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As if we're so thick that this needs to be hammered home any further (or more unsubtly).
But they are depending on that thickness, aren't they?
(CEOs from several big corporations (including Erskine Bowles on the left) meet with House Republican leaders on November 28, 2012, in Washington. Photo courtesy of the Office of the Majority Whip.)
A merry band of corporate executives is zig-zagging Washington today, meeting with almost every principal player in the “fiscal cliff” negotiations. The CEOs are meeting with administration officials at the White House, with House Speaker John Boehner, and with House Minority Leader Nancy Pelosi.
According to most press accounts, these business titans are “pressing for a solution to the so-called fiscal cliff” (Bloomberg), while “touting the virtue of bipartisanship and shared sacrifice” (The Washington Post).
But what’s important to understand—what every press account of these meetings should note—is that they’re not, in practice, proposing any sacrifice from their companies in particular nor their industries in general.
Key planks of their proposals, explicitly articulated by the Fix the Debt campaign and other industry coalitions pushing for a deal, include a lower corporate tax rate—even though many of these companies pay little or no corporate taxes as it is.
Then there’s a territorial tax system, which would allow corporations that have profits parked overseas to bring them back home without paying any taxes. (Right now, they’d be obligated to pay the normal 35 percent corporate tax on those profits if they were repatriated). Some, but not all, of the CEOs also want the Bush tax rates extended for all earners.
That’s not exactly “shared sacrifice.”
A report from the Institute for Policy Studies notes that the 63 CEOs behind “Fix the Debt” would reap $134 billion in tax windfalls for their companies just from a territorial tax system alone.
That naturally would increase, not decrease, the deficit, so somebody’s got to pay—hence the Very Serious pleas to “reform” Medicare and Social Security.
“These CEOs paint a stark picture of hypocrisy,” said Scott Klinger, co-author of that IPS report, in a statement. “They’re simply taking advantage of the so-called ‘fiscal cliff’ to push the same old agenda of more corporate tax breaks while shifting costs onto the poor and elderly.”
To put a finer point on it, here is what the nine CEOs tooling around Washington today stand to gain in the fiscal cliff negotiations—how much their company would gain from a territorial tax system, and how much the individual CEO would gain if the Bush rates on top earners are extended.
The figures on taxable CEO compensation and unrepatriated offshore earnings are from that excellent IPS report, unless the company was not included. (It detailed only members of “Fix the Debt.”) In that case, I consulted the company’s SEC filings, and linked to it. The effective tax rate figures are either from this Citizens for Tax Justice report, or if it wasn’t included, from other sources which are also linked.
Ken Frazier, CEO, Merck & Co.
Merck’s unrepatriated offshore earnings: $44.3 billion
Estimate windfall from territorial tax system: $15.5 billion
Merck’s effective corporate tax rate from 2008-2010 (standard is 35 percent): 11.5 percent
Frazier’s 2011 taxable compensation: $5.4 million
Frazier’s yearly savings if top Bush rates are extended: $237,352
Muhtar Kent, CEO, Coca-Cola
Coca-Cola’s unrepatriated offshore earnings: $23.5 billion
Estimate windfall from territorial tax system: $8.2 billion
Coca-Cola’s effective corporate tax rate from 2008-2010 (standard is 35 percent): 14.1 percent
Douglas Oberhelman, CEO, Caterpillar Inc.
Caterpillar’s unrepatriated offshore earnings: $13 billion
Estimate windfall from territorial tax system: $4.55 billion
Caterpillar’s 2011 effective corporate tax rate (standard is 35 percent): 25.6 percent
Oberhelman’s 2011 taxable compensation: $10.2 million
Oberhelman’s yearly savings if top Bush rates are extended: $459.851
Marissa Mayer, CEO, Yahoo! Inc.
Yahoo’s unrepatriated offshore earnings: $3.2 billion
Estimate windfall from territorial tax system: $1.12 billion
Yahoo’s three-year effective corporate tax rate from 2008-2010 (standard is 35 percent): 8.7 percent
Thomas Wilson, CEO, Allstate
Allstate’s unrepatriated offshore earnings: $0
Estimate windfall from territorial tax system: $0
Allstate’s 2011 effective corporate tax rate (standard is 35 percent): 17.9 percent
Wilson’s 2011 taxable compensation: $4.1 million
Wilson’s yearly savings if top Bush rates are extended: $175,793
Lloyd Blankfein, CEO, Goldman Sachs
Goldman Sachs’ unrepatriated offshore earnings: $20.6 billion
Estimate windfall from territorial tax system: $3.3 billion
Goldman Sachs’ effective corporate tax rate 2008-2010 (standard is 35 percent) 20.8 percent
Blankfein’s 2011 taxable compensation: $15.6 million
Blankfein’s yearly savings if top Bush rates are extended: $706,104
David Cote, CEO, Honeywell International
Honeywell’s unrepatriated offshore earnings: $8.1 billion
Estimate windfall from territorial tax system: $2.8 billion
Honeywell’s effective corporate tax rate 2008-2010 (standard is 35 percent) -0.7 percent
Cote’s 2011 taxable compensation: $55.2 million
Cote’s yearly savings if top Bush rates are extended: $2.5 million
Mark Bertolini, CEO, Aetna
Aetna’s unrepatriated offshore earnings: $0
Estimate windfall from territorial tax system: $0
Aetna’s effective corporate tax rate 2008-2010 (standard is 35 percent) 28.8 percent
Bertolini’s 2011 taxable compensation: $9.5 million
Cote’s yearly savings if top Bush rates are extended: $423,208
Frank Blake, CEO, Home Depot
Home Depot’s unrepatriated offshore earnings: $2.4 billion
Estimate windfall from territorial tax system: $8.4 million
Home Depot’s effective corporate tax rate 2008-2010 (standard is 35 percent) 35.6
Notably, none of the corporations represented in Washington today except Home Depot actually paid anything close to the corporate tax rate of 35 percent. Most would benefit handsomely from a territorial tax system, though not all—the interests of these companies don’t always align perfectly. Some, like Honeywell and Yahoo!, wouldn’t gain anything from reductions to Medicare and Social Security—the demands from those CEOs to cut spending on those programs is perhaps nothing more than a cover for their windfalls elsewhere. Others, like Goldman Sachs and Aetna, surely would benefit from a reduction in these programs.
What’s clear, though, is that the sacrifice preached by these CEOs is most certainly one-sided.
CEOs aren’t the only ones with a lot to gain from these negotiations. Lee Fang reports that a congressman heavily involved with the “fiscal cliff” talks has already been hired as a lobbyist.
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Remember how the Bowles-Simpson (or was it Simpson-Bowles) Plan was deep-sixed by everyone who had a solid look at it (including all the Rethugs who were actually embarrassed by the brazenness of its callous disregard for the poor and helpless)? I remember actual retching occurring outside of the millionaires' cheering section.
Well, like every program that benefits that tiny .0001% the most, it's being remarketed as your patriotic duty today, and you better vote for it or the republic will not stand!
One of my favorite writer/reporters has the filthy low-down from these spats-laden fun boys.
And now, America's fun couple is out there pitching their non-existent "plan" personally. The unfortunate opening lines here are a reason to drive nails through your head.
Theirs is an improbable buddy act that is making for unlikely entertainment from campuses to corporations on a most serious subject: the federal debt. The proof of their appeal: some business groups pay them $40,000 each per appearance.Only in the funhouse mirror that is the Beltway media are these two guys an "improbable buddy act." Only in that same mirror are they an "odd couple." (And the fact that "business groups" pay them 40-grand a pop proves nothing except the fact the two of them shouldn't be trusted as far as you can throw Lloyd Blankfein's desk.) Both of them are tools of the financial power that has come to be the ruination of the nation's economy and is more than halfway toward ruining the nation's democracy as well.
Really. To discuss budgets and baselines. Ladies and gentlemen, coming soon to your city or town (if they have not been there already, and maybe even if they have) are the latest odd couple of politics: the 67-year-old Democratic straight man, Erskine B. Bowles of Charlotte, N.C., and his corny 81-year-old, 6-foot-7 Republican sidekick, Alan K. Simpson of Cody, Wyo.
For example, the nation's tattered social safety net is in as much danger from the two of them as it is from the outright zombie-eyed granny-starver, Paul Ryan, who personally walked away from the Simpson-Bowles "plan" because not enough grannies were being starved.
Bowles just wants to hand the entire social insurance system over to his financial masters. (He's one of the masterminds behind the Fix The Debt scam by which we are supposed to believe that a passel of avaricious CEOs have the country's best interests at heart.)
The financial elites, for whom Erskine Bowles would run the Iditarod if you put him in harness, loved it, which should have been a warning to everyone. Simpson hates the people who depend on the programs. But one of them is a lot taller than the other one so — bipartisanship! The plan lives!While the support was greater than expected, it was short of the 14 votes needed to force immediate action in Congress. The executive director, Bruce Reed, now chief of staff to Vice President Joseph R. Biden Jr., urged the chairmen to soldier on.Well, since the whole enterprise is dedicated to old guys out to screw people, the name is apt, if nothing else.
"Together we decided, Let's don't let this thing die," Mr. Bowles said. "Bruce convinced Al and me that the plan we put together could be the gold standard." They quickly raised money, including from Peter G. Peterson, the billionaire financier of antideficit efforts, to keep a small staff.
They began working with the bipartisan "Gang of Six" senators (now eight) to write the report into legislation - "the Cialis project," Mr. Bowles privately joked, borrowing from the advertising slogan for an erectile dysfunction drug, "When the moment is right, will you be ready?"
It is everything that has been wrong with this enterprise from the start. It is an exercise in Beltway wankery that hasn't even bothered to pause to estimate the human cost of the deal it is seeking to foist on the American people. (And of which Alan Simpson is indecently contemptuous.)
It traffics in the spurious notion that any deal with which ""both sides" are angry must be the right deal. (Can we please have an honest assessment of credibility here? If billionaires are angry because they might have to chip in some boutonniere money on April 15, and a middle-class family is angry because their 82-year old grandmother with Alzheimer's is lying in her own filth in a substandard nursing home because of Medicare "reforms," are we honestly saying that the anger of both sides is equally justified? Has anyone even asked that question?)
It is the product of a heedless national elite so insulated from the consequences of its actions, and so coddled by a feckless national political media, that its actions are seen to have no consequences that matter once you cross the Potomac.
(I'd have felt better about the whole deal if there were one nurse, one urban health-director, one social-worker on the entire commission.) The primary constituencies upon whom this "plan" will fall hardest were not even represented in its development, and they do not seem to factor in at all in the effort to implement it.
The whole debate is taking place in a bell jar of unreality. Only there could Simpson and Bowles be seen as honest brokers, and only there could their "plan" be seen as anything except a new front in the steady looting of the national wealth, a "compromise" between lions and sheep.
And Alan Simpson is not funny. Never has been.