D. Michel Mason: Pay and profits

May 10, 2013 

Pay and profits

In her May 4 Other Opinion piece “Pro-austerity CEOs rake in subsidized pay,” Sarah Anderson claimed that it’s unreasonable for the corporate tax code to allow unlimited deduction of executive compensation. That might be true if our corporate tax were intended to tax corporate revenues, but it is not. Our tax code is designed to tax corporate profits.

Remember the equation profit equals revenue minus expenditures? I suppose Anderson would like to ignore the fact that executive compensation, like payroll or raw materials, is an expenditure. She also seems to think that companies intentionally run up their executive compensation to save tax money. How it makes sense to give your CEO a million dollars just to avoid giving Uncle Sam $350,000 isn’t explained. She also ignores the fact that the executive being compensated must still pay personal income tax on such compensation. I suppose she thinks executive pay deserves to be taxed twice.

Worse than any of this, though, is the fact that she claims that the rest of us “get stuck with the bill.” Apparently anytime one person is not taxed for something, she believes the rest of us pay for it. That is obscene.

D. Michel Mason, Raleigh

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