Finance

Warren: Trim corporate pay tax breaks to cover extra Social Security checks

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Sen. Elizabeth Warren (D-Mass.) wants to give all Social Security recipients a $580 check — and pay for it by trimming tax perks for corporate salaries.

Arguing that corporate executives are enjoying massive paychecks and bloated retirement accounts, Warren unveiled a new bill Thursday that she argued would even the playing field somewhat.

{mosads}Noting that CEO compensation for the nation’s 350 biggest companies rose 3.9 percent in 2014, Warren proposed giving Americans that rely on Social Security, veterans benefits or equivalent programs a one-time $580 payment, which is equal to 3.9 percent of the benefits they would otherwise receive.

Warren’s bill comes a few weeks after the Obama administration announced there would be no cost-of-living increase to Social Security payments in 2016. The rationale behind halting the increase for the first time since 2011 is that low inflation has kept consumer prices relatively flat.

But Warren argues that CEOs are still enjoying income boosts, and they can chip in to cover heightened payments for Americans reliant on Social Security.

To pay for this emergency payment, Warren proposed scrapping a tax code provision that allows corporations to deduct a portion of executive salary, so long as the pay is “performance based.”

Under the tax code, corporations can only deduct the first $1 million in cash-based executive pay, but there are exemptions for performance-based pay, like stock options.

Democrats have targeted that part of the tax code in the past to raise revenue, and Warren’s office says repealing that language would raise more than enough to cover cutting those supplemental checks.

Under the bill, the rest of the revenue raised by killing that corporate tax break would go toward shoring up the Social Security and Disability trust funds, which got a much-needed cash infusion as part of the most recent budget agreement.

Tags Corporate tax Elizabeth Warren Social Security

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