comments_image Comments

How Taxes Fund the Outrageous Pay of "Fix the Debt" CEOs Pushing Austerity on the Rest of Us

This scheme deserves the admiration of con artists everywhere.
 
 
Share

Crowdfunding, a practice which allows startup firms to raise money from small investors over the Internet, picked up steam in 2012 with some $2.7 billion invested, a study showed Monday.

 

 

You may have heard about a relatively recent player in the national debate over austerity-nomics. Fix the Debt portrays itself as a public interest group that is earnestly committed to fiscal responsibility and looking out for our children’s future (it always is about their touching concern for the children, isn’t it?) The group claims to support “a common sense solution to prevent disaster and renew America’s economic strength,” and it likes to give the public the impression that its membership is heavily made up of ordinary citizens and workers.

But actually, what it is is another elite-driven Pete Peterson front group consisting of billionaire CEOs lobbying for reverse Robin Hood fiscal policies that enrich themselves, immiserate the rest of us, and continue to run this country’s economy into the ground. Last week, the Institute for Policy Studies and the Campaign for America’s Future released a  report that reveals new information about the group’s hypocritical and self-serving agenda.

An earlier report on Fix the Debt  exposed the group’s extensive ties to defense contractors. The new one looks at the ways that 90 publicly held corporations that are members of Fix the Debt exploit loopholes in the tax code to help themselves to taxpayer subsidies worth many hundreds of millions of dollars. They happily rake in the taxpayer cash at same time they’re crying wolf about deficits and trying to pick the pockets of the rest of us by inflicting an austerity agenda. It’s a hustle so brazen that it deserves the sincere admiration of professional con artists everywhere.

The corporations in question are taking advantage of something known as the “performance pay” loophole. Seeking to rein in out-of-control CEO pay, in 1993, Congress capped the tax deductibility of executive pay at $1 million. But corporations quickly discovered a loophole: “performance-based” pay (mostly in the form of stock options) was exempted from the $1 million cap. And thus the madness of taxpayers’ subsidizing outrageous executive compensation continued.

Here are some of the deets about how the Fix the Debt crew is weaseling out of paying their fair share of the tax burden:

During the three-year period 2009-2011, the 90 publicly held corporate members of the austerity-focused “Fix the Debt” lobby group shoveled out $6.3 billion in pay to their CEOs and next three highest-paid executives.

These 90 Fix the Debt member firms raked in at least $953 million — and as much as $1.6 billion — from the “performance pay” loophole between 2009-2011. The exact full value of corporate windfalls from this loophole will remain impossible to compute until we have more complete mandated disclosure for executive compensation.

The biggest offenders include UnitedHealth Group, the nation’s largest HMO, which taxpayers have subsidized to the tune of at least $68 million in pay for its CEO, Stephen Hemsley; and Discovery Communications, which lined its pockets with $37 million in taxpayer subsidies for the pay of its chief executive, David Zaslav.

Meanwhile, these fine corporate citizens are demanding that government slash Social Security and other government programs that millions of Americans rely on — especially in a depressed economy where many need them more desperately than ever.

Ultimately, this report makes a very simple point:

If Fix the Debt CEOs were serious about addressing our nation’s fiscal challenges, they would push for greater fairness in the tax code, including the elimination of entitlement programs benefiting CEOs like the “performance pay” loophole.

But sadly, we are never ever ever ever going to see them do that. Like, ever.

Kathleen Geier is a writer and public policy researcher who lives in Chicago. She has written for The Washington Monthly, Salon, Reuters, and other publications. Find her on Twitter: @Kathy_Gee.

 
See more stories tagged with: