Where has all the surplus gone?

Posted: 3 August 2012 in Uncategorized
Tags: , , ,

Where has all the surplus gone?

Based on the information gathered by NerdWallet, especially the data on top executive pay vs. corporate earnings, the surplus is being appropriated from workers within private corporations and then distributed not to the government in taxes; instead, a large share is distributed to the chief executive officers while the rest, one presumes, is handed over to other private entities inside and outside the firms.

Kraft Foods is a good example. It paid federal income taxes at a rate of only 8 percent and distributed to Irene Rosenfeld, chairperson and CEO, $21,944,694, which was 228 time what the average Kraft worker received in salary and benefits.*

While we’re at it, here are the different corporate tax rates: the statutory rate, the rate reported by the corporations, and the rate actually paid to the U.S. government.

Thanks to Nerdwallet, we now where the surplus has—and has not—gone.

*Readers can use the Nerdwallet site to gather the information on their own favorite corporations.

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Comments
  1. Sandy Carmichael says:

    $96,000+ seems awfully high for the average pay at Kraft. My guess would be that some very high salaries, e.g. of execs, are boosting the average and masking the the probably much lower salaries of the ordinary workers. (As Bill Gates once quipped, it he walked into a corner pub the average income of all the patrons would jump into the millions.) So the multiple of highest pay at Kraft to the average of ordinary worker’s pay is probably much greater than 228 (and hence so is the surplus labor being appropriated).

    • David F. Ruccio says:

      You’re absolutely right, Sandy. They calculate the average compensation of employees by dividing the “best estimate” of personnel costs by the number of employees. The way these costs get reported, they often include both non-personnel costs (like advertising and equipment) and personnel other than productive laborers (such as managers and support staff). So, yes, the multiple of highest pay at Kraft and other companies to the average of ordinary worker’s pay is probably much greater than the numbers shown on the NerdWallet web site.

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