In 2007, CEOs of major corporations were paid on average 344 times the average worker's pay.
Ms. Anderson advocates that 25:1 ratio on tax deductibility apply to all corporations, including any company that seeks a government procurement contract or tax break. This would generate more than $5 billion in extra revenues for Washington.
One factor probably weighing against congressional action is the political efforts of the nation's companies and their wealthy executives. From 1998 to 2008, the financial sector alone spent at least $1.7 billion on campaign contributions and another $3.4 billion on lobbying, according to a study released last week by Essential Information, a nonprofit group founded by Ralph Nader.
"The righteous populist anger is competing against the awesome political-economic power of Wall Street," says lead author Robert Weissman.
To him, managers of hedge funds won the "most egregious" tax break – the ability to claim their income as capital gains and pay only 15 percent in federal taxes. Considering the high incomes many got before stock prices tanked, these managers would otherwise pay regular income-tax rates at least twice as high. "Completely irrational," says Mr. Weissman of the tax break.
Last year, New York Democratic Senator Charles Schumer, highly dependent on Wall Street for campaign contributions, did not support a measure closing the hedge-fund tax loophole. Yet, argues Anderson, it was "a no brainer."