Welch demands answers in abuse of tax code to fund executive benefits |
Wednesday, 06 August 2008 19:00 |
Washington, D.C. - Rep. Peter Welch today asked for answers following a media report that some corporations are abusing the tax code to fund benefits for highly compensated executives. Welch wrote to Treasury Secretary Henry Paulson and Internal Revenue Service Commissioner Douglas Shulman asking a series of questions in preparation for a legislative response. "At a time when workers' retirement benefits are increasingly in jeopardy and executive compensation continues to rise - too often without relation to company performance - these revelations are particularly disturbing," Welch wrote. "In short, overly generous corporate executive compensation should not be paid for at the expense of the American taxpayer or employee pension security." The article detailing this practice from the August 4 Wall Street Journal can be found here: http://finance.yahoo.com/retirement/article/105503/Companies-Tap-Pension-Plans-to-Fund-Executive-Benefits Today's letter to Secretary Paulson and Commissioner Shulman follows:
August 7, 2008 The Honorable Henry Paulson The Honorable Douglas Shulman Dear Secretary Paulson and Commissioner Shulman: I am writing to call your attention to the attached August 4, 2008 Wall Street Journal article entitled, "Companies Tap Pension Plans To Fund Executive Benefits." The article details how some employers are abusing the special tax treatment of qualified plans by using those plans to provide tax-benefited supplemental executive compensation to a select group of highly compensated executives. In addition, the article raises the possibility that this practice could lead to the destabilization of pension funds, if companies that increase pension obligations by adding qualified compensation for their executives do not also increase pension assets. At a time when workers' retirement benefits are increasingly in jeopardy and executive compensation continues to rise - too often without relation to company performance - these revelations are particularly disturbing. In short, overly generous corporate executive compensation should not be paid for at the expense of the American taxpayer or employee pension security. I respectfully request that you respond to the following related questions:
Please provide me with the answers to these questions no later than Friday, August 22, 2008, so that I will have the information necessary to prepare a legislative response to this issue. Thank you for your prompt attention to these concerns. I look forward to your responses. Sincerely, PETER WELCH |