A powerful group of CEOs called on Congress and President Obama on Wednesday to enact sweeping reforms to improve the economy and create jobs, criticizing legislators and the administration for lollygagging on corporate tax reform.
Despite improving job numbers and declining unemployment, CEOs from Business Roundtable, a coalition representing companies with more than $6 trillion in annual revenues, described the recovery as tenuous at best.
"Despite hopeful signs of economic recovery and some public policy progress … America remains mired in a deep jobs crisis," Jim McNerney, president of the Boeing Co., said at a press conference in Washington Wednesday.
A Business Roundtable plan announced at the press conference seeks to cut America's corporate tax rate from nearly 40 percent to the international average of 25 percent and move America to a territorial tax system, where earnings abroad are taxed only in those countries.
"A modern, streamlined, and fiscally responsible tax system will create a more competitive business environment that attracts new investment and supports strong economic growth and job creation," said Bob McDonald, chairman of Procter & Gamble.
Tuesday evening, President Obama expressed a willingness to work with companies that brought jobs to America, and has proposed a plan that would cut the corporate tax rate to 28 percent.
He said he'd work with businesses to "reform our tax system so that we are rewarding companies that are investing here in the United States, making sure that we are able to cut our tax rate here but also broaden the base," but said the process will likely be painful. "Anybody who has been involved in tax discussions in any legislature, but especially Congress, knows that it's like pulling teeth."
No one knows that better than the CEOs, who criticized Washington's inability to get things done and blamed the upcoming elections and a partisan divide for putting the economy in jeopardy.
"America's political system is, at best, moving at a slow crawl," McNerney said. Other countries "are not waiting until after the November elections to make meaningful policy changes, and we shouldn't either."
McDonald was perhaps even more blunt, saying the organization's message to Washington is "simple and straightforward: Get your house in order and get started on the task right now."
Independent analysts say the uncertainty surrounding the corporate tax code has likely kept businesses from hiring as many workers as they should. Profit increases since 2009 and the highest revenues since 2006 have led to hiring increases in recent months, but not as many as some would have hoped.
"If businesses don't know what'll happen with their taxes in the next year, they're not going to make major investments," says Libby Bierman, an analyst at Sageworks, a financial analysis firm. "Most of their money is put towards [hiring] people, and that's one investment they're going to be cautious with."