Businesses Pledge to Fight Debt and Spending, Not Taxes

Πηγή: yahoonews

By William Browning

Fri Aug 26, 5:30 pm ET

Big corporations in the United States need to be careful what they wish for. Starbucks CEO Howard Schultz announced over 100 companies have pledged to withhold political donations until Congress and President Obama figure out how to solve the debt crisis.

There's only one problem with their plan. A compromise might include raising taxes on the rich. Many CEOs make over $250,000 per year , an income tax bracket targeted by President George W. Bush for tax relief in 2001. Obama wanted to increase taxes on the wealthiest two percent of Americans by letting the Bush-era tax cuts expire. Instead, Obama had to compromise as Republicans held jobless benefits hostage until he agreed to keep tax rates the same.

Now business leaders want politicians to solve the national debt. Their cry will be heard by both Democrats and Republicans. The GOP will say taxes need to be lower on these corporations, which means budget cuts will have to go deeper. Another solution would be across-the-board tax increases for all Americans instead of just singling out the rich. A third possibility means a combination of more taxes and less spending.

Everyone is fed up with partisan bickering in Washington. The pledge signed by business leaders means nothing as they can choose to contribute limitless amounts of campaign cash to any candidate they see fit. It will be interesting to see which side feels the most threatened by the pledge. Unlimited campaign funds seems to favor Republicans as Mitt Romney was given $1 million by a political action committee. The 2010 mid-term elections also favored much more money raised by GOP candidates.

There is also an advantage in campaign spending when it comes to Obama's run for re-election. He is an incumbent who doesn't need to fight opponents in his own party in a primary election. He can wait until August when a party nominee is decided by voters. If Republicans are already strapped for cash and corporations withhold even more until the debt crisis is solved, the primary season in January may be the key starting point for getting things done in Washington, D.C.

Voters will find out just how much the business pledge means when the Federal Election Commission publishes donations to each candidate every quarter. My bet will be GOP candidates will see a decrease or slow down in campaign finances. Grassroots campaigns may be back if candidates can't get as many donations from large companies.