Chief executives of more than 80 major U.S. corporations, ranging from Boeing to Caterpillar and Allstate, are calling on Congress to cut the federal deficit by boosting tax revenue as well as cutting spending, The Wall Street Journal reports.
The CEOs, in a statement, say for any plan to succeed it must “include comprehensive and pro-growth tax reform, which broadens the base, lowers rates, raises revenues and reduces the deficit.” A successful plan must also limit the growth of healthcare spending and make Social Security solvent, they claim.
The executives who signed the declaration believe tax increases are inevitable no matter which political party wins the White House in the November elections, according to The Journal.
“There is no possible way” to avoid raising taxes, said Mark Bertolini, CEO of Aetna. “You can do the arithmetic a million different ways.”
The manifesto was sponsored by the Fix the Debt campaign, a bipartisan effort inspired by Republican Alan Simpson and Democrat Erskine Bowles, who chaired a 2010 deficit panel appointed by President Barack Obama, The Journal reported.
“Everything should be on the table,” the CEOs argue, eschewing specific proposals for raising taxes or cutting spending, The Journal reported. Several CEOs view corporate tax reform as a way of shifting the tax burden among companies rather than raising revenue, which leaves increases in individual income taxes as the main path for raising revenue.
The CEOs are taking on one of the key differences between the two main presidential candidates. President Obama says tax increases on high-income Americans should be part of any deficit-reduction plan. Republican candidate Mitt Romney is against raising taxes, but supports a tax reform that he says would boost economic growth.
Other business groups are currently calling on Washington to avert the so-called fiscal cliff of across-the-board spending cuts and tax hikes set for January by negotiating a deficit-cutting deal. But they avoid taking a position on the lightning-rod issue of raising taxes.
Instead of backing Obama’s plan to raise the marginal income-tax rates for the top 2 percent of taxpayers, the executives are urging an overhaul of the tax code that cuts deductions, credits and loopholes and generates more revenue.
The executives view the Simpson-Bowles commission plan, which called for about $3 in spending cuts for every $1 of tax increases, an “effective framework” for reducing the deficit, The Journal said.
“As president, [Mr. Romney] will bring his record of bipartisan success to Washington and put us on a path to achieve more than the Simpson-Bowles commission ever proposed—balancing the budget within the next 10 years,” said Romney campaign spokeswoman Amanda Henneberg.
“There’s a strong and growing consensus that the only way to reduce the deficit while also growing the economy is through a balanced approach that includes both tough spending cuts and increased revenue,” said Obama campaign spokesman Ben LaBolt.
Meanwhile, the two candidates have largely avoided talking about the fiscal cliff, barely mentioning it during the three debates, CNNMoney reported
Obama, in the last debate on Monday, said the defense cuts “won’t happen,” but he didn’t give specifics. And neither party is stepping back from its negotiating position.
The fiscal cliff includes $7 trillion worth of tax increases and spending cuts, including a reduction in non-defense spending, the expirations of a payroll tax holiday and extended unemployment benefits.
Economists, including at the Congressional Budget Office, have warned that if Congress doesn’t act to avert the cliff, the economy could topple back into a recession.