Next time you write your tax check to the Internal Revenue Service, imagine which multibillion-dollar corporation may get some of your hard-earned pay.
How about drugmaker Abbott Laboratories, which in 2011 claimed a $586 million tax refund for its 64 subsidiaries operating in 16 countries considered tax havens?
Or maybe Chesapeake Energy, a company that last year made $2.8 billion in pre-tax U.S. profits—but whose effective tax rate over the course of its 23-year history has averaged only about 1 percent?
Abbott and Chesapeake Energy are just two of the mega-corporations taking advantage of tax policies that reward offshoring and set lower tax rates for billionaires than for average workers, according to Institute for Policy Studies (IPS). The annual IPS report, “Executive Excess 2012: The CEO Hands in Uncle Sam’s Pocket,” finds:
- Of last year’s 100 highest-paid U.S. corporate chief executives, 26 took home more in CEO pay than their companies paid in federal income taxes.
- The CEOs of these 26 firms received $20.4 million in average total compensation last year—a 23 percent increase over the average for last year’s list of 2010's tax-dodging executives.
- The four most direct tax subsidies for excessive executive pay cost taxpayers an estimated $14.4 billion per year—$46 for every American man, woman and child.
- Last year, 57 CEOs saved more than $1 million on their personal income tax bills, thanks to Bush-era tax cuts.
- CEO tax breaks could have paid for 211,732 teachers, instead it bought yachts and mansions.
Meanwhile, the report notes, budget cuts nationwide have axed 627,000 public service jobs since June 2009. Between schools, health clinics, fire stations, parks and recreation facilities—virtually no public service has gone unsqueezed. Tax dollars haven’t seemed this scarce in generations. Yet tens of billions of dollars are getting diverted to the pockets of profit-rich corporations and their highly paid CEOs.
Check out the full report here.