WASHINGTON -- Congressional Republicans' opposition to any tax rate hike on the top two percent of earners shows few signs of letting up as the debate wears on. But the beneficiaries of that opposition, the nation's wealthiest executives, have themselves begun opening up to the possibility of a rate hike.
On Tuesday, FedEx Chairman and CEO Fred Smith, an adviser to Sen. John McCain's presidential campaign, said that the notion that tax hikes on the richest Americans would kill jobs was simply "mythology."
And on Monday, a gathering of the nation's top defense executives took a surprising turn when they endorsed tax rate increases on the wealthy and cuts of up to $150 billion to the Pentagon's budget. Top executives from Northrop Grumman, Pratt & Whitney, TASC and RTI International Metals appeared at the National Press Club at an event organized by the Aerospace Industries Association, the top defense contractor lobbyist.
David Langstaff, CEO of TASC, said that the executives were speaking out because so far leaders of the defense industry were "talking a good game, but are still unwilling to park short-term self-interest." After the event, he told a defense reporter for Politico that tax rates need to go up.
“In the near term, [income tax rates] need to go up some,” Langstaff said. "This is a fairness issue -- there needs to be recognition that we’re not collecting enough revenue. In the last decade we’ve fought two wars without raising taxes. So I think it does need to go up.”
David Hess, head of Pratt & Whitney, said his parent company, United Technologies Corp, believed personal income tax rates should be on the table; Dawne Hickton, CEO of RTI, said he would back a rate hike if it led to a deal.
The CEOs join other high-profile executives who are willing to chip in more. Following a meeting with President Barack Obama last week at the White House, executives emerged to endorse higher rates. "There needs to be some revenue element to this, and [Obama] started with rates," said Joe Echeverria, CEO of Deloitte LLP. "And he started with rates on what we would define [as] the upper two percent … that we have to pay our fair share. And I think everybody was in agreement with that notion."
AT&T CEO Randall Stephenson, who was also at the meeting, said in a statement that a deal "will require a compromise involving an increase in both tax rates and revenue."
Goldman Sachs Chief Executive Lloyd Blankfein, meanwhile, told CNN after the meeting that "if we had to lift up the marginal rate, I would do that."
When asked Wednesday about increasing support among wealthy executives for higher taxes on the rich, Republicans on Capitol Hill showed no signs of letting up.
Sen. John Thune (R-S.D.) said he had not heard the CEOs' remarks this week but insisted he would not support rate increases. He would rather see revenue generated through capping deductions, he told The Huffington Post.
"The reason deductions is a more attractive way to do this is because it doesn't hit small businesses nearly as hard as rate increases do," Thune said. "That is a concern to me, because ultimately what we need to be thinking about is economic growth. Do our policies inhibit or facilitate economic growth? And rate increases on small businesses are going to be counterproductive in terms of growing the economy and creating jobs."
Sen. Marco Rubio (R-Fla.) struck a similar chord with respect to rates, saying he would not support any deal allowing tax rates for the top two percent to expire.
"I'm deeply concerned that raising rates or further complicating the tax code is going to make it harder for us to generate the revenue we need to get out of this hole that we're in," Rubio said in an interview. "To me, it's not about a pledge -- it isn't about protecting millionaires and billionaires. It's about creating new taxpayers, because that's the only way we're going to get out of this."
But Sen. Dan Coats (R-Ind.) was slightly more flexible. While he reiterated the need for comprehensive tax reform, the senator acknowledged that he did not think restructuring the tax code would be possible before the end of this year, when the Bush-era tax cuts are set to expire.
"It's very hard to see that we can get that done in a quick two to three week process here. So I'm hoping that whatever comes down will have enforceable instructions that certain goals must be reached through comprehensive tax reform at a date certain in 2013," Coats told HuffPost. "To cherry-pick right now on tax would be -- what we'd have to do is come back and revisit and revise, and we need more certainty."
Sen. John McCain (R-Ariz.) said he did not want to deal in hypotheticals, but added that he has been considering the opinions of a wide variety of sources. Asked about executives expressing a willingness to see their rates go up, he responded, "I am always glad to receive advice … I can't speculate on what might happen, [but] I have some confidence in the Speaker and Sen. McConnell in arriving at a resolution."
Still, some Republicans have broken with their party and indicated their support for accepting President Barack Obama's proposal to extend tax cuts only for the first $250,000 of income. Last week, Rep. Tom Cole (R-Okla.) urged fellow Republicans to agree to the president's tax plan, and since then a number of Republicans have made similar statements, including Sen. Olympia Snowe (R-Maine.), Sen. Tom Coburn (R-Okla.), Rep. Kay Granger (R-Texas) and Rep. Robert Dold (R-Ill.).
Also on HuffPost:
House Speaker John Boehner (R-Ohio)
Commenting on Occupy Wall Street and the redistribution of wealth on ABC's "This Week" recently, <a href="http://abcnews.go.com/Politics/week-transcript-speaker-john-boehner/story?id=14892830&page=5#.TswHj3NPkqV" target="_hplink">House Speaker John Boehner said</a>: <blockquote>Come on. The top 1 percent pay 38 percent of the income taxes in America. You know, how much more do you want them to pay? Well, I'll tell you what: Let's take all the money that the rich have, all of it. It won't even put a dent in our current budget deficit, much less our debt.</blockquote>
Rep. Larry Bucshon (R-Ind.)
Rep. Larry Bucshon <a href="http://gcdailyworld.com/story/1786079.html" target="_hplink">said in an interview</a> with a local Indiana paper that the tax code needs to be simplified, and he invoked the Republican party line that the wealthiest Americans are creating jobs: <blockquote>I'm not for raising taxes on one sector of the economy. I think right now when you have a high unemployment and you raise taxes on the higher income earners, and they are not going to create any jobs. Arguing right now that the higher income earners aren't paying their fair share is not true. The data shows that. The top 1 percent of income earners are paying about 38 percent of the taxes. The top 10 percent are paying about 70 percent of the taxes.</blockquote>
Rep. Mike Kelly (R-Pa.)
During an House Education and the Workforce Committee markup, <a href="http://www.youtube.com/watch?v=CEArFmRDtrw&feature=youtu.be" target="_hplink">Rep. Mike Kelly made a plea</a> to "stop railing against the really wealthy": <blockquote>I've got to tell you something. As a guy who has had to pay his own way his whole life, I am greatly offended by the idea that somehow somebody in Washington knows how to spend my money better than I do. That somebody in Washington knows how to regulate me to the point where I can't even borrow money anymore. You want to talk about people who are afraid? The small banks. They're scared to death to do anything. Why? Because their government has such onerous regulations on them anymore that they don't know about the rules and the regulations that have been put through or haven't even been written. So when you want to sit back and talk about these wealthy, evil people ... you want them to spend money? Make their future certain.</blockquote>
Rep. Scott DesJarlais (R-Tenn.)
Commenting on President Barack Obama's proposed jobs bill in September, Rep. Scott DesJarlais also <a href="http://webcache.googleusercontent.com/search?q=cache:uHUJCTcKdokJ:www.wbir.com/rss/article/183289/2/TN-lawmakers-reaction-mixed-on-Obama-speech-+&cd=1&hl=en&ct=clnk&gl=us&client=firefox-a " target="_hplink">used the "job creators" line</a>. The congressman argued that wealthy Americans are "shouldering the burden" by "already paying the lion's share of taxes, and taxing them more is going to hurt jobs."
Rep. Blake Farenthold (R-Texas)
Two months ago, a handful of local Democrats protested outside Rep. Blake Farenthold's office in opposition to the proposed Buffett Rule Act, which would allow taxpayers to make donations with their income tax returns to help pay down the federal public debt. The bill was named after billionaire Warren Buffett, who has said he should be paying more in taxes. GOP lawmakers responded by suggesting wealthy Americans voluntarily donate extra money when they file their tax returns. "I think everybody is paying their fair share," <a href="http://www.kiiitv.com/story/15591779/local-democrats-stage-protest-on-congressman-farenthold" target="_hplink">Farenthold said</a>, adding, "And before we look at raising taxes on anybody, we've got to get the government spending under control. There's no point in pouring more money into something when it's hemorrhaging out the other end."
Rep. Ann Marie Buerkle (R-N.Y.)
In March, months before the Occupy Wall Street movement arose, Rep. Ann Marie Buerkle <a href="http://www.syracuse.com/news/index.ssf/2011/03/half_applaud_half_jeer_at_rep.html" target="_hplink">expressed sadness</a> at the class warfare in America. "The middle class is being screwed," said the congresswoman at a town hall meeting, but added that the wealthy aren't to blame. "Why do we have class warfare?" she said. "Why do we want to punish the rich? They worked hard for their money."
Rep. John Fleming (R-La.)
Rep. John Fleming made more than $6 million last year, according to the <em>Wall Street Journal</em>. In September on MSNBC, he <a href="http://www.rawstory.com/rawreplay/2011/09/tea-party-rep-only-400000-left-after-i-feed-my-family/" target="_hplink">used himself as an example</a> of why he opposes raising taxes on millionaires: <blockquote>The amount that I have to reinvest in my business and feed my family is more like $600,000 of that $6.3 million. And so by the time I feed my family, I have maybe $400,000 left over to invest in new locations, upgrade my locations, buy more equipment.</blockquote> MSNBC's Chris Jansing responded that the average American makes more like $40,000, $50,000 or $60,000 a year, to which Fleming responded: <blockquote>Again, class warfare never created a job. That's people that will not get jobs. This is all about creating jobs. It's not about attacking people who make certain incomes. You know, in this country most people feel that being successful in their businesses is a virtue, not a vice. And once we begin to identify it as a vice, this country is going down.</blockquote>
Rep. Dan Benishek (R-Mich.)
In August amidst the heated debate over raising the debt ceiling, Rep. Dan Benishek <a href="http://www.petoskeynews.com/news/pnr-benishek-delves-into-debt-ceiling-vote-federal-budget-during-forum-20110824,0,4643945.story" target="_hplink">addressed federal spending</a> at a public forum in Michigan. The congressman said that he would like to ease up on taxing corporations' foreign earnings and that he disagrees with raising taxes on oil companies. <blockquote>I think oil companies pay their fair share. I can understand where the oil company wants to deduct the cost of drilling a well. That's one of the tax breaks for oil companies, the subsidies. They get to deduct the cost of the well the year you drill.</blockquote>