Never Trust a CEO Who Says They Want to Help
The Business Roundtable, a group of CEOs of major corporations, was lauded by mainstream media in 2019 for pledging to prioritize the common good over shareholders. Well, now they’re demanding to protect tax cuts that disproportionately enrich CEOs.
Jamie Dimon, CEO of JPMorgan Chase; Randall Stephenson, then CEO of AT&T; and Dennis Muilenburg, then CEO of the Boeing Company, participate in a Business Roundtable discussion on "Ambitious Innovation," on December 6, 2018 in Washington, DC. (Mark Wilson / Getty Images)
Two years ago, a lobbying group representing the CEOs of the world’s largest companies declared that corporate America must change its ways and commit to building “an economy that serves all Americans.”
Less than two years later, after CEO pay skyrocketed during the pandemic, the same group has launched a multimillion-dollar ad campaign to protect tax cuts that tend to disproportionately benefit CEOs, according to new academic research.
Specifically, the Business Roundtable is aiming to block the popular, modest corporate tax increases in Joe Biden’s American Rescue Plan that would fund public infrastructure investments across the country. The group — which includes companies that paid no federal taxes at all last year — is already running radio ads in the DC area pushing back on Biden’s proposal to raise the corporate tax rate from 21 percent to 28 percent.
The new campaign from the Business Roundtable, a Washington-based trade association that “exclusively represents” corporate CEOs, comes even as one of the group’s most powerful members is saying that the corporate tax rate should be raised.
“Investing In Our Employees”
The Business Roundtable’s roughly two hundred members include chief executives at Wall Street giants, big banks, tech firms, telecom companies, health insurers, drugmakers, oil and gas companies, electric utilities, manufacturers, and national retailers. Notable members include Amazon’s Jeff Bezos, JPMorgan Chase’s Jamie Dimon, and Apple’s Tim Cook.
The group raised nearly $47 million in 2018, according to its most recently available tax return. It spent roughly $17 million on federal lobbying efforts last year.
The Business Roundtable’s president and CEO, Joshua Bolten — who was paid more than $3 million by the organization in 2018 — recently cautioned that “tax increases on job creators would slow America’s recovery and hurt workers.” One of their new ad buy filings warns bluntly: “A tax increase will hurt American workers.”
Of course, the Business Roundtable is not a lobbying group for workers but for their bosses.
The group has pledged to do more for workers and generated favorable headlines in 2019 when it announced that it was moving to redefine the purpose of a corporation to promote “an economy that serves all Americans” and not just company shareholders.
The statement said its members were committed to “investing in our employees. This starts with compensating them fairly and providing important benefits.”
So far, however, the organization does not seem to be prioritizing workers’ well-being. Last year, the organization lobbied Congress to shield businesses from liability if their workers catch COVID-19. More recently, the group pressed Democrats not to include a $15 minimum wage measure in Biden’s first COVID-19 relief bill.
Valuing Tax Cuts Over Jobs and Communities
The new Business Roundtable ad defends the GOP’s 2017 tax law, which slashed the corporate tax rate from 35 percent to 21 percent. The ad says the law “created record low unemployment, higher wages and brought business back to America,” according to Bloomberg News, which obtained a copy of the ad script.
In truth, the tax law signed by Donald Trump did not generate any real economic impact, as economic growth quickly declined. While some Business Roundtable corporate members gave employees small raises or onetime bonuses, companies largely plunged the savings into share buybacks to drive up their stock prices.
The legislation was particularly lucrative for corporate CEOs, according to a recent study by Grinnell College economist Eric Ohrn. “For every dollar the tax breaks generate for a firm, compensation awarded to the highest-paid executives at the firm increases by between 15 and 19 cents,” Ohrn found.
Biden is pushing now to increase the corporate tax rate from 21 percent to 28 percent — which would still be significantly lower than what the rate was before Trump — in order to fund his $2 trillion infrastructure investment plan.
At least one top Business Roundtable member, Amazon CEO Jeff Bezos, has loosely backed Biden’s efforts, saying in a company statement that “we’re supportive of a rise in the corporate tax rate.”
But the vast majority of Business Roundtable members apparently oppose the idea.
The organization recently surveyed its CEO members about the proposed tax hike and reported that “98 percent of CEOs said that an increase in the corporate tax rate from 21 percent to 28 percent would have a ‘moderately’ to ‘very’ significant adverse effect on their company’s competitiveness.”
Meanwhile, at least twelve corporate members of the Business Roundtable paid nothing in federal taxes last year, according to the advocacy group Patriotic Millionaires’ review of data compiled by the Institute on Taxation and Economic Policy.
Those companies include shipping giant FedEx, apparel company Nike, and tech firm Salesforce.
“Back in 2019, the Business Roundtable redefined the ‘purpose of a corporation’ to focus on investments in workers and communities,” said Patriotic Millionaires policy director Dylan Dusseault. “The president’s infrastructure package is a great opportunity for them to make good on that promise. But, big surprise, they don’t seem eager to put their money where their mouth is.”