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Business Roundtable’s Newfound Devotion to Corporate Responsibility Doesn’t Include Paying Taxes

Business Roundtable’s Newfound Devotion to Corporate Responsibility Doesn’t Include Paying Taxes

August 20, 2019

Matthew Gardner
Matthew Gardner
Senior Fellow

Members of the Business Roundtable would like the public to know that they are no longer all about shareholder value and the corporate bottom line. At least that’s what the corporate interest group’s revised “statement on the purpose of a corporation,” released Monday would have us believe.

The truth is, the new statement reads like something Dr. Frankenstein might have written when villagers were outside the castle waving pitchforks. (Their previous statement, written in 1997, was just a photograph of a suitcase full of cash.)

Also duly noted, the words “tax” and “government” don’t appear in the revised statement, which is too bad. But the word “oligarchy” doesn’t appear either, so that’s good news. However, if you squint really hard, the roundtable’s newly declared fondness for “supporting the communities in which we work” could be read as an acknowledgment of the need for a tax system that can pay for needed services.

But it’s not. As the roundtable explained, what it means by “supporting communities” is that corporations shouldn’t pollute so much anymore. The document doesn’t present anything that denotes awareness that our government is on a two-decade streak of budget deficits or that the historic decline of corporate income taxes has contributed to this shortfall,  or that corporate taxes have gone way down because the Business Roundtable has repeatedly lobbied Congress to make them go way down.

The 180 corporate leaders signing the revised statement represent a rogue’s gallery of tax avoiders. Twenty-one of the CEO’s signing yesterday’s letter preside, at this moment, over hugely profitable companies that paid not one cent of federal income tax in 2018. #notadime. The 21 zero-tax companies represented in this statement collectively enjoyed $39 billion of U.S. income last year and collectively received a $2 billion federal income tax rebate.

Companies that, as of yesterday, promise they no longer care solely about profits, but in their most recent financial reports avoided paying even a dime of federal income taxes last year include: Amazon, Chevron, Duke Energy, American Airlines, General Motors, IBM, Honeywell, Deere, Owens Corning and Principal Financial.

These companies, and the Business Roundtable as an organization, beat the drum relentlessly for cutting corporate taxes for years. In 2017, they received more than they could ever have dreamed: the corporate tax rate was cut almost in half, from 35 percent to 21 percent. A new territorial tax system exempted most offshore profits from tax, and instead of paring back corporate tax loopholes Congress expanded them. A year and a half later, these corporate tax cuts appear to have done little to boost employment, capital investment, or the American economy more generally. And already-skeptical American voters are asking what they got in exchange for the deficit-busting tax cuts the biggest corporations are now enjoying.

In this context, it seems sensible that the Business Roundtable would see fit to re-evaluate its long-standing, narrow focus on boosting profits and express some solidarity with working families. What’s remarkable is that an organization that includes members of the financial and auto industries that received huge bailouts 10 years ago could go through this exercise without once acknowledging the importance of adequately funding government—or admitting that its members are responsible in the first place for starving the federal government of needed revenues.