Fix The Debt is a coalition of corporations pushing for a “grand bargain” that would reduce debt by changing Social Security, Medicare and the tax code. Oddly, the coalition spends more time talking about what other people should give up — namely, Social Security benefits — than about what its own members would give up in higher taxes.
Today the Campaign for America’s Future and the Institute for Policy Studies comes out with a new report, that raises the question if these CEOs are more interested in fiscal responsibility or gaming the system for themselves. The title: “Fix The Debt CEOs Enjoy Taxpayer-Subsidized Pay.”
The reports finds that: “During the three-year period 2009-2011, the 90 publicly held corporate members of the austerity-focused ‘Fix the Debt’ lobby group shoveled out $6.3 billion in pay to their CEOs and next three highest-paid executives. These 90 Fix the Debt member firms raked in at least $953 million — and as much as $1.6 billion — from the ‘performance pay’ loophole between 2009-2011 … America’s top CEOs are pocketing massive taxpayer subsidies at the same time they’re pushing austerity cutbacks in government programs that benefit ordinary citizens … If Fix the Debt CEOs were serious about addressing our nation’s fiscal challenges, they would push for greater fairness in the tax code, including the elimination of entitlement programs benefiting CEOs like the ‘performance pay’ loophole.”
Fix The Debt does support tax reform, but it is very vague about what it means by that. It’s core principles are paper-thin and suggest no real sacrifice for corporations: “…comprehensive and pro-growth tax reform, which broadens the base, lowers rates, raises revenues, and reduces the deficit.”
Fix The Debt also recently touted the latest proposal from Alan Simpson and Erskine Bowles, describing its tax reform component as a plan that would “dramatically reduce the size and number of tax expenditures in the code, sharply reduce rates, improve overall simplicity and move toward a territorial system to promote growth and generate revenue.”
For corporations to back a “territorial system” is not exactly an act of self-sacrifice. As Citizens for Tax Justice explains: “A ‘territorial’ tax system is a euphemism to describe a tax system that exempts offshore corporate profits from the U.S. corporate tax. U.S. corporations are already allowed to ‘defer’ (delay indefinitely) paying U.S. taxes on their offshore profits until those profits are brought back to the U.S. This creates an incentive for U.S. corporations to shift operations (and jobs) offshore or just disguise their U.S. profits as offshore profits so that U.S. taxes can be deferred. Completely exempting those offshore profits from U.S. taxes would obviously increase the incentives to shift jobs and profits offshore.”
Of course, these corporations insist that expanding a massive tax loophole is not their intention. But as you read our new report, and see how adept these CEOs are at gaming the current tax code, you might want to see a little more hard evidence from the Fix The Debt executives that they are willing to give up something of their own in order to achieve what they claim they want.