US Corporates Condemned For Tax Cut Lobbying

by Leroy Baker, Tax-News.com, New York

06 November 2001

The US corporate and banking sectors have been condemned for their aggressive lobbying in the wake of the September 11th terrorist attacks.

Although the American economy is floundering, with several industries genuinely stricken, there has been widespread condemnation of the bandwagon-jumping antics displayed since September, as industry after industry has demanded tax cuts and subsidies at a time when the country is supposed to be pulling together.

Speaking to the New York Times, Richard Sylla, a professor of business history at NYU's Stern School of Business suggested that lobbying for tax breaks in times of crisis was a fairly recent development. 'Taxes went up in World War II and nobody seemed to object,' he observed. 'There was more of a spirit of co-operation. It was more "What's in the national interest?" than "Can you do something for us?"'

The country's banking sector has also come under fire for its attempts to extract the teeth from the new anti-money laundering legislation which became law in late October. Although publicly supportive of government efforts, lobbyists objected fiercely to proposals for additional due diligence, and measures to stop banks from doing business with 'shell' organisations in other countries. As a result, both sections of the bill were substantially watered-down before it became law.

Although the US is still licking its wounds, a growing sense of dissatisfaction with the behaviour of corporates can be seen both in the media and on the streets. Writing in the New York Times at the weekend, Gretchen Morgenson was saddened by attempts to piggyback corporate tax cuts of benefit to very few on genuine and much-needed aid and regulatory proposals.

'Perhaps self-interested corporate machinations are de rigeur now, war or peace. Maybe putting profits before patriotism is the way the world works today,' she observed. 'If so, I want to get off.'

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