Chief Executive Officer talks truth to Republicans

An echo from the Detroit Free Press- Republican tax plan alert!

Letter to the editor by Todd Carmichael~ re-blog of opinions randomly selected from various newspapers.

How do I know what CEO’s are thinking? I’m one of them.

A little bit about me: I’ve grown a small business into a business with cafés and industrial facilities in six states and the District of Columbia. My company, La Colombe, owns and operates a canned latte manufacturing plant in Western Michigan that produces 140,000 draft latte cans a day (using Michigan dairy) that are shipped to market shelves in every corner of the country. 

And I employ scores of people in almost every income tax bracket. Along the way, I’ve learned a thing or two about how to grow a profitable business that values the people at its core and the communities where we do business.

And I can tell you what no other CEO wants to tell you: the half a trillion dollars of corporate tax giveaways proposed by the GOP aren’t going to do a damn thing for the middle class, nor create a single job.

Because what every CEO knows, but still won’t tell you is this: a tax break for their company simply means a fatter bottom line.

Not jobs. Not investment. Not bringing back the 1950s Norman Rockwell America. Just more money in the pockets of the folks like me.

That’s bad policy, and it’s time to set the record straight.

Hyper Stimulus

The House and Senate have introduced two very similar bills with the goal of “tax reform” and “stimulating the economy,” with the half trillion dollars in corporate tax giveaways, most of which is shouldered on the middle class whose taxes will go up. The wealthy and corporations that will benefit most from this “reform” neither need nor require it.

This “stimulus” clearly falls within the sort of cuts one might expect when the economy needs to be goosed – typically when investment cash supply is low, when interest rates are high or the stock market is slumping or even tumbling.

But what every CEO knows, but will not tell you, is that the reverse conditions are actually true – this is not an economy to goose. If anything, the present business landscape is red hot and over stimulated. Cash and capital is flowing heavy with unprecedented amounts of money looking for a home for investment, interest rates are extraordinary low, and the stock market is at top-row, nosebleed heights.

Corporate Fiduciary Duty

A CEO has a powerful fiduciary duty to return all profits to their shareholders - not to the employees, not the suppliers, not the community and certainly not the unemployed or left behind. Let me say that again: profit goes to shareholders (and the CEO) and not to the employees. When the tax code designed increases corporate profits a single group benefits — their investors. 

The result for the employees, the small business supplier, or any other member of the working and middle class will be the same flat-line growth that they have seen for decades. By increasing the wealth at the top and ignoring the rest of America, Congress will further increase the cavernous gap between the wealthy and the working class.

And finally, what every CEO should tell you, but won’t, is that if your business is teetering on the edge of solvency and the only thing that is holding you together is the rewriting of the tax code, you’re probably going to go out of business anyway. Sure, we all believe in the American Dream, but you’ve got to have a quality product, quality employees and a business system that works to succeed. Don’t wait on Congress to destroy the middle class in tax cuts burden the middle class with higher taxes to give another fat-cat executive a bigger bottom line. I’m a CEO who knows firsthand that this won’t work.

Don’t give corporations a tax break, we don’t need it. Invest where the good investments are, our people.

Todd Carmichael is the co-founder and CEO of La Colombe Coffee Roaster