CEOs Use Smokescreen of Federal Debt to Promote Corporate Tax Breaks

Tuesday, November 27, 2012
Erskine Bowles and Alan Simpson (AP Photo)

What was promoted as a plan by corporate CEOs to help pay down the federal deficit could really turn into a revenue windfall for some of the largest companies in the U.S.


The Campaign to Fix the Debt, a business group led former Bill Clinton Chief of Staff Erskine Bowles and former U.S. Senator Alan Simpson (R-Wyoming), recently proposed a deficit reduction plan that they contended would require CEOs to pay a higher tax rate.


After examining this proposal, the Institute for Policy Studies (IPS), a liberal think tank, concluded that because corporations would score big if their plan was adopted by lawmakers and President Barack Obama, the CEOs would receive greater compensation despite the higher rate.


Among the provisions advocated by the Campaign to Fix the Debt is a territorial tax system, which would allow corporations to bring home overseas profits and pay little or no tax on them. In all, the savings could amount to $134 billion for the 63 publicly-held companies that have joined the Bowles-Simpson group.


The biggest winners would be General Electric ($35.7 billion), Microsoft ($19.4 billion), Merck ($15.5 billion) and Cisco Systems ($14.5 billion).


“If their companies save billions in tax dollars, corporate profits will soar—and CEO pay will skyrocket too,” reads the IPS report. “The small amount of additional personal income tax they might pay would be more than offset by higher bonuses and stock option gains.”

-Noel Brinkerhoff


To Learn More:

Report: Corporate Execs Pushing for Territorial System Looking Out for Themselves (by Bernie Becker, The Hill)

Billions in Tax Savings a Goal of Anti-Debt Group, According to Think Tank (by Nanette Byrnes, Reuters)

CEO Council Demands Cuts To Poor, Elderly While Reaping Billions In Government Contracts, Tax Breaks (by Christina Wilkie and Ryan Grim, Huffington Post)

The CEO Campaign to “Fix” the Debt (by Sarah Anderson and Scott Klinger, Institute for Policy Studies) 

Multi-Millionaire Goldman Sachs CEO Blankfein Says Americans Should Work Longer and Receive Fewer Benefits (by Noel Brinkerhoff, AllGov)


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