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Are Taxpayers Bankrolling CEOs’ Pay?

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  • Description

    Institute for Policy Studies’ Scott Klinger on how companies get tax subsidies for CEO pay.

  • Duration 3:57
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Love this doesn't -- you know item in the -- I don't know what well we talk all the time about community budgets get its lasting -- and teachers in these jobs and health clinics to be close.

Get this there's a new report out by the Institute for Policy Studies -- sent tens of billions of our tax dollars.

I don't -- CEO pay me.

And the -- the CEOs that well the they have the tax breaks for the company -- clear is co author of the report and he joins us now.

Our -- Scott let's explain it first or help people understand what we're talking -- here because part of this is a payroll deduction isn't it.

Well thank you for having me Tracy would we did look at four different tax breaks to corporations get.

Ways they're allowed to write off there what we think is excessive CEO pay on their taxes.

There's a principal in business tax is -- businesses can deduct reasonable.

Business expenses and from the taxes -- dollar they deduct that save 35 cents on their taxes.

We defined what business reasonable means in terms of entertainment companies can't deduct skybox expenses are expensive.

Super Bowl tickets but they can deduct unlimited amounts of CEO -- We're not saying the company shouldn't be able to pay their CEOs and executives whatever they want -- is saying there should be limits on how much they can deduct from their taxes.

Can't this is not the -- corporations offers a -- many corporations not pay 35% back and they are effective rated in the day is much lower so the saving.

Maybe twenty cents on the dollar but that being said this is because of the tax code it is not because.

Companies are corporations are doing anything.

-- -- We're not saying any laws are being broken we're saying the tax laws are broken the tax code has broken and the way we compensate our executives is also broken.

But the way we compensate executives probably has a lot to do with the fact that corporations can afford lobbyists they could afford people down on Wall Street to get.

Breaks that they're looking for because the tax code -- become one big book of favors hasn't.

That's right and when that happens the rest of us pay -- we calculated that the subsidies they're given to corporations for their executive pay.

Because 46 dollars for every man woman and child in the United States.

A catalytic come down on CEOs or CEO pay because some CEOs actually deserve what they get paid.

I think the bigger story here is the fact that we subsidize so much stop just so that our congressional leaders can get reelected.

That's right it's of -- circular loop hole -- Campaign contributions financing the people are making the rules campaigns.

OK so what's solution to this and because of my is always to junk the tax code and start over but.

Many don't think that's right -- Well -- -- pretty large task and we now prefer I think some changes along the way one of them -- we think we need to have a national conversation about.

What's a reasonable level of executive pay.

Some people have mention the million dollars some of mentioned a half a million dollars.

Right now companies -- deducting and in some cases hundreds of millions of dollars -- executive.

But why did the nation's what are we discussed with the nation what is CEO should be paid isn't Matt and insider corporation discussion.

We're not discussing what the -- should be paid as I said we think corporations should pay their executives whatever they see that -- -- -- We're just stuck with the discussing what can be deducted from their taxes and in which the taxpayers pay -- of.

But again that comes back down to over -- -- entire tax code because you know as well as night.

The lobbyist from these high.

Big -- corporations are never gonna actually it'll let you lower those deductions and -- the entire thing is overhaul.

Data and they knew a lot of public pressure I think if there was level -- -- and we've we've certainly seen.

Concern both about to lack of payment of corporate taxes as well as CEO pay reach across the political spectrum it's not really a left right issue.

-- on many many Americans -- both sides are concerned about this.

-- you right this is a bipartisan problem the tax code is completely flawed.

Scott -- thank you so much for sharing your insights sir I.

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