Wed December 12, 2012
Survey: Business Leaders Warming To Tax Increases
Originally published on Wed December 12, 2012 4:29 pm
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Negotiations are intensifying between congressional Republicans and the White House. Both sides say they want to find a compromise to end the budget stalemate that's gripped Washington. Both sides are also vying for support from the business community. The White House has reportedly put an overhaul of the tax code on the table.
Meanwhile, NPR's Yuki Noguchi reports on a new survey out today that shows business leaders softening their opposition to tax increases.
YUKI NOGUCHI, BYLINE: James Streitz spent his life believing no good comes from higher taxes. But as the chief financial officer of Tait and Associates, a civil engineering firm, he doesn't want the country to go over the fiscal cliff which could jeopardize his company's construction projects.
JAMES STREITZ: There's going to have to be some compromise done here or we're going to be in a lot worse trouble.
NOGUCHI: Trouble that may throw the economy into recession and the job market into reverse. Faced with that grim alternative, Streitz says tax increases should be a part of a budget compromise.
STREITZ: The only reason I think that the tax increases are necessary to start with would be to satisfy both sides of the aisle.
NOGUCHI: The way he sees it, he's willing to compromise, why aren't politicians?
STREITZ: It's giving them the opportunity to, you know, kind of both of them to step across the aisle and say, I may not completely agree with this but in the spirit of compromise, let's move forward and make a decision. So I like the fact that it's kind of forcing their hand.
NOGUCHI: To be sure, some business groups still vehemently oppose any tax increases. But Streitz's view is held by a growing number of businesses. Yesterday, the Business Roundtable, a prominent group representing CEOs, endorsed a compromise that includes increased tax rates and eliminating deductions.
And in a quarterly survey by Duke University and CFO Magazine, 63 percent of U.S. businesses said they would support the Simpson-Bowles fiscal plan, which favors $1 of tax increases for every $2 of spending cuts.
John Graham is director of that survey.
JOHN GRAHAM: So the reason this is such a surprise is CFOs usually are all about lowering tax rates to spur economic growth - reducing corporate tax rates, reducing individual's tax rates - so there's more money available to spend in the economy and, you know, just have stronger economic growth.
NOGUCHI: Graham says the survey shows businesses are finding a middle ground that politicians can't seem to locate.
GRAHAM: Businesses are really right in the middle, saying we really need a balanced view that's, you know, a combination of the political spectrum here. And so, you know, interesting that businesses are sort of right in the middle kind of clamoring for compromise. It would be nice if the politicians heard their voice.
NOGUCHI: One of those voices is Tom Fitzsimmons, chief financial officer of TMP Worldwide, an advertising and communications company. He says he thinks a reformed corporate tax code could prove better for middle and smaller sized businesses like his because, he says, the current tax system allows huge tax write-offs for multinational companies.
TOM FITZSIMMONS, CFO, TMP WORLDWIDE: Most companies in the U.S. don't have that advantage.
NOGUCHI: His company's clients include those heavily dependent on government and defense spending, which would be affected by spending cuts. But Fitzsimmons also believes his fellow executives understand it's not possible for the government to keep running huge deficits indefinitely.
WORLDWIDE: That's business for us. It's an elemental understanding that all of us run companies and you can either raise revenue or lower expenses, or generally need to do both.
NOGUCHI: And if he and other businesses have to balance their books, he says there's no reason the country shouldn't have to do the same.
Yuki Noguchi, NPR News, Washington. Transcript provided by NPR, Copyright NPR.