'Legalized counterfeiting'

Are corporate officers counterfeiters? Sure, they are not printing illegal dollars, they are just legally printing stock certificates and selling them for dollars.

In the beginning, corporations issue and sell stock to finance their corporation. When they build a new plant or expand their operation, they issue and sell more stock to finance the increased operation. When they make a profit, they have a choice of paying dividends, holding it for future expansion, paying off debt or paying it to themselves.

Unfortunately, now days, when they make huge profits, most of the CEOs and directors have chosen to issue themselves stock under the guise of incentive compensations: target awards, long-term awards, preretirement awards, pensions, deferred compensation awards and many others.

A common practice is to pay themselves a salary of a little less than $1 million and issue themselves stock valued at two to five times the salary. They can either hold this $5 million to $10 million worth of stock a year, sell it and pay 15 percent capital gains tax or hold it, and in time, have complete control of the corporation, subsequently paying little or no dividends or taxes. Either way they become millionaires or billionaires.

This could be called "legalized counterfeiting." They may as well be printing dollars.

JACK H. KNOWLAN SR., Jackson