On December 3, 2014, Jim Puzzanghera writes in the Los Angeles Times:
The nation’s top corporate chief executives were slightly less optimistic about the economy’s direction and planned to decrease investments in their businesses over the next six months, according to a survey released Tuesday.
The Business Roundtable’s economic outlook index fell to 85.1 from 86.4 in the third quarter, the trade group said.
It was the second straight quarterly decline for the index, which is a composite measure of the plans of CEOs for sales, capital spending and hiring.
The index ranges from -50 to 150, with a reading above 50 indicating the economy is expanding. The long-term average has been 80.3.
“The economy ended the year essentially where it started, performing below its potential,” said AT&T Inc. CEO Randall Stephenson, the group’s chairman.
The 129 CEOs surveyed said they expected the economy to expand about 2.4% next year, the same as they expected for this year.
Growth so far this year is averaging about 2.1%, but that figure was dragged down by a sharp first-quarter contraction.
Just 36% of executives said they planned to increase capital spending in the next six months, down from 39% in the third quarter, the survey said. And 13% said they planned to decrease spending, up from 10% in the third quarter.
Capital investments by businesses is key to economic growth and overhauling the corporate tax code would help boost that spending, Stephenson said.
“Our CEOs identified U.S. tax policy as the most significant barrier to more investment,” Stephenson said.
The Business Roundtable is pushing for the corporate tax rate to be lowered. The U.S. rate is 35%, the highest of any advanced economy.
The group wants that reduced to 25% and is ready to back the elimination of some corporate tax breaks to get the rate lowered, Stephenson said.
Republicans and Democrats generally agree the corporate tax rate should be lowered, but how far and with what trade-offs are the subject of sharp debate.
Another Business Roundtable priority is for Congress to grant the president so-called Trade Promotion Authority, which would make it easier to negotiate and approve trade deals, Stephenson said.
Despite the economic concerns, 40% of CEOs said they planned to increase employment at their businesses over the next six months, the survey found. That was up from 34% in the third quarter.
But the fourth-quarter figure was below the 43% who said they planned to boost hiring in the second-quarter survey.
http://www.latimes.com/business/la-fi-business-roundtable-ceo-confidence-economy-20141202-story.html
http://www.latimes.com/business/la-fi-obama-business-tax-reform-economy-20141203-story.html
This is just another example of how inadequate our corporate and tax policies are, and how our priorities are wrong. This is all about extending huge tax breaks for corporations with no stipulation for broadening ownership of America’s corporations. Driven by the Republican Party, whose mantra is to protect corporate ownership concentration and profitability of those who presently OWN America––the wealthly capital ownership class, further reducing the corporate tax rate WITHOUT eliminating all tax loopholes and subsidies and the stipulation that all corporate profits by fully paid out as dividend earnings to the owners of the corporations, will result in further corporate ownership concentration and enrichment of the wealthy ownership class at the expense of the vast majority of working Americans.
Of course, the call for lowing corporate tax rates is ALL in the name of JOB CREATION, and Republicans blame outsourcing and the loss of jobs on the tax rate that American corporations pay. But if the Republicans and the Democrats really want to end investment and job outsourcing, then why not completely eliminate the corporate income tax in exchange for paying out fully the dividend earnings to the owners of the corporation, and replace retained earning and corporate debt financing of economic growth with the issuance and sale of new corporate stock that represents the to-be-formed physical capital assets that would grow the economy? This would refocus investment in American corporations who want to grow the economy in our homeland, result in the creation of new capital owners who would make up a broad corporate ownership base, effectively empower the new owners to own the “machines” that are destroying jobs and devaluing the worth of labor, and effectively stimulate REAL (not make-work) employment opportunities as we build a FUTURE economy that can support general affluence for EVERY child, woman, and man.
How can we simultaneously grow the economy and create new capital owners?
We will need to reform our broken system in which economic growth is hindered by the slavery of “past” savings as the primary means necessary to financing economic growth. We need to adopt new policies to provide the necessary system reforms to abate the further concentration of wealth-creating, income-producing capital ownership and ensure that continual broadened capital ownership and corresponding wealth building occurs as the economy expands.
The most significant system reform needed is to equally empower EVERY citizen, without the requirement of “past” savings or capital asset equities, to acquire personal ownership shares in FUTURE wealth-creating, income-producing capital asset growth. This can be accomplished using insured (facilitated with private capital credit insurance or a government reinsurance agency––ala the Federal Housing Administration concept), interest-free capital credit loans issued by local banks repayable out of the FUTURE fully paid out dividend earnings generated by profitable investments in the corporations growing the economy. This objective can be achieved with the passage of the proposed Capital Homestead Act.
Support the Capital Homestead Act at http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-a-plan-for-getting-ownership-income-and-power-to-every-citizen/ and http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-summary/.
