Two Washington think tanks have some jarring figures in a report outlining the case for corporate tax reform: Seven of the top 30 US firms pay more to their CEOs than they pay in federal income tax, according to the Institute for Policy Studies and the Center for Effective Government, and tax refunds gave the seven firms an effective tax rate of -2.5%, for a gain of $1.9 billion. All seven firms—Boeing, Ford, General Motors, Chevron, Citigroup, Verizon, and JPMorgan Chase—are highly profitable, reporting more than $74 billion in combined pretax profits last year and paying their CEOs an average of $17.3 million, according to the report, which found that 29 of the 100 highest-earning chief executives in America earned more than their firms paid Uncle Sam.
The billions in taxes that the firms are saving aren't being used to expand operations and hire workers, but to repurchase stock and finance corporate mergers, according to the report, which calls for the government to overhaul the "deeply flawed" corporate tax system and crack down on the use of tax havens. Out of the seven companies, all those that have commented on the report say they abide by all tax laws; one of them, Verizon, denies that its CEO makes more than it pays in federal taxes, reports Reuters. Chevron says last year's tax bill "was much lower than normal" for assorted reasons, and Ford and GM say huge losses suffered several years ago are reducing their current tax bills. (Read more corporate tax stories.)