Newsflash:
Issues End Corporate Rule End Corporate Rule Fast Food Giants Gorge on Subsidies
Monday, 02 December 2013 23:07

Fast Food Giants Gorge on Subsidies

Written by  Sarah Anderson | Common Dreams

Thanks to a loophole that subsidizes CEO pay, McDonald's, Yum Brands, Wendy's, Burger King, Domino's, and Dunkin' Brands trimmed $64 million from their tax bills in 2011 and 2012.

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, Yum Brands' 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?

My new Institute for Policy Studies report calculates the cost to taxpayers of this “performance pay” loophole at all of the top six publicly held fast food chains — McDonald’s, Yum, Wendy’s, Burger King, Domino’s, and Dunkin’ Brands.

Combined, these firms’ CEOs pocketed more than $183 million in fully deductible “performance pay” in 2011 and 2012, lowering their companies’ IRS bills by an estimated $64 million. To put that figure in perspective, it would be enough to cover the average cost of food stamps for 40,000 American families for a year.

After Yum, McDonald’s received the second-largest government handout for their executive pay. James Skinner, as CEO in 2011 and the first half of 2012, pocketed $31 million in exercised stock options and other fully deductible “performance pay.” Incoming CEO Donald Thompson took in $10 million in performance pay in his first six months on the job. Skinner and Thompson’s combined performance pay translates into a $14 million taxpayer subsidy for McDonald’s.

What makes all this even more galling is that these fast food giants are pocketing massive taxpayer subsidies for their CEO pay while fighting to keep their workers’ wages at rock bottom. All of the big fast food corporations are members of the National Restaurant Association, which is aggressively working to block a raise in the federal minimum wage to a level that would let millions of fast food workers to make ends meet without public support.

There’s an easy solution to the perverse “performance pay” loophole. A bill introduced by Senators Jack Reed (D-RI) and Richard Blumenthal (D-CT) would simply set a firm $1 million cap for executive pay deductions — with no exceptions. Corporations could still pay their CEOs whatever they choose, but at least taxpayers wouldn’t be subsidizing anything above $1 million. The Joint Committee on Taxation estimates this legislation would generate more than $50 billion over 10 years.

It makes no sense for employees of highly profitable giant corporations to have to rely on government assistance for basic needs. It makes even less sense for ordinary taxpayers to subsidize the CEOs who are benefiting most from the fast food industry’s low-road business model.

With Congress again mulling deficit-reduction strategies, it’s high time that Washington stopped letting fast food giants gorge on both of these absurd subsidies.

This work is licensed under a Creative Commons Attribution-Share Alike 3.0 License.

Link to original article from Common Dreams


Sarah Anderson

Sarah Anderson directs the Global Economy Project of the Institute for Policy Studies, a progressive multi-issue think tank, in Washington DC. She’s also the co-author of the IPS report, America’s Bailout Barons: Taxpayers, High Finance, and the CEO Pay Bubble.

Read 5616 times Last modified on Monday, 02 December 2013 23:15

End Corporate Rule

  • Protest Groups Call for Linking Arms on Wall Street to Stop the Destruction of the Ecosystem
    Protest Groups Call for Linking Arms on Wall Street to Stop the Destruction of the Ecosystem #FloodWallStreet – A day of non-violent direct action, Monday September 22nd: Thousands of demonstrators are planning to disrupt business-as-usual on Wall Street and at the NY Stock Exchange, sending a message to Obama and world leaders meeting at the UN Climate Summit on the 23rd: “Our economic system both causes, and profits from the crisis that is threatening humanity.”
    Written on Monday, 15 September 2014 18:37 Read more...
  • The Senate Tried to Overturn 'Citizens United' Today. Guess What Stopped Them?
    The Senate Tried to Overturn 'Citizens United' Today. Guess What Stopped Them? A majority of the United States Senate has voted to advance a constitutional amendment to restore the ability of Congress and the states to establish campaign fundraising and spending rules with an eye toward preventing billionaires and corporations from buying elections.
    Written on Saturday, 13 September 2014 14:48 Read more...
  • Bipartisan Case for a Constitutional Amendment on Campaign Finance
    Bipartisan Case for a Constitutional Amendment on Campaign Finance Following recent U.S. Supreme Court decisions dismantling our nation’s campaign finance laws, all Americans are certainly not equal on Election Day. With 5-4 split decisions, the court has given corporations the ability to spend unlimited money to persuade voters, and also declared limits on large donations to be the equivalent of infringement on speech.
    Written on Monday, 08 September 2014 21:46 Read more...
  • Coalition Asks John McCain to Support Constitutional Amendment, Hits a Glass Wall
    Coalition Asks John McCain to Support Constitutional Amendment, Hits a Glass Wall On Thursday, a broad coalition of activists met at Senator John McCain's office in an upscale building at a tony Camelback Road address to ask him to sponsor a constitutional amendment. Known as the Democracy For All amendment, it would overturn the Supreme Court 's decision on Citizens United from four years ago. You know — the decision that allowed all that money from 'corporations-are-people-too' into the political process.
    Written on Saturday, 06 September 2014 13:13 Read more...
  • Activists Deliver Amendment Petitions to 21 Senate Offices
    Activists Deliver Amendment Petitions to 21 Senate Offices

    Congress may be on recess, but activists across the country are not taking a break from the nationwide push to get big money out of politics. Today activists teamed up for a massive petition drop, delivering petitions in support of a constitutional amendment to overturn decisions like Citizens United to 21 Senate offices in 15 states (Arizona, California, Colorado, Florida, Iowa, Illinois, Louisiana, Massachusetts, New Hampshire, New Jersey, New Mexico, Nevada, Pennsylvania, Virginia, and Washington).

    Written on Friday, 22 August 2014 15:41 Read more...
  • On the Hill with Heroes and Tap Dancers
    On the Hill with Heroes and Tap Dancers I think the bad guys are sacred of the heroes and the tap dancers are managing a shuffle ball change just enough to keep in step with re-election. Thursday July 24, 2014, twenty-three heroes, Americans voting with their time to reverse the Supreme Court erosion of our equality of citizenship, congregated in the Russell Senate building waiting for Senator Tim Kaine (D-Va).
    Written on Friday, 08 August 2014 13:57 Read more...
  • Elizabeth Warren Quietly Racked Up A Nice Win
    Elizabeth Warren Quietly Racked Up A Nice Win Senator Elizabeth Warren (D-Mass.) got her way on Tuesday when the Federal Reserve rejected the living will plans for most Wall Street banks.
    Written on Wednesday, 06 August 2014 22:15 Read more...
  • The Koch Brothers' Reign of Terror: How Their Great Wealth Is Buying Our Government
    The Koch Brothers' Reign of Terror: How Their Great Wealth Is Buying Our Government

    It seems like every e-mail I receive these days from a Democratic Senate candidate or Senator up for re-election this cycle includes a warning that the infamous Koch brothers will do anything, no matter the cost, to take over the US Senate - and with it, our country.

    Written on Tuesday, 05 August 2014 15:20 Read more...
  • The Ultimate Goal of the NSA is Total Population Control
    The Ultimate Goal of the NSA is Total Population Control At least 80% of all audio calls, not just metadata, are recorded and stored in the US, says whistleblower William Binney – that's a 'totalitarian mentality'
    Written on Sunday, 03 August 2014 22:52 Read more...
  • Democrats Introduce Bill that Could Lead to Impeachment for Justices Thomas and Scalia
    Democrats Introduce Bill that Could Lead to Impeachment for Justices Thomas and Scalia

    On Thursday, a group of Democratic lawmakers proposed a law to establish a Code of Conduct  for the Supreme Court.

    It’s surely to have Supreme Court Justices Thomas and Scalia quaking in their Tea Party boots because it would mean they would actually have to be independent of political and other influences. They would also have to have the appearance of independence.  They would have to stay away from political activity. That part would be really hard.

    Written on Sunday, 06 July 2014 14:47 Read more...
  • California makes an official call for a U.S. Constitutional Convention to overturn Citizens United
    California makes an official call for a U.S. Constitutional Convention to overturn Citizens United

    On June 23rd the State Senate passed AJR 1, making California the second state in the union to officially call for an Article V constitutional convention for the sole purpose of passing a United States constitutional amendment that would effectively overturn Citizens United v. FEC and limit the corrupting influence of money in our electoral process.

    Written on Thursday, 26 June 2014 13:29 Read more...
  • New Organization Hangs Sign: 'Whistleblowers Welcome'
    New Organization Hangs Sign: 'Whistleblowers Welcome'

    A new organization called ExposeFacts—backed by well-known source of The Pentagon Papers Daniel Ellsberg—is debuting itself in Washington, DC on Wednesday as a new place where government and corporate employees aware of wrongdoing can more safely and securely report their concerns.

    Written on Sunday, 08 June 2014 13:54 Read more...
  • 'Astroturf' Groups Leading Drive to Kill Open Internet
    'Astroturf' Groups Leading Drive to Kill Open Internet

    The telecommunications industry is creating and funding front groups which pose as consumer organizations and aggressively lobby to kill net neutrality, journalist Lee Fang revealed in an article published in Vice on Friday.

    Written on Sunday, 08 June 2014 13:39 Read more...
  • John Oliver Calls on Angry Internet Trolls to Save Net Neutrality (video)
    John Oliver Calls on Angry Internet Trolls to Save Net Neutrality (video)

    It’s a sad state of affairs when a country that touts freedom of the press depends upon cable TV comedy shows to hear the real news.

    Written on Friday, 06 June 2014 04:19 Read more...
  • Oligarchy Enshrined
    Oligarchy Enshrined

    Why the Supreme Court’s McCutcheon ruling is good news for the super-rich and bad news for progressive Democrats.

    At the 2012 Conservative Political Action Conference, a conservative election lawyer and a baby-faced electrical engineer from Alabama with a made-for-TV Southern drawl began plotting how to unravel federal campaign finance regulations.

    Written on Tuesday, 20 May 2014 01:21 Read more...
  • Lincoln Didn't Fight the Civil War to Free the Corporations - Video
    Lincoln Didn't Fight the Civil War to Free the Corporations - Video

    This is an idea worth spreading - so - please watch & share with 5 or 10 friends. It’s important to get money out of politics and the average person back in. Also - leave a message on the YouTube and let TED know - this is one of the most important issues of the day."

    Written on Thursday, 15 May 2014 17:16 Read more...
  • Out of the Shadows: The U.S. Chamber of Commerce
    Out of the Shadows: The U.S. Chamber of Commerce

    The U.S. Chamber of Commerce is, as they boast on its website, the world's largest business organization, as well as the nation's largest corporate lobbying group. It is also a recipient of some of the largest amounts of so-called "dark" money in the country, refusing to disclose to the public its donors or even the amounts it receives. 

    Written on Tuesday, 29 April 2014 15:56 Read more...
  • Bernie Sanders Raises Battle Cry Against Citizens United: "I Vote for Democracy!"
    Bernie Sanders Raises Battle Cry Against Citizens United: "I Vote for Democracy!"

    Citizens United is not just the default reference for US Supreme Court decisions—including the 2010 Citizens United v. Federal Election Commission ruling—that have ushered in a new era of corporate dominance of American elections. It’s the name of the conservative group that encouraged Chief Justice John Roberts and the most activist Court majority in American history to tear the heart out of what were already weak campaign finance laws.

    Written on Sunday, 13 April 2014 04:24 Read more...
  • Local protests held in response to Supreme Court donation ruling
    Local protests held in response to Supreme Court donation ruling

    PITTSFIELD -- Their signs read "Get Big Money Out of Politics," "Democracy Is Not For Sale" and "This Is What Plutocracy Looks Like." About a dozen of them stood in Park Square on Wednesday evening, one of 130 "rapid response events" coordinated nationwide to protest that morning's Supreme Court decision in McCutcheon v. FEC.    

    Written on Friday, 04 April 2014 14:38 Read more...
  • With McCutcheon Ruling, An Activist Court Opts for Full-On Plutocracy
    With McCutcheon Ruling, An Activist Court Opts for Full-On Plutocracy

    Any doubts about the determination of an activist United States Supreme Court to rewrite election rules so that the dollar matters more than the vote were removed Wednesday, when McCutcheon v. Federal Election Commission was decided in favor of the dollar.

    Written on Wednesday, 02 April 2014 22:24 Read more...
  • TPM Interview: The Brown Grad Student Who Chased The NRA Out Of Rhode Island
    TPM Interview: The Brown Grad Student Who Chased The NRA Out Of Rhode Island

    Sam Bell is in the third year of a PhD program in geology at Brown University. Geology as in rocks. But Bell also moonlights as the the state coordinator of The Rhode Island Progressive Democrats, the state affiliate of the 10-year-old Progressive Democrats of America. And in his work with The Rhode Island Progressive Democrats, Bell was instrumental to the investigation that ultimately led to the National Rifle Association paying the second largest campaign finance fine in the state's history.

    Written on Thursday, 27 February 2014 22:13 Read more...
  • Thank a Postal Worker This Holiday Season
    Thank a Postal Worker This Holiday Season

    Postal workers are giving it their all this holiday season, as cards and packages and returns must be collected and delivered amidst ice storms, snowstorms and wild temperature drops.

    They deserve our thanks in 2013.

    And our support in 2014.

    Written on Thursday, 26 December 2013 23:49 Read more...
  • Fast Food Giants Gorge on Subsidies
    Fast Food Giants Gorge on Subsidies

    Thanks to a loophole that subsidizes CEO pay, McDonald's, Yum Brands, Wendy's, Burger King, Domino's, and Dunkin' Brands trimmed $64 million from their tax bills in 2011 and 2012.

    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.

    Written on Monday, 02 December 2013 23:07 Read more...
  • This Thanksgiving, Let's Celebrate AgriCULTURE, Not AgriBUSINESS
    This Thanksgiving, Let's Celebrate AgriCULTURE, Not AgriBUSINESS

    In December 1972, I was part of a nationwide campaign that came tantalizingly close to getting the U.S. Senate to reject Earl Butz, Richard Nixon's choice for secretary of agriculture. A coalition of grass-roots farmers, consumers and scrappy public interest organizations (like the Agribusiness Accountability Project that Susan DeMarco and I then headed) teamed up with some gutsy, unabashedly progressive senators to undertake the almost impossible challenge of defeating the cabinet nominee of a president who'd just been elected in a landslide.

    Written on Friday, 29 November 2013 00:06 Read more...
  • Arizona Democratic Party Shows Its Progressive Side at State Committee Meeting
    Arizona Democratic Party Shows Its Progressive Side at State Committee Meeting

    Progressive voices were heard loud and clear at Saturday’s Arizona Democratic Party (ADP) State Committee Meeting in Maricopa, Arizona.

    Unlike some past ADP meetings where progressives were ignored or where progressive resolutions were tabled and not heard by the full ADP membership, the Maricopa meeting was dominated by progressives.

    Written on Monday, 18 November 2013 20:09 Read more...
  • Can Public Banking Spur Economic Growth in Southern Arizona?
    Can Public Banking Spur Economic Growth in Southern Arizona?

    Tucson is one of the most impoverished cities in the country—for many reasons. The Arizona Legislature—driven by the American Legislative Exchange Council (ALEC) and short-sighted, “small government” ideology—has routinely swept funds earmarked for counties and cities to “balance” the state’s budget or fund pet projects like lower corporate taxes. Beyond the Legislature’s negative impact on Baja Arizona, the Tucson economy is not diversified enough. Manufacturing is nearly non-existent in Southern Arizona. There is an over-reliance on defense spending, University of Arizona spin-offs, tourism, low-wage service jobs, and growth/development. 

    Written on Friday, 15 November 2013 15:56 Read more...

Sign the TPP Fast Track Petitions

MoveOn.org Petition - Congress Don't Renew Fast Track

Public Citizen Petition - Congress Must Reject Fast Track Authority

MoveOn.org Petition - Stop the Trans Pacific Partnership

CREDO Petition - Stop the Massive Corporate Power Grab

 

Find Your Elected Officials for Issues

Enter your zip+4 and find your elected officials. This link provides name, address and phone number

ButtonFindElectedOfficials

 

Progressive Central Panel on Ending Corporate Rule

Ask Bill Moyers How to Overturn Citizens United