Top corporations spent more on CEO comp, lobbying than taxes

Twenty-five of the best-paid chief executive officers in the U.S. earned more in salary and other compensation in 2010 than their companies' federal income tax expenses as disclosed in public filings, according to a report by the Institute for Policy Studies. The Washington-based nonprofit group's report, released today, examined 100 publicly traded U.S. corporations with the highest-paid CEOs. It found that companies whose CEOs' compensation exceeded reported tax expense in 2010 had average global profits of $1.9 billion. Companies in this group, according to the report, included EBay Inc., General Electric Co., Verizon Communications Inc., Boeing Co. and Dow Chemical Co. The tax expense reported in annual financial statements can differ from actual tax payments, which are confidential, for a variety of reasons. The group said its findings underscore the need for an overhaul of the U.S. tax code that would reduce the number of tax strategies available to companies, especially their ability to lower tax payments by parking profits overseas. “Tax reform has to close up some of these loopholes and the offshore system,” Chuck Collins, one of the report's authors, said in an interview. “We might be able to lower the overall corporate rate by broadening the base.” Eighteen of the 25 companies mentioned in the report operated subsidiaries in countries known as offshore tax havens, Collins said. Tax-Avoidance Practices Legislation proposed by SenatorCarl Levin, a Michigan Democrat, would eliminate many of the tax-avoidance practices used by companies in the study, Collins said. “Businesses and CEOs shouldn't be rewarded for so aggressively avoiding their responsibility to pay taxes,” he said. Twenty of the 25 companies on the institute's list reported spending more on lobbying Congress than they did on federal taxes, the organization said. Data for the report was taken from annual reports and other public filings. The institute's website says it works to promote a society based on “justice, nonviolence, sustainability and decency.” The report echoes some elements of a study released in May by Citizens for Tax Justice, a Washington-based nonprofit group backed by labor unions, which said 11 U.S. corporations reported $62 billion in domestic profits while paying a negative 3.6 percent tax rate in 2010. --Bloomberg News--