Corporate Leadership
by Miki Saxon
The media and most people are all enraged because many of the bailed-out companies owe taxes, but I don’t see the big deal.
“Nearly two-thirds of U.S. companies and 68% of foreign corporations do not pay federal income taxes…The Government Accountability Office (GAO) examined samples of corporate tax returns filed between 1998 and 2005…an annual average of 1.3 million U.S. companies and 39,000 foreign companies doing business in the United States paid no income taxes – despite having a combined $2.5 trillion in revenue. The study showed that 28% of foreign companies and 25% of U.S. corporations with more than $250 million in assets or $50 million in sales paid no federal income taxes in 2005. Those companies totaled a combined $372 billion in sales for the largest foreign companies and $1.1 trillion in revenue for the biggest U.S. companies.”
This isn’t new; I remember hearing about it decades ago, so why freak out now?
The thing that really gets me is that AIG is suing the US government, which essentially owns it.
“A.I.G. sued the government last month in a bid to force it to return the payments, which stemmed in large part from its use of aggressive tax deals, some involving entities controlled by the company’s financial products unit in the Cayman Islands, Ireland, the Dutch Antilles and other offshore havens.”
And even in this day and age $306 million is (or should be) more than small change.
Does this qualify as irony, stupidity or just good, old-fashioned insanity?
Your comments—priceless
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Image credit: sxc.hu
March 24th, 2009 at 7:45 pm
The purpose of the broadcast media is to make money for its owners, not fairly or intelligently report and analyze news. The best way to do that is either to identify or create a conflict to develop and consumer interest.
The current conflict over bonus money refers to less than 1/10th of 1% of the gov’t investment (that’s a fact), but it’s a great conflict (that’s an opinion). The PR re the AIG suit is another conflict.
Suits tend to be an organization’s way of establishing boundaries–law surveys show this (that’s a fact).
That AIG is suing its owner (the gov’t) is of no concern (that’s an opinion).
March 24th, 2009 at 8:10 pm
No arguments about the media, Dan, but that doesn’t change the stats on corporate tax payments.
I think the furor over bonuses comes more because those are numbers and acts that the average person can wrap their head around. Too many zeros and the numbers stop meaning anything (my opinion).
March 25th, 2009 at 4:01 pm
You bring up a good point about the questionable leadership tactics of AIG execs. In a time when powerful leadership is the key to escaping the financial recession, people are still being led by money. We need to step back and question how we motivate and lead, and what inspires employees to behave ethically through increased communication and authentic human connections. Leaders can differentiate by understanding how to leverage relationships based on trust and honesty in order to nurture success.
March 26th, 2009 at 10:50 am
I think that so-called leadership as promoted by the leadership industry is partly responsible for this mess. The same guys who are being vilified for “leading” their ‘followers’ down a path paved with CDOs and credit-default swaps were previously lauded by leadership gurus and pundits of all stripes for their brilliant vision and great ability to inspire their employees. A ‘when it works it’s good and when it tanks it’s bad’ approach.
The problems are likely to continue as long as the out-sized egos and excessive sense of entitlement stay and considering that’s how kids have been raised for the last few decades it isn’t likely to go away soon.
Pathological liars are completely authentic because they believe what they say is the truth. Every time a person is ‘anointed’ a leader and s/he buys into the rhetoric the stage is set for for a crashing failure.
I think more energy should be spent flattening the leadership function and diffusing it throughout the organization just as companies have flattened their management structure by pushing decision-making and responsibility down through the ranks.
Everyone should lead and everyone should follow depending on the circumstances and what’s going on at that particular moment.