Monday, August 27, 2012



Every now and then, an idea comes along that is so logical, and contributes to solving so many problems, that you wonder why it hasn’t been done. 

I saw an idea like that a couple of weeks ago, when I read an op ed piece in the New York Times that would cut our military costs dramatically, improve the performance of military support services, reduce the probability of going to war, clean up some of our urban blight, solve some of our infrastructure problems, provide needed services we now say we can’t afford, make citizenship more meaningful to young people and go a long way towards diminishing the very different worlds in which privileged and less privileged young people live.

Let’s hope the idea gets some momentum.


Every now and then you come across a fact that truly blows the mind. 

Here’s one.

26 CEO’s among the 100 highest paid corporate chief  executives made more money in 2011 than their companies paid in federal income taxes in the same year. The group earned average total compensation of $20.4 million, a 23 percent increase over the average in the prior year. 

Here’s the list:

Abbott Laboratories (NYSE:ABT)
Advanced Micro Devices (NYSE:AMD)
Anadarko Petroleum (NYSE:APC)
Boeing (NYSE:BA)
Broadcom (NASDAQ:BRCM)
Chesapeake Energy (NYSE:CHK)
Citigroup (NYSE:C)
Cooper Industries (NYSE:CBE)
Danaher (NYSE:DHR)
Devon Energy (NYSE:DVN)
FirstEnergy (NYSE:FE)
Ford Motor (NYSE:F)
Halliburton (NYSE:HAL)
International Paper (NYSE:IP)
Leucadia National (NYSE:LUK)
Marathon Oil (NYSE:MRO)
Marsh & McLennan (NYSE:MMC)
Motorola Mobility (NASDAQ:GOOG)
Newell Rubbermaid (NYSE:NWL) (NYSE:CRM)
Travelers Companies (NYSE:TRV)
Tyco International (NYSE:TYC)

The Institute for Policy Studies, which produced the report, makes the point that the US tax code includes lots of provisions encouraging excess pay, including unlimited tax deductibility of executive pay, unlimited deferred compensation, and preferential treatment of carried interest  among others items. 

The study goes on to note that 19 of the 26 companies operated subsidiaries in tax havens and that the firms, combined, operated a total of 537 tax haven subsidiaries.

The report includes lots of other mind numbing figures, including how much tax loopholes cost each of us.  And, as you would expect, the report has generated furious denials and denunciations.

 At some point in every controversy, I lose interest in the detail and only want to know the answer.  

In this case, it seems to me that two conclusions are crystal clear.  The tax code is completely screwed up and needs to be rewritten.  And corporate America needs new governance rules.