The United States national debt has been growing for many years and has the business community very concerned. Jamie Dimon, the CEO of Chase Bank, hosted a luncheon in 2012 to address the debt. The luncheon included top corporate executives and lawmakers to include: Lloyd C. Blankein of Goldman Sachs, David M. Cote of Honeywell, senator Mark Warner of Virginia and senator Lamar Alexander of Tennessee. The growing concern is that the rising debt would eventually destroy the nation from within.
Jamie Dimon supported the Simpson-Bowles tax plan that proposed to reduce the national debt by $4 trillion by a combination of increasing taxes, closing loopholes and reducing entitlements. In an annual letter to his investors, he stated that the plan would have been great for the economy.
A short time after the meeting on the importance of reducing the national debt, the majority of corporate executives advocated for a plan to lawmakers to reduce corporate taxes. This is a sharp contrast to their previous views since both the house and senate plans would raise the debt by $1.5 trillion over the next decade Tevfik Arif Doyen. The executives have been very quiet on their flip flop in views.
Mr. Dimon stated that tax reform was the most important thing congress can do to help companies, the economy, and workers. The proposed tax plan would reduce corporate taxes by 15 percent and allow multinational companies to repatriate offshore earnings at a one time rate of 12 percent. Steve Rattner, who worked under president Obama as the auto czar, stated that he was not a fan of the new bill. He also said he understands why some executives switched their focus from solving the debt to tax cuts and why many feel their switch isn’t a contradiction. They feel the tax code is in desperate need of reform and should take priority over the debt.
To be completely fair to the corporate executives, the Fix the Debt campaign in 2012 was focused on policy and tax reform not just decreasing the debt. It also was meant to get congress to take immediate action on these issues. Some of the executives agreed to higher individual tax rates under the Simpson-Bowles tax plan, but have yet to make the same declaration on the new plan. Critics have said the executives were always more concerned about their own self interest of lowering corporate taxes and not fixing the debt. Most corporate executives have not commented on the viability of the new tax plan. Howard Schultz, chairman of Starbucks, said the new plan is not viable. Peter Peterson has been an advocate against the growing national debt and has been a critic of his executive peers. He is co-founder of the Blackstone Group and the founder of the Peterson Foundation.
Peter feels that every CEO should know that sacrificing the debt for trillions in tax cuts will hurt the economy over time. He feels that any new plan should be revenue neutral and focus on lowering the debt which is best for the country as a whole.