State senator goes after executive pay

Annapolis (Map, News) - One of the Senate’s most ardent liberals, Prince George’s County’s Paul Pinsky, will do battle yet again with business interests as he goes after what he calls excessive executive pay in a hearing Wednesday.

And as he expected, the Maryland Chamber of Commerce plans to testify against the bill.

Pinsky wants to remove the tax deduction for any part of an executive’s salary that is more than 30 times the salary or wage of the lowest-paid full-time worker in the company. In other words, if the lowest-earning employee in a firm makes $15,000 a year, any compensation paid to any executive or director of the company that is more than $450,000 would lose its deductibility.

“I think it’s illegitimate” as a business expense, Pinsky said. “I think it’s wrong. It doesn’t restrict what a company can pay its CEO.”

The legislation is “closing a very small loophole” and “recapturing revenues that should go into state coffers,” maybe help reducing the tax burden on middle-class and working families.

“We’re opposed,” said Karen Syrylo, tax consultant to the chamber. Pinsky has “heard us say before that America is free enterprise system, and government has no role inserting themselves in these kinds of decisions.”

“It just picks an arbitrary number,” Syrylo said.

She noted that the federal Internal Revenue Code, to which Maryland’s corporate income tax is tied, already has a $1 million limitation on executive pay.

Anything over that increase the corporate income tax a company pays.

“I don’t know of another state that has this kind of state regulation,” Syrylo said. “That’s a competitive problem.”

llazarick@baltimoreexaminer.com

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