Today, President Obama will meet with the leaders of a dozen of America’s largest companies to discuss solutions to the federal debt crisis. Soon after, the president may claim that business leaders support his plan to hike income taxes, even though those tax hikes would hit millions of businesses. If this sounds surprising, it shouldn’t.
Present at this White House conference will be top executives from Aetna, Xerox, American Express, Wal-Mart, Honeywell International, General Electric, Dow Chemical, Procter & Gamble, Ford, PepsiCo, IBM and Chevron. Not included in the invite list: a single representative from one of the country’s 27.5 million small businesses. Not one.
It’s no surprise that Obama’s hand-selected group of executives would agree with his budget plan; their companies benefit from the government’s reckless spending policies and would gladly accept their small-business competition footing the bill in the form of higher income taxes.
Seven of the 12 companies represented at today’s meeting benefit directly from a total of 318 federal contracts, bringing in revenues ranging from $218 million to $2.8 billion each year. Another, American Express, received $3.4 billion in taxpayer money through the president’s ill-advised bailouts.
While these big businesses directly benefit from federal spending, they hardly pay taxes. Thanks to million-dollar lobbying campaigns, none of them pay close to the standard 35 percent corporate tax rate, and some reportedly pay as little as 5 percent.
In fact, The New York Times reported that in the 2010 fiscal year General Electric did not pay a single dollar in corporate taxes while making $5 billion domestically and $14 billion worldwide. This occurred as CEO Jeffrey Immelt, who is at the White House today, served as chairman of Obama’s Council on Jobs and Competitiveness.
Immelt famously celebrated Obama’s first election by telling his investors: “The interaction between government and business will change forever. In a reset economy, the government will be a regulator; and also an industry policy champion, a financier and a key partner.”
When your business model depends on government spending, you need to find a way to keep the money flowing to Washington — like Obama’s plan to hike taxes on small businesses that file income taxes at the individual level. Unable to afford the lobbyists and connections necessary to avoid taxes or acquire hefty government contracts, these businesses will face the burden of paying down a national debt run up by collusion between big business and big government.
Higher taxes would force small businesses to stop hiring new employees, lay off existing ones and increase prices for consumers. That could send our struggling economy spiraling back into a recession.
For months, the Obama administration has spent taxpayer dollars to send Timothy Geithner, Jack Lew and others to lobby business leaders for their support of the president’s proposed tax increases.
Today, they are bringing together a small group of those leaders, such as Xerox CEO and Obama contributor Ursula Burns and Mark Bertolini (whose insurance company Aetna stands to earn significant revenue through the mandates in Obama’s costly health care plan), with the hope that the president can claim the “business community” wants higher taxes.
But the truth is these are big-business leaders who are already on board with big government. Don’t be surprised when they come out in favor of higher taxes on their small-business competitors.
William Weir is a researcher at American Commitment.