A new report by the Institute for Policy Studies (IPS) says that the CEOs backing the “Fix the Debt” campaign could see their companies’ bottom lines boosted by $134 billion if they get their way on corporate tax reform.
The report, The CEO Campaign to ‘Fix’ the Debt, examines one particular element of the Fix the Debt campaign that is a favorite of corporate tax cutters – a move toward a “territorial” tax system. Under such a system, companies incorporated in the U.S. would not have to pay taxes on profits generated outside the U.S. According to Citizens for Tax Justice, under this system, U.S. companies would be encouraged to move jobs overseas and use accounting methods to artificially shift profits offshore, reducing their tax liabilities even further.
The IPS report finds that:
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- The Fix the Debt campaign has raised $60 million and recruited more than 80 CEOs of America’s most powerful corporations to lobby for a debt deal that would reduce corporate taxes and shift costs onto the poor and elderly.
- The 63 Fix the Debt companies that are publicly held stand to gain as much as $134 billion in windfalls if Congress approves one of their main proposals – a “territorial tax system.”
- The CEOs backing Fix the Debt personally received a combined total of $41 million in savings last year thanks to the Bush-era tax cuts.
- Of the 63 Fix the Debt CEOs at publicly held firms, 24 received more in compensation last year than their corporations paid in federal corporate income taxes.
President Obama sat down with a group of CEOs on Wednesday (Nov. 14) to talk over the solutions for avoiding the so-called “fiscal cliff.” Some of these CEOs, like Aetna’s Mark Bertolini and General Electric’s Jeffrey Immelt, have signed on to the Fix the Debt campaign, which is promoting a fiscal plan that claims to broaden the tax base, raise revenues, and reduce the deficit.
IPS notes that some Fix the Debt campaign CEOs have said they would trade in their upper-income Bush tax cuts for a territorial system. But this shouldn’t be surprising because “[i]f their companies save billions in tax dollars, corporate profits will soar – and CEO pay will skyrocket too,” more than offsetting the increase in their personal income taxes.