A tax loophole netted top fast food chains an extra $64 million in the past two years. When Congress placed a $1 million cap on the amount of executive pay that could be tax-deductible, lawmakers created an exception for “performance” pay. “This loophole quickly led to an explosion of ‘performance-based’ compensation, particularly stock options,” according to Sarah Anderson, who directs the Global Economy Project at the Institute for Policy Studies. She tallied more than $183 million in fully deductible “performance” compensation lavished on the CEOs of the six top publicly held fast food corporations in the previous two years. Had that cash been fully taxed, Ms. Anderson estimates, another $64 million would have landed in government coffers rather than corporations’. In contrast to their lavish CEO compensation packages, the fast food industry is notorious for the low wages paid to workers in their stores. Many of the fast food workers have to turn to taxpayer-funded anti-poverty programs in order to just to get by. The National Employment Law Project estimates that workers for one of the top fast food corporations draw nearly $650 million in Medicaid and other public assistance annually.
Source: Institute for Policy Studies
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