To start off, I don’t mind paying taxes. Taxes are my dues to live in a country where we get clean water, decent roads, communications systems, you name it. The fact that many of the things we enjoy aren’t always working right has more to do with people evading taxes and, more important, a tax system that has let the elite avoid paying hundreds of billions of dollars towards making our society a decent place to live.

   But, the elite don’t believe they should pay taxes. And this isn’t a partisan point–it was pretty disturbing to watch how many high-level Administration appointees seemed to have problems paying their taxes. And these weren’t working stiffs–they were, and are, all people who have earned a lot of money.

   This all comes into sharp relief today with this piece in The Wall Street Journal:

Dozens of U.S. corporate executives are losing a controversial benefit — and gaining bigger tax bills.

As the recession fuels outrage over executive-pay excesses, 43 companies in Standard & Poor’s 500-stock index will stop paying certain taxes for their top brass this year, according to a review of 2009 regulatory filings for The Wall Street Journal by compensation-research firm Equilar Inc.

The change comes amid increased investor criticism of the "gross-up" payments, which cover the tax bite for a variety of perks, including club memberships and personal use of corporate jets, as well as "golden parachutes" following takeovers.

   Here is how that scam worked. As a high-level exec, it wasn’t enough that the company would actually pay for corporate jet use for your family or elite club memberships. No, that truly oppressed exec, who was already pocketing millions of dollars in pay and benefits, had to also have the taxes on those perks paid by the company (the perks are considered income). Actually, those paying for that nice little extra perk are the shareholders and, indirectly, the workers who would get less of a pay hike or maybe see less health care coverage payment because there simply was less money in the till.

   An example:

The corporate tab for gross-ups on excise taxes can be huge. That’s partly because reimbursements for taxes count as taxable income, prompting most businesses to also cover those payments. If Tiffany had been acquired on Jan. 31, 2008, for example, it would have owed Chief Executive Michael Kowalski $7.7 million in total gross-up payments on severance valued at $20.8 million, according to the company’s 2008 proxy statement.

Last year, the jeweler reimbursed Mr. Kowalski for $136,560 in taxes on a company-paid life insurance premium of $162,175. In 2008, 60% of S&P 500 companies provided gross-ups on perks like club memberships and personal use of corporate jets, according to another Equilar study.

   This is my favorite on-the-money quote:

But activist investors contend that tax reimbursements represent another example of treating the top brass like royalty.

"There’s no pay-for-performance connection at all," says Richard Ferlauto, director of corporate governance and pension investment at the American Federation of State, County and Municipal Employees union. "All Americans are subject to taxes except executives who have found a way to avoid them."

   Precisely (Ferlauto and a dedicated coterie of labor movement folks have been all over this as part of a campaign around corporate governance). The corporate elite simply don’t see themselves like the rest of us. Which is one reason we got into this mess–a collapse of the economy does not mean financial destitution for the elite so they can carry on with their moronic financial manipulations with no fear of the consequences. It’s not only…eh…gross…but immoral.