US taxpayers are subsidizing CEO salaries by more than $20 billion a year through tax and accounting loopholes, according to a report by the Institute of Policy Studies. That is more than double what is spent in the US educating children with disabilities.

The report, Executive Excess 2008, found that S&P 500 CEOs averaged $10.5 million in pay, 344 times the pay of your average American worker. However, hedge and private equity fund managers did even better. The top 50 in this group were pulling an average $588 million each, or 19,000 times as much as the average worker.

The CEOs get subsidies through a whole lot of scams. Like for example unlimited deferred compensation where they can legally shield unlimited amounts of compensation from taxes through special deferred accounts set up by their employers. That's not the same situation for US taxpayers who face limits on how much income they can defer from taxes via 401(k) plans. I am told by my American friends that this amounts to no more than $15,500 per year for most workers. And the total cost of this little scam for taxpayers? $80.6 million.

The report also found that corporations claimed 2005 stock option tax deductions that totalled $61 billion more than the expenses shown on company books. And they got away with it!

No doubt, this will get worse with neither John McCain nor Barack Obama endorsing all the big reforms needed to change this situation.