Do not get distracted by the claims by people who want your vote. Nothing has changed. The robbery of the wealth of the country continues. And the rhetoric aiding and abetting the robbery is going to get ramped up around corporate tax cuts.
Let’s start with the hardship sweeping the country…It’s been a very bad period for wages–except for corporate CEOs:
In the boardroom, it’s as if the Great Recession never happened.
CEOs at the nation’s largest companies were paid better last year than they were in 2007, when the economy was booming, the stock market set a record high and unemployment was roughly half what it is today.
The typical pay package for the head of a company in the Standard & Poor’s 500 was $9 million in 2010, according to an analysis by The Associated Press using data provided by Equilar, an executive compensation research firm. That was 24 percent higher than a year earlier, reversing two years of declines.
Executives were showered with more pay of all types — salaries, bonuses, stock, options and perks. The biggest gains came in cash bonuses: Two-thirds of executives got a bigger one than they had in 2009, some more than three times as big.
And from The Wall Street Journal today:
CEOs of media companies claimed four of the top 10 spots: Mr. Dauman at Viacom, plus the chiefs of CBS Corp., Walt Disney Co. and Time Warner Inc.
Another media CEO, News Corp.’s Rupert Murdoch, ranked 52nd, with total compensation valued at $16.5 million. A spokesman for News Corp., which owns The Wall Street Journal, declined to comment.
Mr. Dauman, Viacom’s CEO since 2006, achieved his $84.3 million largely due to one-time equity awards valued at $54.3 million as part of a five-year employment contract signed in April 2010. In extending his contract, directors cited his operational and financial leadership.
Of course, the rules for CEOs are different than for regular people. Especially if you are the CEO of Wal-Mart, as the Times’ Gretchen Morgenson pointed out yesterday:
In a proxy statement filed a few weeks ago, Wal-Mart’s compensation committee said it had replaced a crucial metric for assessing executives’ performance: same-store sales, referring to stores that have been open for at least a year. Instead of that measure, Wal-Mart is using total sales companywide, or at its major units, Wal-Mart Stores and Sam’s Club.
Why? The change was “intended to align our performance share goals more closely with our evolving business strategy, which emphasizes productive growth, leverage and returns,” Wal-Mart said.
The timing was certainly curious. The switch came amid a sustained decline in Wal-Mart’s same-store sales, which have been falling for nearly two years. The company’s total sales, however, rose 3.4 percent in the latest fiscal year.
Shifting the goal posts meant more money for Mr. Duke in the latest fiscal year than he would have received under the old arrangement. His compensation totaled $18.7 million, more than $16 million of which was performance-based.
While Wal-Mart was changing the standards for its CEO so he could rake in a lot more money, you would not be surprised to learn that the company–which discriminates against women, is a habitual tax dodger, leads corporate efforts worldwide to undermine wages, exploits children in Mexico, and is viciously anti-union–would actually cut benefits for its workers:
But Mr. Flickinger said Wal-Mart’s pay packages seemed especially unfortunate in light of the company’s decision late last year to end its longtime profit-sharing programs for lower-level workers. This arrangement was created by Sam Walton, the company’s founder, and was a source of considerable pride to him.
“Profit-sharing has pretty much been the carrot that’s kept Wal-Mart headed forward,” Mr. Walton wrote in his 1992 autobiography, “Sam Walton: Made in America.”
Last year, before Wal-Mart eliminated that profit-sharing program, it said it paid roughly $1.1 billion in profit-sharing and 401(k) matches to employees. In the future, it will offer only the 401(k) match.
“Taking away profit-sharing was the ultimate Ebenezer Scrooge story of the last holiday season,” Mr. Flickinger said. “Ebenezer makes all the money, and all the poor Cratchits working in the Wal-Mart stores become poorer and poorer.” [emphasis added]
Keep all that in mind as you hear about the CEO push to lower the corporate tax rates. Oh, you know, you’ve heard the whining and phony arguments–the reason companies here can’t compete and create jobs is because the corporate tax rates are too high. Crap.
Actually, corporate treasuries are stuffed full of cash–the CEOs simply have no reason, or no pressure, to give people jobs, especially when their own pay needs are the number one priority. Corporations are calling for a "tax holiday" on foreign profits to stuff the corporate tills even more–but Rep. George Miller, one of the honest members of Congress, told me that said he remembers the 2004 deal and he told me that he asked CEOs in Silicon Valley what they did with the repatriated profits and they admitted to him that almost none of it went to job creation.
So, you will hear big businesses, trying to hide in the weeds as "small businesses, whining about paying higher taxes in a new system:
Some large U.S. businesses are organized as pass-throughs, including private-equity, law and accounting firms. Democrats have pointed to Kohlberg Kravis Roberts & Co. and PricewaterhouseCoopers as examples of firms organized as small businesses that don’t fit the mom-and-pop stereotype. KKR and PwC declined to comment.
"We’re talking about business income here. Why not have the large pass-throughs … pay a corporate rate?" Sen. Max Baucus (D., Mont.), the Senate Finance Committee chairman, asked at a hearing on Tuesday.
Cutting corporate taxes is harmful to the economy–unless of course you are a CEO–as the Citizens for Tax Justice points out:
Corporate tax reform can also improve economic growth. For example, curbing tax subsidies that encourage the export of American jobs will make hiring Americans more attractive. Getting rid of loopholes that distort corporate investment decisions right here in the USA will make our economy more productive.
Corporate leaders say a low corporate tax rate will make America competitive. They’re wrong. The evidence shows that our competitiveness depends on sound infrastructure, education and other public investments that are not possible if corporations that benefit from them don’t pay enough in taxes.
And CJT has called the bluff of both parties, outlining why corporate tax reform should first focus on closing loopholes and subsidies, not cutting rates.
So, let’s be clear: the robbery is continuing in America. The deficit and the debt hysteria are a phony distraction.