By Richard Rubin
LOUISVILLE, Ky. -- Large companies, looking for every angle to
prod Congress into making the corporate-tax changes they have been
seeking for years, are turning to some in-house muscle: employees
and customers.
Beyond efforts by corporations' lobbyists and a television-ad
campaign run by the Business Roundtable, an association of CEOs,
companies are now seeking to rally broader public support for
business-tax cuts. They are inviting senior lawmakers to their
facilities this summer and encouraging workers to contact their
representatives in Congress.
"We believe this issue's so important that you've got to get
engaged. We can't ensure success. We can ensure that our point of
view and our customers' point of view is heard," David Abney, the
chief executive officer of United Parcel Service Inc., said in a
brief interview Tuesday.
Business executives, though wary of direct connections with the
White House after President Donald Trump's comments about
white-nationalist protesters last week, remain deeply involved in
promoting one of his major policy objectives.
Mr. Abney hosted Rep. Kevin Brady (R., Texas), chairman of the
Ways and Means Committee, at the company's global air hub in
Louisville and bolstered the chairman's tax-code pitch. The lower
rates and permanent changes Mr. Brady envisions, he said, would
encourage UPS to accelerate already-planned domestic
investments.
Mr. Abney provided Mr. Brady with a forum to speak to more than
100 employees in an airplane hangar. The lawmaker also fielded
questions from Louisville-area business executives that use UPS,
toured some of the 155 miles of conveyor belts and saw parcels
headed to his hometown's ZIP Code.
"You leave tax reform just to Washington, it won't get done,"
said Mr. Brady, who was joined by Rep. Andy Barr (R., Ky.) and Rep.
Trey Hollingsworth (R., Ind.).
Before Congress' fall push for a tax bill, Mr. Brady has been
busily adding to the 2.5 million frequent flier miles he mentioned
to the UPS employees. He visited alcohol maker Brown-Forman Corp.
in Kentucky on Tuesday, following a visit to Best Buy Co. in
Minnesota last week and a speech at former President Ronald
Reagan's California ranch.
Mr. Brady plans to head to Dallas Wednesday for a similar
employee town hall at AT&T Inc. and a local Chamber of Commerce
event. House Speaker Paul Ryan (R., Wis.), meanwhile, is scheduled
to be in Oregon at Intel Corp. on Wednesday before heading to
Everett, Wash., Thursday to meet with workers at Boeing Co.
Businesses can have a tough case to make in connecting the
corporate-tax cuts they seek with benefits for the broader
public.
Companies and Republicans argue that corporate tax cuts would
help workers because they would encourage productivity-boosting
investments and lead to wage growth in the long run. Treasury
Secretary Steven Mnuchin said on Monday that most economists think
labor pays 80% of the corporate tax.
Official estimates by the congressional Joint Committee on
Taxation and the Treasury Department point in the opposite
direction, showing that owners of capital pay 75% to 82% of
corporate taxes.
Mr. Abney said he thought UPS employees -- more than 300,000 in
the U.S. -- understood the broader benefits of the tax changes the
company seeks.
"We talk to them about how it benefits our customers," he said.
"It will create more packages for us. That creates more jobs and
that's something that every UPSer can understand."
Bill Samuel, a government affairs executive at the AFL-CIO, said
workers should be wary of these arguments from executives and
conscious of the ultimate cost.
"They should be skeptical that they're not hearing the full
story," he said. "They'll pay for them in decreased services."
Companies don't all agree on the details of a corporate tax
bill, and their positions are bound to fracture somewhat as soon as
Mr. Brady releases legislation, which could happen next month. Mr.
Brady said he wasn't sure yet whether lawmakers and Mr. Trump's
administration would unveil a more detailed framework next or
whether he will start by releasing a bill and voting in the
committee.
At least for the moment, large companies are united around
lowering the 35% corporate-tax rate and lightening U.S. taxes on
companies' foreign income. Both features make the U.S. an outlier
among developed nations, which have lowered tax rates and adopted
so-called territorial tax systems that generally don't reach
outside their own borders.
The challenge will come as Mr. Brady and other Republicans try
to make up the revenue lost from those changes. Mr. Brady said
Tuesday that he still wants to limit companies' ability to deduct
interest, an idea that has drawn opposition from parts of the
real-estate, finance and agriculture industries.
Companies such as UPS, which is part of a coalition emphasizing
corporate-rate reduction, report relatively few federal tax breaks
and would likely come out ahead from most forms of a rate-lowering,
base-broadening change. Technology companies and pharmaceutical
firms, which have prospered in part by booking profits in low-tax
foreign countries, have more to lose.
"We think it's the best opportunity and we're going to do
everything we can to get it passed," Mr. Abney said.
Write to Richard Rubin at richard.rubin@wsj.com
(END) Dow Jones Newswires
August 22, 2017 18:48 ET (22:48 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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