Saturday, April 16, 2005

Taypayers for a Day

United for a Fair Economy has an interesting report on the CEOs of the Wall Street firms that are pushing for Social Security privatization, "Taxpayers for a Day." As I'm sure you know, Social Security payroll taxes are capped at the first $87,900 of income. (In 2005, the cap was raised to $90,000.) These 26 CEOs, whose average salaries were $17.7 million in pay and bonuses in 2004, paid into Social Security for only four days. Seven of the 26 reached the earnings cap while you were still watching bowl games on New Year's Day. Certainly, they have the most to gain and the least to lose in a Social Security privatization scheme.

Other findings and figurings:

While 94 percent of workers effectively pay 12.4 percent of their annual income, including employer’s contribution, these CEOs pay an average effective rate of 0.16 percent of their annual income toward Social Security taxes (Social Security payments divided by total compensation).

An average “Joe” or “Juanita” taxpayer pays an “effective” Social Security rate of 12.4 percent. This is more than 200 times the effective rate paid by the average CEO in this group, which is 0.16 percent. We call this the “Joe-to-CEO” index.

Seven of the CEOs are “taxpayers for a day.” Their salaries were so high, they exceeded the $87,900 earnings cap in eight hours or less. These include the CEOs of Bear Stearns, Charles Schwab, Goldman Sachs, Lehman Brothers, Morgan Stanley and Wells Fargo/Strong Financial.

The lowest paid CEO among the industry group, Carl H. Lindner, earned $1,524,200 as chief of American Financial Group. He paid for Social Security taxes for 18 days.


At 7:32 AM, Blogger Janet said...

Hello...found you completely by accident, after hitting that "next blog" button at the top of the page with my own blog. I'll bookmark your sites and come back again. Just wanted you to know you're being read!

(Lord Celery)

At 6:07 PM, Blogger fdtate said...

Thanks for stopping by, Janet. Come back often. It's always easier to find the motivation to write and post if I know someone is reading.

At 9:57 AM, Blogger cvc said...

Yikes. That income gap is absolutely disgusting.


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