Felix said, ” There are lots of ways that the authors of the study could have tried to back up that assertion. For instance, they could have taken a set of CEOs and split them into two groups: those who are paid more than their companies pay in taxes in Group A, and those who are paid less than their companies pay in taxes in Group B. Then they could have compared whether CEO salaries in Group A were higher than CEO salaries in Group B.”

There are some people who would rather have those figures to make the claim of the title. (Like the readers here, tax lawyers and Corporations) However, the people are very aware CEOs are overcompensated. Most are aware that although the tax rate for Corporations is 35%, the Corporations use tax shelters and havens and phony overseas PO boxes as ‘headquarters’ to avoid taxes.

The bulk of the story hit home as it was intended and like it or not, there was too much truth in it for the made up spin parts to fail. I do hope someone does the work and comparisons though! Corporations don’t have to reveal what they actually pay and you can be darn sure they won’t be making that big reveal to back up their whining that the report got it wrong…

FifthDecade, there is a famous bit in Adam Smith about collusion but hey facts, who cares, right?

Merchant banks push for CEOs who, because of which Business School and Professor they had, are favourable to mergers – which is where the banks make big money. Business School graduates and Professors slip in and out of the Merchant banks and the Corporations, the remuneration committees are largely made up of the same type of people who, while voting on remuneration for CEO X, are also supporting their own future pay claims.

When anyone suggests a CEO pay reduction, the groupthink mentality reverts to the bankers’ favourite “But if we don’t pay the highest salaries people will move elsewhere!” That’s a bluff that really needs calling, because at the moment, shareholder interests fold almost instantaneously. In banking, would people really move elsewhere? What, to another bank in trouble? They’re all in trouble. They all need to save costs. But the CEO cadre have the shareholders in a state of permanent fear.

As for non-Finance CEOs: do they really believe that there are none amongst their underlings competent people who would take over their jobs for less salary?

CEO pay may well be too high.
Unfortunately the report in question presents no evidence that it is.
That is the point Felix is making.

I only remember the IPS for two reasons
1) Allende’s ambassador to Washington then defense minister (some guys get all the cushy jobs) Orlando Letelier worked there until he was blown up by Pinochet’s agent.
2) the cofounder Marcus Raskin is the father of this guy I knew in high school and college (Jamin Raskin a Maryland state senator last seen trying to get a medical marijuana bill passed — really medical not like the California pot for all law). That makes Marcus Raskin the father in law of a member of the Fed board of governors.

The fact that you see this as a winning argument is really part of the problem.

Look you are right that the fact that for some cherrypicked subset, one number is higher then another really doesn’t mean a thing. But the fact of the matter is that the top 1% controls an absurd portion of the nations wealth – and for every Gates, Jobs, or Buffet there is creating value, there is a Nardelli or Fiorina destroying it. CEO pay is too high, and if we are not going to tax corporate profits (the vast majority of which flow to the managerial/investor class) then we need lower CEO pay and higher capital gains taxes, lest we become some sort of Mexican style pleutocracy.

If a company spends more lobbying than they did on taxes and also has overpaid CEOs (no I’m not jealous, they are simply paid too much) and even during a recession raises and bonuses were maintained, there is something terribly wrong with that picture.

IPS is distorting the picture and that really is too bad, because there are many very valid points to be made for tax reform to close loopholes, maintain and add jobs in America and for eliminating corporate tax credits and deductions with a fair and absolute tax rate.

I am thinking, given the push by Republicans to lower the Corporate tax rates (to make more jobs of course, being the lobbyists have stated that’s the reason, uhhuh) that this was a badly worded sound bite to push back, that gave results as intended given the comments.

Too bad they didn’t just use the stats correctly to make the point, but then… maybe they should have used pretty pictures, to obscure the data, as the republicans have been doing.

http://www.gop.gov/resources/library/doc uments/jobs/theplan.pdf

http://economix.blogs.nytimes.com/2011/0 5/31/are-taxes-in-the-u-s-high-or-low/

http://www.oecd.org/document/35/0,3746,e n_2649_37427_46661795_1_1_1_37427,00.htm l

http://www.taxpolicycenter.org/taxfacts/ displayafact.cfm?Docid=263&Topic2id=70

Did they account for this (just as one example)? I’ve no idea for the report doesn’t tell us.

Tax losses in previous years? Pay as in pay or pay as in options cashed in that year which may have come from long term incentive plans?

As a piece of economic research the IPS have just shown themselves very good at hyperbolic political propaganda.

Nothin’ else.

Pay is supposedly a demand/supply market; taxes are computed based on profits, excise charges, regulatory issues, etc. If profits are low, taxes will be low, too. But that doesn’t mean the CEO’s actions are worthless or even worth less.

I spend more money on my pets’ veterinary care than I spend on health club memberships. Or on my clothes, for that matter, in any single year. That just means I have pets. It doesn’t put a value on them.

A ≠ B. Congratulations, Dr. Watson.