Friday feedback: Tax and PACs
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It’s Friday, so some feedback. Former IRS Commissioner Charles Rossotti weighed in after my Wednesday post suggesting President Biden’s spending plans will have to be financed by debt or new taxes. There’s another way, he says—collecting taxes already owed:
“Our plan gets at the heart of the tax gap—upper income people who don’t pay what they legally owe. At $574 billion in 2019 alone, the tax gap is equal to what the lower 90% of all individuals pay in federal income taxes annually. This is manifestly unfair.”
You can find more on Rossotti’s proposal here.
And lots of folks commented on my suggestion that companies not pull out of the political contribution game—because they can be a force for pragmatic compromise on important issues. A sampling of the comments:
“I believe buying access, or the NEED to buy access (even if the money goes to both sides of the aisle) is the root of the problem…We have to… restore some sanity to representative government and unwind myriad ways in which special interests control the narrative.”
“How much did the parties just spend in this campaign? Was it 11 billion? (AM: Actually, $14 billion.) How many people can we feed, clothe, shelter and provide job training with even a portion of that ridiculous sum?”
“At its heart…the primary objective (of corporate campaign contributions) is stability…Businesses want to know what to expect. With that knowledge, they can plan their strategies and tactics for the future.”
A.H. wrote in to remind me that corporations don’t make contributions directly. They do so through political action committees, which their employees contribute to. And for the record, I’m not a fan of the current campaign finance system. I’m just saying big companies are among the more responsible and pragmatic players in that system, and if they alone pull out, it will get worse.
Finally, my friend Shiva Rajgopal, who teaches at Columbia Business School, sent a paper that he says shows corporate lobbying pays off 10 times better than R&D spending, in terms of its effect on the bottom line. Given that finding, “the bigger question is why do we observe so little as opposed to too much lobbying.” His paper is here.
More news below. And check out Susie Gharib’s new interview with Delta CEO Ed Bastian, who is counting on a “big surge in demand” from business travelers in the second half of this year as the vaccine gets rolled out. “People are tired of Zoom meetings.”
President Biden has signed a bunch of executive orders to begin his administration's fight against COVID-19. There's now a much-requested (by airlines) mask mandate on planes, trains and buses. Same goes for government employees and visitors on federal lands and in federal buildings. Incoming international travelers will also have to get a negative test result before embarking, and self-quarantine on arrival. NPR
Elon Musk has made his biggest philanthropic move yet: he's donating $100 million towards a prize for the best carbon-capture technology. Musk is currently the world's richest person, with a fortune of over $200 billion. Naturally, he has asked people on Twitter to suggest ways in which he can give money away. Fortune
Google vs Australia
The paying-news-publishers-to-promote-their-content standoff between Google and Australia's government is getting rather serious. Now Google is threatening to shutter its entire search service in Australia—a far weightier move than just closing Google News, which the company previously did in a similar standoff in Spain. "We don’t respond to threats," responded Prime Minister Scott Morrison. Fortune
Facebook has asked its internal appeals court, the Oversight Board, to weigh in on the future of former President Donald Trump's frozen account. Facebook suspended the account following the Trump-inspired Capitol insurrection earlier this month, saying it would remain locked at least until the day after President Biden's inauguration. Facebook spokesman Nick Clegg: "Given its significance, we think it is important for the board to review it and reach an independent judgment on whether it should be upheld." Fortune
AROUND THE WATER COOLER
A South African high court has dismissed French arms company Thales' attempt to dodge racketeering and money-laundering charges, relating to a 1999 deal that involved former President Jacob Zuma. The trial can now go ahead. Fun fact: Thales is being represented by Barry Roux, who previously defended athlete-turned-murderer Oscar Pistorius. News24
South Africa is paying far more for the AstraZeneca-Oxford University vaccine ($5.25 a dose) than much richer countries (as little as $2.50 a dose). The specific shots that South Africa has secured are those produced by the Serum Institute of India, through a licensing deal with AstraZeneca, which has previously promised to cap its prices at $3 a dose. Guardian
satellite propaganda outlet COVID-19 vaccine Sputnik V has been approved by health authorities in Hungary. That's a first for an EU country. The Hungarian regulator also approved the AstraZeneca-Oxford jab. The country's foreign minister will fly to Moscow today, as contract negotiations get underway. Politico
Fortune's Geoff Colvin takes a sartorial tour through Joe Biden's various looks, as candidate, President-elect, and now President. Each phase has been visually distinctive and clearly well thought-out in terms of messaging. Fortune
This edition of CEO Daily was edited by David Meyer.