Wednesday, December 13, 2017
Business

Big CEOs: Bending now on taxes may revitalize economy ahead

A prominent business lobby representing CEOs of the nation's biggest corporations urged Congress and the White House to consider raising taxes to avert the fiscal cliff looming in just 18 days.

Many of those Fortune 500 CEOs run companies, from Duke Energy and Wal-Mart to Bank of America and Humana, that employ a sizable chunk of Florida's 8 million-plus workforce.

In all, more than 160 CEOs signed letters from the business group called the Business Roundtable calling for "principled compromise" in accepting some tax increases and spending cuts. And if lower corporate taxes come along for the ride, all the better.

It's one more sign a cliff compromise may be materializing. The same business group earlier pushed for expiring tax cuts to be extended for one year. Politically, corporate CEOs blessing tax hikes (and spending cuts) could help Republicans in Congress, who now, in effect, can say: "Well, if it's okay with CEOs, it's okay with us."

"As CEOs of companies representing more than $7.3 trillion in annual revenues and more than 16 million employees, we write to express our belief that the United States will suffer significant negative economic, employment, and social consequences for going over the fiscal cliff," states the CEO-signed Business Roundtable letter to the leaders of Congress. "In many cases the damage will be long lasting, if not permanent. But it does not have to happen."

The letter urges compromise, something Washington has forgotten how to achieve.

"We recognize that part of the solution has to be tax increases," Honeywell CEO David Cote said on a conference call. "That's the only thing that allows a reasonable compromise to be reached."

CEO Jamie Dimon of JPMorgan Chase, the nation's largest bank including a rapidly growing presence in Florida, told CNBC on Wednesday morning that the U.S. economy could grow at a much healthier 4 percent rate and monthly job creation could get above 200,000 if Washington politicians can act to avoid the fiscal cliff.

The cliff refers to automatic tax hikes and spending cuts that take effect at the start of 2013 if federal leaders do not agree on a different plan.

Florida-based company CEOs who signed off on the letters include Clarence Otis Jr. of Orlando's Darden Restaurants, which owns Red Lobster and Olive Garden chains among others; James Robo of NextEra Energy, the parent of Florida Power & Light in South Florida; Michael Ward of Jacksonville's CSX Corp., a major railroad transportation business; and Michael Kasbar of Miami's World Fuel Services.

Of course, these CEOs may find it easier to absorb the cost of higher taxes given their hefty annual compensation from their companies.

Darden's Otis received just over $8 million. NextEra's Robo, recently promoted to CEO, was paid about $5.7 million. CSX's Ward earned $8.6 million. And World Fuel's Kasbar, also recently promoted, got just over $5 million.

After the letters became public, critics faulted the Business Roundtable for accepting higher taxes that could hurt small businesses.

The Fortune 500 lobby's response? Bend a little. The best thing that could happen to the U.S. economy right now is to find a way not to cascade over this fiscal cliff.

Contact Robert Trigaux at [email protected]

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