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November 28, 2012
CEOs Want a Deficit Reduction Plan that Benefits Them
by Robert Kropp
Eighty corporate CEOs join the Fix the Debt campaign, which calls for increased tax breaks for
corporations while limiting social programs that help the poor and middle class.
Are the CEOs of many of the nation's largest corporations blind to the reality of growing wealth
inequality in the US? Or are they secure in their belief that political power bought through
political expenditures will keep their priorities uppermost, to the detriment of those not blessed
with multimillion dollar salaries and generous stock options?
CEOs—including such beneficiaries of taxpayer bailouts as Jamie Dimon of JPMorgan Chase and Lloyd
Blankfein of Goldman Sachs—have joined the Fix the Debt campaign, which aspires to manufacture a
crisis out of the so-called fiscal cliff and increase benefits for corporations and the wealthy
while cutting programs that help the poor and middle class.
According to a recent analysis by
the Institute for Policy Studies, the Fix the Debt campaign "is pushing for less spending on
earned-benefit programs, such as Social Security and Medicare, while promoting a rash of corporate
tax breaks as part of what they call 'pro-growth tax reform.'"
The corporate tax breaks
include a territorial tax system proposal that would allow companies to avoid paying taxes on
profits earned overseas when those profits are brought back to the US. The major beneficiaries
among the Fix the Debt signatories would be General Electric and Microsoft, the report states. GE
alone could gain a tax windfall of almost $36 billion should Congress enact such a proposal.
"A territorial system would give companies additional incentives to disguise US profits as
income earned in tax havens in order to avoid paying US income taxes," the report continues.
In 2011, Fortune 500 companies reported $1.5 trillion in overseas profits. "There is evidence
that a significant portion of these profits are located in tax havens," according to Citizens for Tax Justice.
The report then turns to the Bush-era tax
cuts for wealthy individuals. While Fix the Debt avoids addressing the issue directly, it does call
for "comprehensive and pro-growth tax reform, which broadens the base, lowers rates, raises
revenues, and reduces the deficit." Even as it calls for lower tax rates, the campaign also wants
to reform social programs so as to limit future cost growth.
"The CEOs backing Fix the
Debt personally received a combined total of $41 million in savings last year thanks to the
Bush-era tax cuts," the report points out. Leon Black of Apollo Global Management alone saved $9.9
million thanks to the tax cuts.
"Some of the Fix the Debt campaign's CEOs have indicated a
willingness to give up their individual tax cuts in exchange for a 'balanced' debt deal that would
also include corporate tax breaks," the report continues; such sacrifice on their part would, of
course, be more than offset through higher corporate profits and the increased bonuses and stock
options they would enjoy.
The Institute for Policy Studies provides a number of
recommendations for helping create a more sustainable economy. The Stop Tax Haven Abuse Act, introduced by Senator Carl Levin in 2011, "contains a
host of measures to combat offshore and tax shelter abuses," according to a press release from Sen.
Other recommendations aim to end the Bush-era tax cuts for the wealthiest
two percent, and restore corporate tax revenue to a more meaningful share of receipts. And a tax on
financial transactions "would help curb short-term speculation that erodes confidence in the
stability of markets while generating massive revenues."
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