Monday, March 3, 2014

Corporate Welfare Fuels CEO Pay

Good Jobs First, a Washington, D.C.-based research group, has been tracking the subsidies that state and local governments shell out to businesses (in the name of “job creation”) ever since 1998. They developed their own “Subsidy Tracker” database. Findings from their new report is the most thorough analysis to date of corporate welfare.

America’s largest corporations, the study shows, are receiving the bulk of the subsidies that states and localities distribute. And almost all the big names of Corporate America — from Boeing and IBM to Alcoa and Google — have been collecting our tax dollars.

Average Americans, in effect, have been directly subsidizing very big and very profitable companies that need no subsidizing at all. And those excessive paychecks that go to the CEOs of these companies? Our tax dollars are pumping them up ever higher.

The three biggest players at the Carlyle Group (William Conway Jr., David Rubenstein, and Daniel D’Aniello) will split $750 million for their 2013 private equity “labors.” Their pay for one year's work. But thanks to a convenient loophole, these private equity wheelers-and-dealers face just a 23.38 percent federal tax on their tens of millions in carried interest, a rate well off the 39.6 percent rate on ordinary income over $450,000.

1 comment:

  1. UPDATE:

    The Bush tax cuts expired on January 1, 2013 -- so the capital gains tax rate went back up from 15% to 20%. I believe that ObamaCare added a 3.8% surtax to capital gains to help expand Medicaid, so it's 23.8%, not 23.38%

    But either way, it's still lower than the top marginal rate of 39.6% on income over $400,000 ($450,000 for married couples). And capital gains is also exempt from any Social security taxes, while 95% of all wage earners pay this tax on 100% of their earnings.

    >>> Read >>> Taxes: How Congress Lets the Rich Pay Less