Big businesses back Obama
As the negotiations have rolled on, a growing collection of CEOs and big-business lobbies have fallen in line with President Obama's cry to raise income taxes on those making more than $250,000. To listen to these CEOs, this is the ultimate self-sacrifice. "I would pay more in taxes" in a budget deal, explained the noble Honeywell CEO Dave Cote, but it would be worth it to "put the economy on a sounder footing."Who knew that big business could be so anti-competition? Sometimes it makes me wonder if I'm in favor of corporations but against conglomerates, at least if it is conglomerates that are leading to monopolies on the economy at everyone else's expense. If Hollywood-based businesses like Paramount and Sony have what to do with the support for giant tax rates that smaller businesses cannot afford, then you can pretty well guess why in this age of recession, it's hard for smaller companies and corporations to do well, and then they go bankrupt and end up having to sell their properties to bigger companies instead. The GOP has a chance now to come out in favor of the smaller businesses and let them know they support their right to an economic situation that favors them.
We'll see how much more Mr. Cote's personal accountants ultimately allow him to pay. Meanwhile, the virtuous poses appear to be cover for a bigger game.
The Business Roundtable let the cat out of the bag on Dec. 11 when it circulated a letter signed by 150 of its corporate titans sanctioning year-end income-tax hikes. The letter happened to appear a few hours after the White House leaked its offer to include corporate tax reform as part of any cliff deal. The reform, in theory, would lower corporate tax rates.
Put another way, the Roundtable saw an opportunity to make the one million small American business owners who pay individual income taxes shoulder a big rate hike (up to 39.6%, from 35%) while radically lightening the tax load for the Roundtable's own corporate behemoths (to 28% from 35%). Any corporate tax reform hinges on closing "loopholes" to pay for a lower corporate rate. Small business owners would lose tax perks along with everyone else—meaning they would pay even more—but they would not benefit from lower corporate rates.
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