Did you know that United States taxes are structured to reward corporations for paying big executive salaries? It’s true: under the current U.S. tax code, corporations get to deduct the cost of executive pay up to one million dollars for each corporate executive. This provides an incentive for corporate boards to award big-buck salaries to corporate honchos, since Uncle Sam agrees to cut the corporation’s tax bill proportionally.
Yesterday, Senator Blanche Lincoln of Arkansas introduced Senate Amendment 2905 to the health care reform bill currently before the Senate. Lincoln’s amendment would cut the executive pay tax deduction down to $400,000 a year for each executive in a health insurance company participating in the new national health care exchange system. Corporations could still pay their executives more than $400,000 — they’d just have to pay taxes on any amount above that. The change in the tax structure would provide incentives for corporations to cut executive costs, and because the tax change would be system-wide, any objection about executives fleeing to rival corporations would not apply. Any additional tax money coming in to the federal government would be dedicated to the Medicare Trust Fund.
In a vote yesterday, the Lincoln Amendment got majority support in a roll call vote, with 56 Senators voting in favor and 42 voting against. But the Amendment needed sixty votes to pass, and so it failed.
You’d expect Republicans to vote in favor of continuing corporate tax breaks for million-dollar executive pay packages, and that was the case with the notable exception of Maine Republican Senator Olympia Snowe, who voted for the Lincoln Amendment.
You might expect Democrats to vote in favor of cutting back corporate tax breaks for exorbitant executive pay packages, and that was mostly the case, but there were a number of exceptions — exceptions that allowed the Lincoln Amendment to go down in failure. Senators Tom Carper (D-Money), Jeff Bingaman of New Mexico and Kent Conrad of North Dakota voted in favor of continued lush tax breaks for executive pay by health insurance corporations. Senator Joseph Lieberman (I-Self) joined these Democrats in keeping these executive pay loopholes open.
That half-assed proposal sucks. The Executive Pay Tax Deduction should be reduced or restructured for all corporations. How many executive titles can each corp give out???
Yes, but even that half-assed proposal — moving corporate tax structures in the right direction and putting the money away for a good cause — couldn’t pass the Senate. That tells us there’s nothing close to a functioning progressive coalition in the Senate.
why did it need 60 votes? was it brought up under special rules?
You missed a memo. After brutally demonizing the Democratic minority for the occasional filibuster when the Republicans ran the senate, the Republican minority no longer allows Anything to happen with less than 60 votes.
Obviously. Half assed. That they voted along party lines was no supprise. The Main Problem was you only put the stick to them. You need to attach that bi-partisan carrot in any such ammendment to get Repblicans to Break Ranks. The Other Problem is this: Do that and even more Democrats will break ranks. They are not as cohesive as the Republicans or they would pass whatever they wanted regardless of Republican Support. We need to Get those Blue Dogs Out!!!
It is unfortunate that with the current health care system, it will be the policy holders who will be paying these executive salaries and that there were plenty of Democrats willing to aid their corporate friends. Executives should not have special tax benefits as their incentive plans are typically quite generous in any case.
Sounds like business as usual to me. The privileged get the perqs, the rest of us are jerks. We put up with this from day one (that’s why everyone wants to be “rich”) and even the LAW treats these people “differently”. When they rub our noses in it, we just ignore it and go about our little mundane lives. Look what’s happened since Bush took office: tax cuts for the wealthy (who can afford higher taxes) while we get nothing but more work, more debt, frozen wages and we run the risk of losing our menial jobs if we speak out or “have a bad attitude.” Face it – we’re sheep.
Here, try this on for size:
http://www.counterpunch.org/