Clinton calls for corporate tax cut

[AntZ]

Clinton calls for corporate tax cut

By: Mike Allen
July 3, 2011 02:03 PM EDT




ASPEN, Colo. — President Bill Clinton says the nation’s corporate tax rate is “uncompetitive” and called for a lower rate as part of a “mega-deal” to raise the debt ceiling.

“When I was president, we raised the corporate income-tax rates on corporations that made over $10 million [a year],” the former president told the Aspen Ideas Festival on Saturday evening.

“It made sense when I did it. It doesn’t make sense anymore — we’ve got an uncompetitive rate. We tax at 35 percent of income, although we only take about 23 percent. So we should cut the rate to 25 percent, or whatever’s competitive, and eliminate a lot of the deductions so that we still get a fair amount, and there’s not so much variance in what the corporations pay. But how can they do that by Aug. 2?”

Clinton also said Grover Norquist, who as president of Americans for Tax Reform is the GOP’s unofficial enforcer of no-new-taxes pledges, has a “chilling” hold on the nation’s lawmaking.

The former president said it has seemed like Republicans need any revenue concessions to be “approved in advance by Grover Norquist.”

“You’re laughing,” he told the crowd of 800. “But he was quoted in the paper the other day saying he gave Republican senators permission … on getting rid of the ethanol subsidies. I thought, ‘My God, what has this country come to when one person has to give you permission to do what’s best for the country.’ It was chilling.”

Asked by moderator Ron Brownstein what President Obama’s posture should be on a debt deal if Republicans hold to their view that no new taxes can be included, Clinton replied: “Well, look, there are some spending cuts [Republicans] agree on, … and apparently they run it by a fair number of people in the Democratic caucuses …

“He could take those, and an extension of the debt ceiling for six or eight months. But if they’re really going to reach a mega-deal, you cannot reach a mega-deal without doing something like what the Bowles-Simpson committee recommended. … I don’t see how you can do this by Aug. 2. …

“I don’t think you can agree to some mega-deal on [the Republicans’] terms. … If they get closer, I believe they will agree on a more modest package of cuts. And the Republicans, if I were in their position, I’d say, ‘OK, this only counts for six months’ or eight months, or whatever. ‘But we don’t want to let the American people’s credit go under, let our credit get downgraded, let interest rates get up and slow down the recovery.’”

But Clinton said Democrats should not give in if Republicans “insist on the mega-settlement, with no new revenues from any source.” He said that in that case, he hopes “they’ll make a mini-deal.”

At another point, Clinton said about corporations: “When I was young, we were taught in law school that corporations were creatures of the state and had responsibilities to all their stakeholders — their shareholders, their employees, their customers and the communities of which they were a part. Now, it’s only shareholders. I think that’s a pretty bad idea.”


http://www.politico.com/news/stories/0711/58275.html

[Deepsepia]

At another point, Clinton said about corporations: “When I was young, we were taught in law school that corporations were creatures of the state and had responsibilities to all their stakeholders — their shareholders, their employees, their customers and the communities of which they were a part. Now, it’s only shareholders. I think that’s a pretty bad idea.”

They don't even have much in the way of responsibility to shareholders. More and more, corporations are run "for" management.

http://picload.org/image/lclwod/blog_executive_c.jpg

[FBD]

:lol: no skewing there!

[Muddy]

Some pie is better than none..

[Deepsepia]

Some pie is better than none..

That's true, but as it turns out, "none" is what shareholders are getting, while management gets "all the pie"

Here's a recent story about one of America's CEO's richly paid while his shareholders get trashed

http://picload.org/image/lcilar/firefoxscreensna.jpg

Here's Constellation's 5 year performance-- do you think its worth paying the CEO $15 million a year?

http://picload.org/image/lcilap/firefoxscreensna.jpg

[FBD]

yeah, there's a certain disconnect when some claim to support a free market, then take issue with the internal affairs of the businesses thereof.

it is the responsibility of the boards to maintain a well functioning executive staff. if they think its worth it, who the hell are you, or any one of us, for that matter, to dictate how the company's assets are handled?

now if they're giving out guarantees regardless of performance, then that's just a poor decision by the board, but sometimes its a concession they make if they feel its justified.


dont like it? then dont invest in the company.

[Acid Trip]

yeah, there's a certain disconnect when some claim to support a free market, then take issue with the internal affairs of the businesses thereof.

it is the responsibility of the boards to maintain a well functioning executive staff. if they think its worth it, who the hell are you, or any one of us, for that matter, to dictate how the company's assets are handled?

now if they're giving out guarantees regardless of performance, then that's just a poor decision by the board, but sometimes its a concession they make if they feel its justified.


dont like it? then dont invest in the company.

:+1:

[Deepsepia]

yeah, there's a certain disconnect when some claim to support a free market, then take issue with the internal affairs of the businesses thereof.

it is the responsibility of the boards to maintain a well functioning executive staff. if they think its worth it, who the hell are you, or any one of us, for that matter, to dictate how the company's assets are handled?

now if they're giving out guarantees regardless of performance, then that's just a poor decision by the board, but sometimes its a concession they make if they feel its justified.


dont like it? then dont invest in the company.

Ah, so much missing there.

The board -- in this case and so many others-- are creatures of the CEO. He picks them.

Ask yourself this question: How many "independent" boards are are there out there? Precious few . . . these are guys engaged at the behest of the CEO, and beholden to him. They get a very nice salary for a few days of work a year, and when they sit down at a compensation committee meeting, the question is never "what does he deserve?" its "what would you like, sir"

How many CEO's have been fired by their boards this year in the S&P 500 for something other than an outright crime?

This is not in any sense a "free market"-- its a case where assets rightfully owned by the shareholders are routinely misappropriated by corporate management. These managements have found themselves a very comfortable "corporate haven" in Delaware, where the rules are all in management's favor (that's why every company incorporates there -- because when push comes to shove, Management wants to be in front of a Delaware judge

As to the "if you don't like it, sell the stock", you fail to note that vast weight of indexed portfolios. If you're a teacher investing into your retirement fund, you own Constellation Energy. You don't get a say in Mayo Shattuck's ridiculous haul, any more than you get a say in Ray Irani's even more ridiculous haul. Remember, the company belongs to the shareholder, not to management. To say "if management is stealing from the company's owners, the recourse is to sell your shares at a loss" is obviously a travesty.

The recourse is that shareholders -- that is to say, the owners-- of a company ought to have some voice in executive compensation.

One of the reasons that the Obama Administration is much disliked by corporate fatcats is "say on pay"-- where shareholders get to vote directly on executive pay



"CEOs are paid for doing a terrible job. If the system wasn't so messed up, guys like me wouldn't make this kind of money."

[Muddy]

How can I get on a board?

[Deepsepia]

How can I get on a board?

Suck up to a CEO.

(more seriously, American boards of directors are drawn from a very small "club" of other executives, corporate lawyers, university presidents . . . its the same faces over and over again, and they're more likely to be struck by lightning than to challenge a CEO on his salary, because he butters their bread)

In the case of our poster boy of salary excess, Mayo Shattuck, he's not only the CEO of Constellation Energy, he's also Chairman of the Board of Directors.

Yes, that's right, the same Board of Directors which sets his salary (in theory this decision is made by a "compensation committee" of "independent directors", but that's a legal nicety . . . the way it actually works is that he decides what he wants and the lawyers draw it up. . .)

Combining the role of CEO and Chairman of the Board of Directors is an obvious "fail" in corporate governance-- but its more common than not among public companies; its the "norm" in the US to combine these two positions in one person, the stats I've seen are that %80 of companies combine these roles.

[Acid Trip]

Ah, so much missing there.

The board -- in this case and so many others-- are creatures of the CEO. He picks them.



A CEO may have a hand in selecting board candidates but they still go before the shareholders for a vote/approval. To say a CEO is handpicking his board without checks and balances of any kind is totally false. We just added a 13th member to our board so I know the process well.

[Deepsepia]

A CEO may have a hand in selecting board candidates but they still go before the shareholders for a vote/approval. To say a CEO is handpicking his board without checks and balances of any kind is totally false. We just added a 13th member to our board so I know the process well.


Shattuck is not just CEO, he's Chairman of the Board.

Let's recall that for public companies, roughly %80 of CEOs are also Chairmen of the Board. They pick who they want to be on the Board, some retired CEO, someone on whose board they might sit one day, their attorney.

There's not much in the way of "checks and balances" at public companies, as witnessed by a simple observation: How often do "outside" candidates for a Board seat win? Almost never (outside of takeover fights, where some third party has bought up enough stock to influence the election). How often do Boards fire CEOs? In general, in corporate America, unless you've been caught committing a crime, its almost impossible to get fired as CEO. Most companies fire people all the time. Few companies ever fire a CEO.

Let's also recall that the "shareholders" are most often other institutional investors, not individuals. For a company like Constellation Energy, nearly %80 of the stock is held by mutual funds and other institutional investors.

Again, its a "inside the club" issue-- mutual funds, endowments, pension funds almost never vote against management (the exception would be Union pension funds, who are often the only voice speaking out against crazy compensation) . . . Why not? Well because the managers of those mutual funds, pension funds and whatnot all have their own gargantuan salaries, which they'd like their Boards to approve . . . "activism against excessive compensation" hardly makes sense when you yourself are excessively compensated!

And when the fuck up is so bad that the CEO has to go . . . does he get fired? Nope . . . he gets paid to go away. Here's perhaps the most egregious example, but there are many, many more



As expected, Merrill Lynch & Co. (NYSE: MER) has ousted Chief Executive Stan O'Neal after the Wall Street firm took a gargantuan $8.4 billion write-down of securities backed by subprime mortgages -- whose value has been decimated -- that was almost double what the company had forecasted earlier this month, according to The Wall Street Journa.

Can you imagine screwing up that badly and getting $160 million?

In December, O'Neal promised that the $1.3 billion acquisition of subprime mortgage lender First Franklin would provide "revenue velocity" whatever that means. The company also said that it expected the acquisition to add to earnings by the end of 2007. Guess that didn't happen either. To make matters worse, O'Neal approached Wachovia Corp. (NYSE: WB) about a merger without consulting his board, which is a major no-no for any CEO. Let's not forget that Merrill's shares are down 29% this year, underperforming many of its peers including beleaguered Bear Stearns & Co. (NYSE: BSC).

To recap, O'Neal went full throttle into the subprime mortgage market at the height of the real estate market. He failed to consult the board on a major acquisition and has shafted the company's shareholders and will be richer beyond most people's wildest dream because of it.

http://www.bloggingstocks.com/2007/10/29/merrill-lynchs-stan-oneal-will-be-well-rewarded-for-his-failur/


That's right-- Stan O'Neal was "ousted" with a payoff of $161 million . . . nice "severance pay" for a guy whose action destroyed a company, doncha' think?

And yes, the Board approved it . . . and yes, Stan O'Neal was Chairman of the Board of Merrill Lynch, as well as being President and CEO.

[Muddy]

Shattuck is not just CEO, he's Chairman of the Board.

Let's recall that for public companies, roughly %80 of CEOs are also Chairmen of the Board. They pick who they want to be on the Board, some retired CEO, someone on whose board they might sit one day, their attorney.

There's not much in the way of "checks and balances" at public companies, as witnessed by a simple observation: How often do "outside" candidates for a Board seat win? Almost never (outside of takeover fights, where some third party has bought up enough stock to influence the election). How often do Boards fire CEOs? In general, in corporate America, unless you've been caught committing a crime, its almost impossible to get fired as CEO. Most companies fire people all the time. Few companies ever fire a CEO.

Let's also recall that the "shareholders" are most often other institutional investors, not individuals. For a company like Constellation Energy, nearly %80 of the stock is held by mutual funds and other institutional investors.

Again, its a "inside the club" issue-- mutual funds, endowments, pension funds almost never vote against management (the exception would be Union pension funds, who are often the only voice speaking out against crazy compensation) . . . Why not? Well because the managers of those mutual funds, pension funds and whatnot all have their own gargantuan salaries, which they'd like their Boards to approve . . . "activism against excessive compensation" hardly makes sense when you yourself are excessively compensated!

When you wrote the word gargantuan, it immediately made me think of Selena Gomez' head...

[Teh One Who Knocks]

Chairman of the Board

http://i.imgur.com/m1vd1.jpg

:-k

[FBD]

:lol: nope, no data skewing there. Glad you have such insight into how pretty much every company operates, it must make you a fortune, yes?

Are some CEOs paid far too much? Absolutely.

Is that sort of collusion a failure of corporate governance? Yup.

Is it the government's job to make a company function as they think it should? Iiiiiiiiiiiii dooooooooont thiiiiiink soooooooooo!!!

I certainly dont support your "well the government can fix it" bent, deep. Because while it may quasi "fix" the problems you see in front of you today, more often than not they merely set the stage for a different type of exploitation.