Corporate Tax

Company America checks its voice on scorching button points, from voting rights to corporate tax will increase

Since the beginning of the year, U.S. companies have stopped donations to Republican lawmakers who opposed certification of the presidential election, expressed their desire to invest in infrastructure, opposed tax increases, and opposed controversial state electoral laws proposed by Republicans. Now the Business Roundtable, a lobby group that represents the managing directors of more than 220 large companies, is planning a digital and radio advertising campaign against Biden’s proposal to increase the corporate tax rate from 21 to 28 percent.

The effect is something like a split screen for those watching America’s largest corporations get caught up on the sidelines in the social and political hand-to-hand combat that employees and the public are calling for.

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“Since the 1950s, people have linked the GOP and big business. It’s stopped working, ”said Jeffrey Sonnenfeld, a professor at Yale University’s School of Management, who organized a phone call over the weekend where more than 100 company leaders discussed ways to show they were against state voting laws.

So far, however, the reactions of companies have varied as to how many specific measures companies have taken in a changing political landscape that could disrupt long-term alliances.

With the exception of taxes and infrastructure, Sonnenfeld said, companies are increasingly contradicting today’s Republican Party when it comes to issues such as the environment, gun safety, immigration, and now voting. “You have no political home. You have to be a lot more pragmatic. They have to be much more purposeful. “

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On Monday, the Business Roundtable published a poll that found that 75 percent of 178 members surveyed said a tax hike would negatively affect their investment in research and development. The group, made up of CEOs from aerospace, manufacturing, technology, retail, finance, and other sectors, claims in a new multimillion-dollar advertising campaign that higher tax bill is holding back growth and making their businesses less competitive reported Bloomberg News.

“We’re not out of the woods with Covid-19, but we’re getting there,” said the 30-second radio spot, according to a script preview from the Washington Post. “And when we emerge, we need an economy that grows and creates opportunities. That requires reliable, consistent, and competitive tax laws for America’s businesses. “

Among other things, Biden has proposed raising the corporate tax rate to fund a $ 2 trillion plan to rebuild the country’s roads, bridges, and other infrastructure. This would partially reverse the corporate tax cut introduced during the Trump administration in 2017. The rate had been reduced by 35 percent after intensive lobbying by the large company.

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“The proposed job creation tax hikes would slow America’s recovery and hurt workers,” said Joshua Bolten, executive director of the Business Roundtable, in a statement.

Steve Rosenthal, a senior fellow at the Urban-Brookings Tax Policy Center, said shareholders received tremendous benefits from the 2017 tax cut. Asking shareholders to return a portion of that profit is a “humble request,” he said. “Nobody likes to pay higher taxes, but these companies can afford to do it. There are record profits and shareholders have seen record runs in their share prices. “

Over the weekend, more than 100 executives from major retailers, airlines and manufacturers gathered online to discuss further measures against restrictive state voting laws, including stopping donations to politicians who support them or delaying investments in states that support those measures say goodbye post reported.

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However, as of Monday afternoon at least, the group did not make any final decisions about the next steps, and many company executives have expressed their opposition to the bills without incurring any financial consequences. The Georgia bill prompted actor Will Smith and director Antoine Fuqua to announce on Monday that they would be pulling filming of their upcoming film, Emancipation, out of the state. The film, directed by Fuqua and produced by Smith’s media company Westbrook Inc. for Apple Studios, is now being shot in Louisiana.

A week after the bill was signed, the Republican-led vote in Georgia has been criticized by a growing number of supporters of voting rights. (Mahlia Posey / The Washington Post)

“We cannot in good conscience provide economic support to a government that passes regressive electoral laws designed to restrict electoral access,” Fuqua and Smith said in a joint statement. “The new electoral laws in Georgia are reminiscent of electoral barriers that were passed at the end of the reconstruction to prevent many Americans from voting.” Apple did not immediately respond to a request for comment.

The weekend call by executives came after several statements by individual companies or groups of executives – including one of 72 black executives and one signed by almost 200 CEOs – had been made against the voting results in recent weeks. After Georgia passed its law, critics initially urged companies to be slow to react and not do enough to prevent the measure from being passed. Critics say this disproportionately affects color pickers’ access to surveys.

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Corporations reluctance to take swift financial action against electoral laws is a sign that social issues like the right to vote for business leaders continue to be a new – and nasty – issue, Ronnie Chatterji, a professor at Duke University School, told corporate activism studied social and political issues.

“The details of how people vote probably wouldn’t even have risen to the C-suite level had it not been for the 2020 election and the claim that there was electoral fraud,” Chatterji said. Compared to corporate taxes that CEOs have campaigned against for years, this is a very new topic for CEOs.

He refers to the recent public approval of Senator Marco Rubio (R-Fla.) To a union work by Amazon employees in Alabama as a sign that traditional alliances between companies and political parties are in disarray.

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“It’s going to be a lot more complex than it was in an earlier era when there was a solid center that business could rely on,” Chatterji said. “The reason CEOs and companies have different positions and span the political spectrum is that we are very polarized. The problems that invigorate Democrats and Republicans – business doesn’t fit well into one camp or the other. “

Companies are driven by their workers to speak up on more social issues, Chatterji said, especially younger ones who expect their employers to speak up on issues they identify with. While coworkers and some Americans view executives as credible actors to weigh up these issues, he cautions that this could change over time as executives become more open on cultural issues.

“When the business becomes more political, it will be tested,” said Chatterji.

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Organizers working with companies on voting issues say their increased participation in the 2020 elections – companies gave workers time to vote, ran awareness campaigns about changes to state electoral law, and even coordinated efforts to get people or food to vote – possibly also prompted some to campaign against state election restrictions.

“You then turn to 2021, and suddenly that work you did in 2020 was under attack,” said Ashley Spillane, president of Impactual Voter Engagement Strategy company and founder of the Civic Responsibility Project. She said options for concrete action beyond statements include direct lobbying by lawmakers; Support for litigation such as joining Amicus Briefs; Donations to voting rights organizations; or potential advertising in support of the proposed federal voting protection.

“What we saw in 2020 is that companies have internalized their responsibility to our democracy,” said Spillane. “I think they are under pressure to get up.”

Hannah Denham contributed to this report.

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