Welfare Recipients in the 21st Century

Many of our mega-corporations are, in fact, welfare recipients if you define that term as getting more from the government than you contribute to the government. The Institute for Policy Studies has released this year's report on Executive Excess Compensation.  It's a doozy. Consider the following from the report on the 100 public companies that paid their CEOs the most:

• 25 of these companies last year paid their chief executives more than they paid Uncle Sam in federal income taxes.
• The average CEO received 325 times the pay of the average worker; this is up from 263 times in the previous year.
• CEOs' salaries went up 27.8% for the year, the average Joe's 3.3%.
• In 1945 corporations paid 35% of the fed's revenue, last year it was 9%.
• In 1952 the effective corporate tax rate was 52.8%, now it's 10.5%.

The primary reason for the low tax is offshoring. Essentially, companies establish subsidiaries in a low tax foreign country and make accounting entries so that the subsidiary makes a lot of money by 'selling' things to the U.S. parent at inflated fees. Ergo, the U.S. company has higher costs to deduct on their taxes. Two of the largest banks bailed out by us were Citibank and Bank of America. Citibank has 427 foreign subsidiaries, BofA 115.

The authors of the report remind us that these companies benefit by being U.S.-based. "They utilize our taxpayer-funded infrastructure for transportation. They tap into government-sponsored research and subsidies for technological innovation. They expect the U.S. law enforcement and judicial systems to protect their intellectual and physical property. And they rely on the U.S. military to defend their assets abroad.

U.S. corporations also benefit from the public education of their workforces. In fact, 16 of the 25 CEOs included in this study received at least a portion of their post-secondary education in taxpayer-supported public universities. Yet these same corporations remain content to let others pay the bills.

We have, in short, a corporate tax system today that works for top executives — and no one else."