The Target Syndrome: CEO Tax Breaks Cost Us All

Outraged at the story that the CEO of Target who is getting a $70 million personal severance package that equals the total amount being offered to all 17,600 laid off Canadian employees?

You aren't alone.

Sadly the story gets even more outrageous than that.

What wasn't reported is that each and every one of those employees will be paying their full rate of taxes on each and every penny of their 16 week severance. Not so with the big guys.

In Canada, there is a law on the books that says if you are CEO and you cash in the stock option part of your benefits - you don't pay tax on the first 50 per cent of that income.

That's right.

A free pass on what is often millions of dollars in income. It is a loophole used by the president of the Royal Bank, the TDBank and many, many others . Pharmaceutical heads use it. So do former prime ministers and senators. Anyone who sits on a board and gets part of their pay in stock options gets a tax-free pass on half that income. It is a practice that costs the rest of us. And it has to be cleaned up.

CEOs of major corporations are compensated at rates that are often hundreds of times higher than their rank-and-file employees. And they employ high-priced tax lawyers to figure out how to pay less than the stated tax rate. How is that fair? The old argument used to be that they were worth so much to the economy. Tell that to the people who used to work at the 133 Canadian Target outlets.