Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Pro-Austerity Ceos Rake in Taxpayer-Subsidized Pay

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Pro-Austerity Ceos Rake in Taxpayer-Subsidized Pay

Article excerpt

Laurence Fink, the 60-year-old CEO of Wall Street money manager BlackRock Inc., wants the retirement age raised to 70. In one TV interview, he explained that we could all wait a few more years before collecting Social Security because most of us have jobs where we just "sit around."

Now, everyone is entitled to their opinion -- even if it reveals a lack of familiarity with life outside their executive suite. But what makes Mr. Fink's views particularly hard to swallow is that ordinary Americans who rely on government retirement benefits are actually subsidizing his pay.

While the leader of the world's largest money manager sits around lecturing all of us to tighten our belts, we're padding his pockets. How can this be?

The current tax code lets corporations deduct from their income taxes unlimited amounts of executive compensation, as long as they say this pay is based on "performance." As a result, huge companies like BlackRock have an incentive to dole out massive stock options and other so-called "performance" bonuses. In other words, the more they pay Fink and other top executives, the lower their tax burden gets.

And the rest of us? We get stuck with the bill.

BlackRock is one of the biggest beneficiaries of this tax break. Between 2009 and 2012, Fink took home $119 million in fully deductible "performance pay." That translates into a corporate tax break of $42 million. While pocketing this taxpayer-subsidized pay, Fink was so moved by belt-tightening fervor that he joined "Fix the Debt," a lobby group calling for cuts to Social Security and Medicare.

The Fix the Debt outfit has recruited an army of high-profile CEOs and corporations to carry the message that we must slash spending on our earned-benefit programs or face national economic ruin. Guess what they never mention? That large corporations routinely fatten the nation's deficit by exploiting the performance pay loophole and other gimmicks to avoid paying taxes. …

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