Friday, December 30, 2011

Living large on Wall Street

Nothing the white collar criminal class does here is against the law. It should be but it won't ever change as long as our political elites protect the banksters' perks. Like this cozy little scam:
The stock market’s rebound from the financial crisis three years ago has created a potential windfall for hundreds of executives who were granted unusually large packages of stock options shortly after the market collapsed.

Now, the corporations that gave those generous awards are beginning to benefit, too, in the form of tax savings.

Thanks to a quirk in tax law, companies can claim a tax deduction in future years that is much bigger than the value of the stock options when they were granted to executives. This tax break will deprive the federal government of tens of billions of dollars in revenue over the next decade. And it is one of the many obscure provisions buried in the tax code that together enable most American companies to pay far less than the top corporate tax rate of 35 percent — in some cases, virtually nothing even in very profitable years.
So in other words, when the market crashed, the execs got mega stock options at a low price. Market recovers, they get to buy the revalued stocks at a bargain basement rate and the companies get a huge tax write off for the enhanced compensation. Which robs the national treasury of their tax revenue. Little taxpayers are effectively subsidizing executive payoffs, which are already astronomically high.

Yet the answer our political elites come up with every time to "help" the little guy is to throw more free money into the insatiable maw of the banksters and pay for it by making "sadly necessary" sacrifices in social programs for the poor and middle class. But please don't complain about it. It hurts their feelings.

[More posts daily at the Detroit News.]

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