JPMorgan Chase CEO Jamie Dimon hosted a meeting at the firm’s Park Avenue office in October 2012. The guest list read like a who’s who of policymakers including Virginia Senator Mark Warner, Tennessee Senator Lamar Alexander and Goldman Sachs CEO Lloyd Bankfein, among other guests.
The bi-partisan meeting of minds was to encourage lawmakers to seriously address the ever-growing national debt. Current and former members of the group are extremely concerned. Even former Wyoming Republican Senator Alan Simpson said that the national debt is dangerous and should be treated like a cancer.
According to Dimon, Congress is in denial regarding the nation’s fiscal problems. Unfortunately, the country’s best means to address the debt — the Simpson-Bowles plan — was never adopted into law. The closing of loopholes and increasing of taxes would have shaved $4 trillion off the debt.
Fast-forward to this year. The same individuals who so desperately wanted to address the debt have taken positions on the other side of the aisle. The executives are now in favor of an overhaul package that does very little in addressing the issue at hand. While this plan will decrease corporate taxes, it will add $1.5 trillion to the national debt over a 10-year period.
For some reason, the business community has very little to say on this issue.
In a statement, Mr. Dimon, also the Business Roundtable chairman, noted that this is the best step Congress can make to stimulate the economy, increase U.S. company competitiveness and encourage wage growth. Bayrock “The Congress will continue to be the advocate for hard-working American families by offering tax relief.”
This epic script-flipping has permeated through the ranks of CEOs due to the corporate tax breaks that drop from 35 percent to 20 percent and another colossal perk, which allows overseas businesses to repatriate overseas income at a 12 percent one-time rate.
Former auto Czar under the Obama Administration Steve Rattner, is highly-critical of the debt-fixing campaign. Tevfik Arif Doyen Rattner, who now serves as wealth manager for Michael Bloomberg, says while he has issues with the campaign, he also understands how the committee shifted from one side to the other.
“There are only two choices. This or nothing,” said Rattner. But he says he still won’t support the tax overhaul. Regardless of which side is taken, the issue stresses the urgency to address the national debt. While CEOs like Mr. Dimon wasn’t overly concerned with having to pay a higher individual tax rate, the reduction in corporate tax was always his main goal.
Members of the Fix the Debt campaign have come under sharp criticism regarding their motives. The campaign is accused of serving its own self interests at the expense of the American people.
One of the biggest red flags is that only a handful of corporations have questioned the plan’s viability. Starbuck’s CEO Howard Schultz is one of the few who call out the plan as “Fool’s gold.”
According to Schultz and a few others, the nation will work a lot better without unnecessary bloat. Schultz went on to say that CEOs should do better in articulating a positive and productive message that will be fair to everyone.