Wednesday, May 25, 2022
HomeUncategorizedSome companies sit out the fight over democrats’ tax increases

Some companies sit out the fight over democrats’ tax increases

Business lobbyists are pushing to derail about $800 billion in new taxes that come with President Biden’s spending bill, but along with opposition from Democrats they are facing an added challenge: division within their own ranks.

The largest Washington industry associations including the U.S. Chamber of Commerce oppose Mr. Biden’s roughly $2 trillion tax-and-spend package. But some major U.S. companies are on the sidelines, in part because they support other provisions in the bill to allocate hundreds of billions of dollars to combat climate change.

Companies backing the climate measures include General Motors Co., Cummins Inc. and Carrier Global Corp. along with some Wall Street firms and Silicon Valley companies such as Inc., Google parent Alphabet Inc. and Meta Platforms Inc., as Facebook recently rebranded itself.

Cummins, which makes diesel and alternative-fuel engines and power equipment, said its support for federal spending on climate-change measures outweighs its opposition to the tax increases.

“Obviously there are elements that we dislike, but overall we support it, primarily driven by those climate-change provisions,” said Jon Mills, a spokesman for the Indiana-based company.

Other executives said that while they don’t support the tax increases, they won’t lobby against them so as not to jeopardize the chance that the climate-change measures are enacted. That has undercut what might otherwise be solid business opposition to Mr. Biden’s tax-and-spending plan.

“A lot of companies are putting the political perception of what they do above profits,” said David Rehr, a one-time corporate lobbyist who teaches about advocacy and interest groups at George Mason University. “They have opened the door to significant tax liability, and they will have no one to blame but themselves.”

The decision by the companies to refrain from lobbying against the broader Democratic proposal to win funding for climate measures is the latest sign of changes in American businesses.

In years past, companies typically gave priority to public policy matters that affected their bottom lines, such as opposing tax increases and new regulations. Now, more companies are wading into other issues such as community policing and funding for social services.

Congress late Friday gave final approval to a roughly $1 trillion infrastructure-spending measure that clears the way for Democratic leaders to focus on Mr. Biden’s broader tax-and-spending legislation, which they hope to vote on before Thanksgiving.

If approved, the broader bill will move to the Senate, where it faces an uncertain future because of opposition from Republicans and a handful of Democrats.

The broader bill addresses many parts of the president’s agenda, including roughly $555 billion to address global warming and measures aimed at reducing income inequality and improving public education. Democrats plan to fund some of the new spending by increasing taxes on companies and wealthy individuals.

For nearly 50 years, businesses and their Washington lobbyists have been mostly united in opposing any legislation to increase taxes or expand the size of the federal government.

But now the fight against the social-spending and climate legislation is being waged largely by industry trade groups and individual sectors targeted by the legislation.

Tobacco companies and convenience stores oppose a tax increase on tobacco and vaping products that aims to raise about $9 billion over 10 years.

Lobbyists for the oil industry are trying to block a tax change that would cost the industry billions by eliminating deductions they now receive for taxes paid overseas.

Pharmaceutical firms are lobbying against a measure that could cost them $250 billion over a decade by lowering the costs of drugs purchased by the government’s Medicare program.

The opposition to Mr. Biden’s package is being led by the Chamber of Commerce, the National Association of Manufacturers and the Business Roundtable, which is composed of more than 200 chief executives representing a range of America companies.

Neil Bradley, the chamber’s executive vice president and chief policy officer, acknowledged that some U.S. companies are sitting out this fight.

“Invariably, in any major piece of legislation, people make their own independent judgments, and it is not unusual for some of them to come to different conclusions,” Mr. Bradley said.

“We look at this from the totality of the business community, and for the totality of the business community, it is still bad,” he said.

Joshua Bolten, president and CEO of the Business Roundtable, said the plan would “seriously undermine U.S. growth, competitiveness and jobs.” But while the group formally opposes the plan, there are cracks within its ranks.

Several of the roundtable’s CEO members have spoken in favor of elements of Mr. Biden’s agenda, such as increased spending on child care, early education and climate change.

General Motors, for example, backs Mr. Biden’s overall plan as well as a measure in it that would expand a tax credit for purchasing electric vehicles manufactured in union-run plants.

“GM supports the goals of the framework, and, critically, we support the provisions that accelerate the adoption of electric vehicles and establish the U.S. as a global leader in electrification today, and into the future,” the company said.

GM also said it “supports the Business Roundtable in their efforts to support sound public policies that promote a thriving U.S. economy and supports the U.S. workforce.”

Mary Barra, the CEO of GM, was recently elected to serve as the chair of the Business Roundtable, with her two-year term starting in January.

Other members of the Business Roundtable who have backed the climate-change provisions or other measures in the bill include Cummins, Levi Strauss & Co., Carrier Global and Alphabet.

Chip Bergh, the chief executive of Levi Strauss, an outspoken supporter of national paid leave, said companies are more frequently advocating for government policies that improve their employees’ lives.

“I think companies today have a much bigger role to play in this world,” he said during a recent WSJ conference. “Businesses can make a difference…And it’s the right thing to do.”

Nick Clegg, vice president of global affairs for Facebook, wrote in a recent blog post that “it is our responsibility to help influence policy and technology that will not only impact the carbon footprint of our business, but of the global community.”

Many corporate CEOs have been in Glasgow, Scotland, for the COP26 climate summit, including Barbara Humpton, CEO of industrial firm Siemens USA, who said she supports the climate provisions in the tax-and-spending bill.

“This is a time for the private sector and government to step up and work hand-in-hand to reduce emissions and execute climate-forward business strategies as these efforts set the stage for decarbonizing the economy, boosting U.S. manufacturing, creating jobs and increasing equity,” she said.

Rich Lesser, global chair and former CEO of Boston Consulting Group, who also is attending the conference, said that investors, employees and governments are expecting more of business.

“I’m very supportive of ambitious climate-change legislation,” he said, “but I think there are a lot of details still to work out.”


This story has been published from a wire agency feed without modifications to the text

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