It’s not just cable news network that manipulate the media to make a point. Corporate America, in the form of associations, PACs, and “action tanks” is now using the media to put forth their views, packaged in a manner that would make a political consultant proud. I’ve come across several well-done, seemingly objective commercials about tax reform that were so slick, they took my breath away. Here’s one in particular that caught my attention:

Business Roundtable Tax Reform Commerical
The logic flow of this spot goes like this:

  • The Slowest Economic Recover Since World War II
  • Millions Drop Out of the Workforce
  • Take Home Pay Flat
  • America’s Outdated Tax System Has Produced Slow Economic Growth
  • We Have One of the Highest Tax Rates in the World
  • America’s Company’s are Disappearing, along with Good Paying Jobs
  • We Need a Plan to Make America Competitive Again
    • Lower Taxes
    • Increase Wages
    • Millions of New Jobs
  • It’s Time to Give American Workers the Tax Reform They Deserve

In a nutshell, the core message is that there is direct cause-and-effect relationship between America’s high tax rates and jobs/compensation. A new-and-improved tax plan will spur employment expansion and better pay. This ad campaign was put forth by the “Business Roundtable.”

A key assumption is that Tax Reform, some of which would take the form of lower tax rates (since ours are supposedly the highest in the world) will create jobs for the American worker.

Simple as it may sound, my question is, “How?”

First of all, our effective tax rates — as opposed to the nominal tax rates, which are often used to slant discussions towards lower corporate taxes — are indeed high, but are NOT the highest in the industrialized world, as demonstrated by the following chart, derived from Congressional Budget Office data:

tax rates1
It’s interesting to note that the U.S. effective tax rate is only roughly 5% greater than India’s, and about 8% higher than China’s. Still, if we lowered our corporate tax rate by 10%, would that produce more jobs to the American worker? Perhaps some, but much of that money will go to already cash-rich companies who are capable of investing to create jobs already. Alternately, a tax cut windfall may go to shareholders who, as a group, are more likely to save money instead of spending it, thereby inhibiting the process that leads to job creation.

So, who is this “Business Roundtable,” whose members,” … generate more than $400 billion in revenues for small and medium-sized businesses” (according to their own web site)? It turns out that their Board of Directors consists of C-level executives from some of the largest corporations in America, who are also extremely well-compensated, as demonstrated below:

Biz Roundtable

So this ad for tax reform has been put forth by a group consisting of some of the wealthiest corporate executives in America, marketed as a deceptively casual-and-folksy “Business Roundtable.” And if the tax reform inspired by this group takes the form of lower corporate taxes, which seems like a perfectly logical assumption, who is the real beneficiary?

Color me cynical, but I think the “American Workers”  championed in this ad can be represented by a pretty short list.

And it looks a lot like the one above.