How Fast Food Giants Use Loopholes to Avoid taxes, Pay Execs Giant Pay, and the Workers Peanuts

[xchrom]

http://www.alternet.org/food/how-fast-food-giants-gorge-govt-subsidies-rake-monster-profits

The fast food industry is notorious for handing out lean paychecks to their burger flippers and fat ones to their CEOs. What’s less well-known is that taxpayers are actually subsidizing fast food incomes at both the bottom — and top — of the industry.

Take, for example, Yum Brands, which operates the Taco Bell, KFC, and Pizza Hut chains. Wages for the corporation’s nearly 380,000 U.S. workers are so low that many of them have to turn to taxpayer-funded anti-poverty programs just to get by. The National Employment Law Project estimates that Yum Brands’ workers draw nearly $650 million in Medicaid and other public assistance annually.

Meanwhile, at the top end of the company’s pay ladder, CEO David Novak pocketed $94 million over the years 2011 and 2012 in stock options gains, bonuses and other so-called “performance pay.” That was a nice windfall for him, but a big burden for the rest of us taxpayers.

Under the current tax code, corporations can deduct unlimited amounts of such “performance pay” from their federal income taxes. In other words, the more corporations pay their CEO, the lower their tax burden. Novak’s $94 million payout, for example, lowered YUM’s IRS bill by $33 million. Guess who makes up the difference?

[orpupilofnature57]

1. Poverty Profits

[B Calm]

2. Well it's not only fast food, Walmart is famous for

having the most employees on food stamps while reaping billions in profits.

It's past time to raise the minimum wage to a livable wage!

[Flatulo]

3. I guess it helps when your lobbyists are writing the tax code. nt

[Celebration]

4. Honestly, this article doesn't follow good logic

David Novak's pay is taxed at a higher rate than the corporate tax rate, so his pay adds more to our coffers than if it was held by the corporation. Now, if it was paid in dividends, that would be different because those are not deductible (but should be in my opinion).

I'd love to know how much more the lower wage employees could get, per employee, if his pay was half what it was.

Don't get me wrong, the salaries are out of whack for sure, but this article just is misleading.

[Enthusiast]

5. I'm struggling to not get you wrong................nt

[Enthusiast]

6. Kicked and recommended a whole bunch.....nt

[ConcernedCanuk]

7. Robber Barons been running the USA for over 200 years.

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.
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Ya think they are gonna stop now?

CC

[Laelth]

8. k&r for the truth, however depressing it may be. n/t

-Laelth

[gollygee]

9. And the libertarians would tell us

if there's no regulation at all and no minimum wage, workers would be paid better. I've had libertarians tell me that specifically. They think the answer isn't to close the loopholes, but to make the loopholes unnecessary. Crazy!

K&R

[MisterP]

10. well, according to the right-liberts the signs of true capitalism are: no corruption, no ethnic

hatred, no pollution, no income inequality, no regulatory capture, no inheritance of wealth, no GMOs, no war, and no speculation

so they're either Castroites or Titoites

[indepat]

11. Now ain't this so effin' special for big brother to subsidize large corporations for paying

their executives obscenely high compensation while also subsidizing these same corporations for grossly underpaying the rank-and-file employee. Washington misfeasance in the highest order and rank imo.

[FreeJoe]

12. I'm not sure that I understand

"Under the current tax code, corporations can deduct unlimited amounts of such “performance pay” from their federal income taxes."

Um...yeah. Paying employees, whether the CEO or a minimum wage employee is a business expense. We tax corporations on their profits, not their revenue. To figure out their profits, they deduct all of their expenses. Is the treatment of compensation as a business expense really considered a subsidy? Maybe I'm missing something, but this part seems a bit odd.