executive Excess, Corporate Greed at the Expense of Women and Families

A new report by the Institute for Policy Studies reveals that of last year’s 100 highest-paid corporate CEOs, 25 took home more than their company paid in 2010 federal income taxes. The report found that these corporate chief executives – CEOs of International Paper Company, Prudential, General Electric, Verizon, Boeing, and eBay, among others -- averaged $16.7 million in pay. At the same time, a combination of tax shelters and loopholes allowed those companies to avoid an average of more than $400 million each in federal taxes.   

We’re dealing with two different factors here, both shameful when unemployment and poverty are at historic levels. First, CEO pay at this level insults American workers, including those who want, but can’t find, jobs. While unemployment stagnates above 9%, the gap between CEO and average U.S. worker pay rose from 263-to-1 in 2009 to 325-to-1 last year. Around 1980, the gap was just about 40-to-1.

Second, millionaires and corporations have so far not been required to contribute a penny in additional revenues toward deficit reduction. There are many options for raising significant revenue from those with the greatest ability to pay. Proposals in President Obama’s budget to reduce tax breaks for the oil and gas industries and corporations that move jobs and profits overseas, close other corporate tax loopholes, and crack down on tax cheats would raise about $350 billion over 10 years. Creating new tax brackets for taxpayers with annual income of $1 million or more and taxing income from capital gains and dividends at the same rate as income from work for those wealthy taxpayers, as proposed by the Fairness in Taxation Act (H.R. 1124) would raise about $784 billion over 10 years. A 0.5 micro tax on financial transactions (such as stock trades) would raise about $77 billion per year and could discourage short-term speculation.

So far, the burden of deficit reduction has fallen entirely on the spending side of the budget, jeopardizing vital programs for women and their families. In early August, President Obama and congressional leaders agreed to a deal to raise the debt ceiling (and avert a disastrous default) that includes steep spending cuts but does not touch the tax breaks enjoyed by millionaires and corporations. The Budget Control Act cuts discretionary spending by nearly $1 trillion over the next 10 years and creates a congressional super-committee directed to develop a plan to cut the deficit by an additional $1.5 trillion.

If a majority of the members of the super-committee (6 Democrats and 6 Republicans) approves a plan, Congress must vote on it by December 23, 2011 – no amendments or filibusters allowed. The super-committee can propose cuts to any program – including safety net programs vital to women and families in every state. The committee also can propose reducing tax breaks for millionaires and corporations, but don’t hold your breath; some Republican leaders have already declared that they won’t even consider reducing corporate subsidies or addressing the growing economic inequality between the rich and the rest of us.

To work for women and their families, any plan for deficit reduction has to protect programs vital to the wellbeing of women and their families, make millionaires and corporations pay their fair share, and promote job growth. That’s the way to lower deficits and ensure a stronger economy in the long term.