Wealth, jobs and pay inequality are big political issues this presidential primary season, and they’re bound to become bigger once the parties pick their nominees. In the plethora of plans candidates tout for tackling these problems, one favored tool stands out: the federal tax code.
But trying to legislate corporate behavior and economic fairness — however you define fairness — through the tax system is a lot trickier than it sounds.
Consider the supposed solution to an equality and social-justice issue debated six elections ago — a law designed to limit how much companies could deduct from their taxable income for lush pay packages to high-paid executives.
In 1992, as now, key electoral issues included inequality and the spectacle of American jobs moving overseas — underscored by a gaping disparity between executives making multiple millions and ordinary workers with stagnant wages.
The idea was to give companies a tax incentive to rein in executive pay or just shame them into it. But a new study done for ProPublica and The Washington Post by S