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THESE COMPANIES PAY EXECUTIVES MORE THAN THEY PAY IN TAXES  
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Sarah Anderson, William Rice and Zachary Tashman
March 13, 2024
inequality.org
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_ Tesla, Ford, Netflix, and T-Mobile are among scores of profitable
U.S. firms that pay their top executives more than they pay in federal
taxes. _

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Corporate tax dodging and CEO pay have both gotten so far out of
control that a significant number of major U.S. companies are paying
their top executives more than they’re paying Uncle Sam. 

Tesla is perhaps the most dramatic example. Over the period 2018-2022,
the electric car maker raked in $4.4 billion in profits but paid no
federal income taxes. Meanwhile, Tesla CEO Elon Musk became one of the
world’s richest men. 

When it comes to fleecing taxpayers while overpaying executives, Tesla
is hardly alone. A new report
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co-authored for the Institute for Policy Studies and Americans for Tax
Fairness analyzes executive pay data for some of the country’s most
notorious corporate tax dodgers. 

What did we find? In addition to Tesla, 34 other large and profitable
U.S. firms — including household names like Ford, Netflix, and
T-Mobile — paid less in federal income taxes between 2018 and 2022
than they paid their top five executives.

Another 29 profitable corporations paid their top executives more than
they paid Uncle Sam in at least two of the five years of the study
period. 

LEARN MORE
CEO pay solutions

One company on our list stands out for the infamous role
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executives played in the 2008 financial crisis: American International
Group. Back then, the insurance giant ignited a firestorm by pocketing
a $180 billion
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bailout and then announcing plans to hand out $165 million
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to the very same executives responsible for pushing the company —
and the nation — to the brink of collapse.

Today, AIG is playing the same greedy game of overpaying its top brass
and sticking taxpayers with the bill. Between 2018 and 2022, the
company paid its top five executives more than it paid in federal
income taxes, despite collecting $17.7 billion in U.S. profits. In
2022, CEO Peter Zaffino alone made $75 million.

Lavish executive compensation packages and skimpy corporate tax
payments are not unrelated phenomena. Executives have a huge personal
incentive to hire armies of lobbyists to push for corporate tax cuts
because the windfalls from these cuts often wind up in their own
pockets. 

The 2017 Republican tax law slashed the corporate tax rate from 35
percent to 21 percent and failed to close loopholes that whittle down
IRS bills even further. Many large, profitable corporations ended up
paying no federal taxes at all
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Corporations took the savings from those tax cuts and spent a
record-breaking $1 trillion
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stock buybacks, a financial maneuver that artificially inflates the
value of executives’ stock-based pay. 

Wealthy executives became even wealthier while the nation lost
billions of dollars in corporate revenue that could have been used to
lower costs and improve services for ordinary people. Until this
self-reinforcing cycle is broken, we’ll have a corporate tax and
compensation system that works for top executives — and no one else.

GET THE FULL REPORT
More for Them, Less for Us

What can we do to break this cycle? 

Congress can tackle the entwined problems of inadequate corporate tax
payments and excess executive pay on several fronts. Raising the
corporate tax rate to 28 percent (just halfway back to Obama-era
levels) would generate $1.3 trillion in new revenue
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the next decade.

Congress must also close loopholes and eliminate wasteful tax breaks,
for instance by removing the incentives for American firms to shift
profits
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production offshore.

Policymakers also have a wealth of tools
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curb excessive executive pay, from tax and contracting reforms to
stronger regulations to rein in stock buybacks and banker bonuses. 

We know we need change when corporations are rewarding a handful of
top executives more than they are contributing to the cost of public
services needed for our economy to thrive. 

_Sarah Anderson directs the Global Economy Project and co-edits
Inequality.org at the Institute for Policy Studies. William Rice is a
senior writer and Zachary Tashman is a Senior Research and Policy
Associate at Americans for Tax Fairness. This op-ed was distributed by
OtherWords.org._

_Inequality.org [[link removed]] has been tracking
inequality-related news and views for nearly two decades. A project of
the Institute for Policy Studies since 2011, our site aims to provide
information and insights for readers ranging from educators and
journalists to activists and policy makers._

_Our Inequality.org contributors come from the United States and
around the world. Our focus throughout: What can we do to narrow the
staggering economic inequality that so afflicts us in almost every
aspect of our lives?_

_If you would like to support and help expand our work, please
consider making a donation. Thank you!_

* taxes
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* Corporate taxes
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* economic inequality
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