Even more recently, corporate leaders were reminded of how fraught engagement can be. Disney, for example, faced internal backlash when its leadership declined to take a strong stance against Florida’s Parental Rights in Education act, which critics often refer to as the “Don’t Say Gay” law. But when the chief executive did take a public stance, the company was crucified on social media, and the state revoked its special tax benefits.
From Opinion: A Challenge to Roe v. Wade
Commentary by Times Opinion writers and columnists on the Supreme Court’s upcoming decision in Dobbs v. Jackson Women’s Health Organization.
Now, with the expected demise of the country’s landmark abortion law, corporate leaders are confronting the hottest of hot-button issues. In a Pew Research poll in 2021, 59 percent of Americans said they believed that abortion should be legal in all or most cases, while 39 percent said it should be illegal in all or most cases. People on all sides of the issue feel strongly about it, with nearly a quarter of Americans saying they will vote only for candidates who share their views on abortion, according to Gallup.
That all adds up to many reasons a company would want to avoid making any statement on abortion — and all the more reason that customers and workers could come to see it as necessary. A company’s position on the end of Roe could have repercussions for how it hires in an increasingly competitive labor market, and how customers view its brand.
“Abortion is a health care issue, health care is an employer issue, so abortion is an issue for employers,” said Carolyn Witte, chief executive of Tia, a women’s health care company. On Tuesday, Tia announced that it would provide medication abortions through its telemedicine platform in states where it operated and where doing so was legal.
For some major companies that have been known to weigh in on political and social issues, this week has been unusually quiet. Walmart, Disney, Meta, PwC, Salesforce, JPMorgan Chase, ThirdLove, Patagonia, Kroger and Business Roundtable were among the companies and organizations that declined to comment or take a position, or did not respond to requests for comment about whether they plan to make public statements about their stance on abortion. Hobby Lobby, which in 2014 brought a suit to the Supreme Court challenging whether employer-provided health care had to include contraception, made no public statement and did not respond to a request for comment.
Other companies did wade in. United Talent Agency said it would reimburse travel expenses for employees affected by abortion bans. Airbnb said it would ensure its employees “have the resources they need to make choices about their reproductive rights.” Levi Strauss & Company, which has said its benefits plan will reimburse employees who have to travel out of state for health care services such as abortions, said abortion was a business issue.
A self-made multimillionaire who married into a revered European banking dynasty, Lynn Forester de Rothschild now spends her time calling for higher taxes on the wealthy, stricter regulation of big business and a wholesale reordering of the capitalist system that has delivered her such privilege.
It is an unlikely reformation for a woman who came from modest origins, made a fortune in the 1980s and could have spent her later years enjoying a sumptuous life of aristocracy.
Born to a middle-class family in the New Jersey suburbs, Ms. Rothschild began her career at the white shoe law firm Simpson, Thacher and Bartlett, then started working with John Kluge, a telecommunications mogul, in the 1980s. Ms. Rothschild eventually struck out on her own, working for, running and founding a series of successful media companies.
In 2000, she married Sir Evelyn de Rothschild, a British financier. (Henry Kissinger introduced them at the Bilderberg conference; the Clintons invited them to honeymoon at the White House.)
Despite her pedigree, Ms. Rothschild has in recent years come to understand that while she and her associates have enjoyed the fruits of capitalism, not all have fared so well. Many workers are struggling to get by. The environment is in serious trouble. Government often cleans up the private sector’s messes.
Sociable and well-connected, Ms. Rothschild has tapped her expansive network to launch a multipronged assault on the status quo. In 2014, she founded the Coalition for Inclusive Capitalism, an effort to get business leaders more engaged in environmental and social issues. And she has parlayed that into a related group, the Council for Inclusive Capitalism, that is working with Pope Francis, and a new fund focused on socially responsible investing she founded with Jeff Ubben, a successful hedge fund manager.
This interview was condensed and edited for clarity.
Back when you were starting out in your career, were you concerned about some of the negative impacts of capitalism in the same way you are today?
It was really different. I don’t think we realized how bad it was. Graduating from law school in 1980, I believed I was living the American dream. I was a skinny girl from nowhere who knew no one, who had aspirations for an interesting life that would make a difference. And I believed that was available to me if I worked hard and played by the rules. The mantra at that time, that was not said disparagingly, was “Greed is good.” There was an Ayn Rand view that if you pursue your interests, all of society is lifted. So I really did believe that all I needed to do was to pursue my career in a legal, ethical, exciting way, and I didn’t have to worry about society.
When did it click for you that something wasn’t working?
We didn’t anticipate the kind of disparity that developed over those 20 years when we started in 1980. And I don’t think people practicing shareholder primacy were evil. There was just too much greed. But by 2008 it was impossible to ignore. The concentration of wealth in America at that time already was back to levels we had during the Gilded Age. In the 1960s the ratio of C.E.O. pay to average worker pay was 25 to one. Today it is 320 to one.
That has very conveniently created enormous personal wealth, which became the objective, as opposed to: What wealth have you left behind in society? How have you made the world better for your children, for your community? “Greed is good” was never a concept for Adam Smith.
What do you see as the most problematic symptoms of our economic system today?
Inequality of opportunity. We have to be honest that in each of our two recent crises — the great financial crisis and the Covid crisis — the government came to the aid of the wealthiest. Some have called it “socialism for the rich and capitalism for everyone else.” There’s something to that.
The elites turn to government when the financial system is blown up or we have a health crisis. Government got us out of both of those problems, and it got us out with too much of the benefit going to the richest. So how do we equalize that?
I personally am fine with higher taxes, if higher taxes lead to better distribution of opportunity, particularly for people of color and people in the lower part of the socioeconomic environment. I also believe that it is time that we listen more to our employees. It’s time that we create a more level playing field with respect to worker voice and worker involvement. This is hard stuff, because it can impact profit.
A year ago you said Covid was going to change capitalism forever. In what way did you think it was going to change capitalism, and how do you think that all has actually played out?
I’m probably always guilty of being overly optimistic. I believed that our moral compass would tell us that we need to take better care of the people who take care of us. But we saw starkly how we treated the people we called essential, how we were exposing them to this deadly disease. I personally find it difficult to understand why that is so hard for us as a society, and that’s why I founded the Council for Inclusive Capitalism.
I had the disease. I was really sick. I thought I was going to die. I had a really bad case and I’m scared to death of it.
What were the origins of the Council for Inclusive Capitalism?
In June of 2015, Laudato Si was written by Pope Francis. By September, the Sustainable Development Goals were agreed to by the United Nations. By December, the Paris climate accord had been signed. You had every reason to believe that there was a sense of the common good.
And if you go back and read Laudato Si, Pope Francis writes: “The lessons of the global financial crisis have not been assimilated, and we are learning all too slowly the lessons of environmental deterioration.” He goes on to say that “by itself the market cannot guarantee integral human development and social inclusion.”
What are some of the reforms you’d like to see? The Business Roundtable can put out as many press releases as it wants about stakeholder capitalism, but we still have companies losing billions of dollars, laying off tens of thousands of workers and still rewarding their C.E.O.s with tens of millions of dollars.
Something is really broken. I do believe that C.E.O.s and boards are willing to share the wealth and do more. But the Chamber of Commerce and the Business Roundtable are going to go for tax policy and trade policy as their primary objective.
I remember a person who was very senior in a previous administration told me that in his four years in office, only one C.E.O. asked to go and see him about an issue of the common good. Everyone was coming in to push what they needed for their own book. We need to profitably solve the problems of people and planet. That’s why business exists.
Who’s to say that there shouldn’t be a government policy that prices the negative externalities that companies cost the taxpayer when full-time workers have to be on public assistance to lead a decent life? Why can’t there be a tax and a penalty on that? Why is Jeff Bezos the richest man in the world? He’s a nice guy, and at the same time he has tens of thousands of employees on public assistance. Why is that OK? Why do we have a government that lets that happen?
Which do you think is more broken, American politics or capitalism?
I think their problems feed upon each other. They’re creating a death spiral together and it’s got to be stopped. Politics and capitalism needs to return to a basic sense of decency.
And that is actually why I reached out to the Holy Father, because I think that a lot of what it will take to change behavior is a moral and ethical reawakening. It’s not just one policy, it’s not just taxes, it’s not just reforming labor laws — all of which are important, and we need competent ethical people to do it. But at the core of it, it has to come from common decency.
God did not invent the corporation. Society allows a corporation to exist, gives shareholders limited liability, and expects something in return. But we don’t just expect cheap widgets.
How do you reconcile your critique of shareholder capitalism with the fact that you’re now working with a hedge fund manager?
If there is going to be a system change, the capital markets need to reward shareholders. That is only going to happen if there are really talented investors who find the new levers of value creation, and are engaging actively with companies that are transforming at scale to become cleaner and more inclusive, and those companies become the ones that are the most valuable. Then we’ve created a race to the top.
That’s why I’m in partnership with Jeff, who’s such a legend in shareholder value creation and transforming companies. I have 1,000 percent confidence in the integrity of Jeff, even though he’s been on the opposite side for many years. I trust many billionaires.
On Tuesday, a spokesman for the bank said, “We publicly made our own strong statement last month about the critical importance of every citizen being able to exercise their fundament right to vote.”
That statement for release on Wednesday came together over the past week and a half, after the Black executives who spoke out received an outpouring of support.
About 10 days ago, Mr. Chenault and Mr. Frazier conferred with three other Black executives — William M. Lewis Jr., the chairman of investment banking at Lazard; Clarence Otis Jr., a former chief executive of Darden Restaurants; and Charles Phillips, a former chief executive of Infor — about what next steps they could take. Within days, they had a draft of the statement and were sharing it with other executives.
Last Wednesday, Mr. Frazier and Mr. Chenault spoke with members of the Business Roundtable, an influential lobbying group that includes the chief executives of many of the company’s biggest companies. Sherrilyn A. Ifill, president and director-counsel of the NAACP Legal Defense and Educational Fund Inc., also spoke to the group.
Then on Thursday, someone from Mr. McConnell’s staff, at the group’s invitation, briefed its members on the details of the Georgia law, several people familiar with the situation said.
The next day, members of the Business Roundtable had a regularly scheduled meeting at which the executives discussed the voting issue. On that call, Dan Schulman, the chief executive of PayPal, encouraged other executives to sign the statement.
And on Saturday, Mr. Chenault and Mr. Frazier spoke on a Zoom meeting with more than 100 executives that was organized by Jeffrey Sonnenfeld, a Yale professor who regularly gathers business leaders to discuss politics. At that meeting, Mr. Chenault read the statement and invited executives on the call to add their names to the list of signatories.
WASHINGTON — Large companies like Apple and Bristol Myers Squibb have long employed complicated maneuvers to reduce or eliminate their tax bills by shifting income on paper between countries. The strategy has enriched accountants and shareholders, while driving down corporate tax receipts for the federal government.
President Biden sees ending that practice as central to his $2 trillion infrastructure package, pushing changes to the tax code that his administration says will ensure American companies are contributing tax dollars to help invest in the country’s roads, bridges, water pipes and other parts of his economic agenda.
On Wednesday, the Treasury Department released the details of Mr. Biden’s tax plan, which aims to raise as much as $2.5 trillion over 15 years to help finance the infrastructure proposal. That includes bumping the corporate tax rate to 28 percent from 21 percent, imposing a strict new minimum tax on global profits and levying harsh penalties on companies that try to move profits offshore.
The plan also aims to stop big companies that are profitable but have no federal income tax liability from paying no taxes to the Treasury Department by imposing a 15 percent tax on the profits they report to investors. Such a change would affect about 45 corporations, according to the Biden administration’s estimates, because it would be limited to companies earning $2 billion or more per year.
President Donald J. Trump’s 2017 tax cuts. Biden administration officials say that law increased the incentives for companies to shift profits to lower-tax countries, while reducing corporate tax receipts in the United States to match their lowest levels as a share of the economy since World War II.
Treasury Secretary Janet L. Yellen, in rolling out the plan, said it would end a global “race to the bottom” of corporate taxation that has been destructive for the American economy and its workers.
“Our tax revenues are already at their lowest level in generations,” Ms. Yellen said. “If they continue to drop lower, we will have less money to invest in roads, bridges, broadband and R&D.”
The plan, while ambitious, will not be easy to enact.
Some of the proposals, like certain changes to how a global minimum tax is applied to corporate income, could possibly be put in place by the Treasury Department via regulation. But most will need the approval of Congress, including increasing the corporate tax rate. Given Democrats’ narrow majority in both the Senate and the House, that proposed rate could drop. Already, Senator Joe Manchin III of West Virginia, a crucial swing vote, has said he would prefer a 25 percent corporate rate.
search of the lowest possible tax bill.
Companies also shift jobs and investments between countries, but often for different reasons. In many cases, they are following lower labor costs or seeking customers in new markets to expand their businesses. The Biden plan would create new tax incentives for companies to invest in production and research in the United States.
weakened by subsequent regulations issued by Mr. Trump’s Treasury Department.
Conservative tax experts, including several involved in writing the 2017 law, say they have seen no evidence of the law enticing companies to move jobs overseas. Mr. Biden has assembled a team of tax officials who contend the provisions have given companies new incentives to move investment and profits offshore.
Mr. Biden’s plan would raise the rate of Mr. Trump’s minimum tax and apply it more broadly to income that American companies earn overseas. Those efforts would try to make it less appealing for companies to book profits in lower-tax companies.
The S.H.I.E.L.D. proposal is an attempt to discourage American companies from moving their headquarters abroad for tax purposes, particularly through the practice known as “inversions,” where companies from different countries merge, creating a new foreign-located firm.
Under current law, companies with headquarters in Ireland can “strip” some of their profits earned by subsidiaries in the United States and send them back to the Ireland company as payments for things like the use of intellectual property, then deduct those payments from their American income taxes. The S.H.I.E.L.D. plan would disallow those deductions for companies based in low-tax countries.
Tax professionals say Mr. Biden’s proposed changes to that law could be difficult to administer. Business groups say they could hamper American companies as they compete on a global scale.
Republicans denounced the plan as bad for the United States economy, with lawmakers on the House Ways and Means Committee saying that “their massive tax hikes will be shouldered by American workers and small businesses.”
coupled with an effort through the Organization for Economic Cooperation and Development to broker a global agreement on minimum corporate taxation, will start a worldwide revolution in how and where companies are taxed. That is in part because the Biden plans include measures meant to force other countries to go along with a new global minimum tax that Ms. Yellen announced support for on Monday.
Treasury Department officials estimate in their report that the proposed changes to the minimum tax, and the implementation of the S.H.I.E.L.D. plan, would raise an estimated $700 billion over 10 years on their own.
Business groups warn the administration’s efforts will hamstring American companies, and they have urged Mr. Biden to wait for the international negotiations to play out before following through with any changes.
Members of the Business Roundtable, which represents corporate chief executives in Washington, said this week that Mr. Biden’s minimum tax “threatens to subject the U.S. to a major competitive disadvantage.” They urged the administration to first secure a global agreement, adding that “any U.S. minimum tax should be aligned with that agreed upon global level.”
However, some companies expressed an openness on Wednesday to some of the changes.
John Zimmer, the president and a founder of Lyft, told CNN that he supported Mr. Biden’s proposed 28 percent corporate tax rate.
“I think it’s important to make investments again in the country and the economy,” Mr. Zimmer said. “And as the economy grows, so too does jobs and so too does people’s needs to get around.”
The Biden administration unveiled its plan to overhaul the corporate tax code on Wednesday, offering an array of proposals that would require large companies to pay higher taxes to help fund the White House’s economic agenda.
The plan, if enacted, would raise $2.5 trillion in revenue over 15 years. It would do so by ushering in major changes for American companies, which have long embraced quirks in the tax code that allowed them to lower or eliminate their tax liability, often by shifting profits overseas. The plan also includes efforts to help combat climate change, proposing to replace fossil fuel subsidies with tax incentives that promote clean energy production.
Some corporations have expressed a willingness to pay more in taxes, but the overall scope of the proposal is likely to draw backlash from the business community, which has benefited for years from loopholes in the tax code and a relaxed approach to enforcement.
Treasury Secretary Janet L. Yellen said during a briefing with reporters on Wednesday that the plan would end a global “race to the bottom” of corporate taxation that she said has been destructive for the American economy and its workers.
global minimum tax to 21 percent and toughening it, to force companies to pay the tax on a wider span of income across countries.
That, in particular, has raised concerns in the business community, with Joshua Bolten, chief executive of the Business Roundtable, saying in a statement this week that it “threatens to subject the U.S. to a major competitive disadvantage.”
The plan would also repeal provisions put in place during the Trump administration that the Biden administration says have failed to curb profit shifting and corporate inversions, which involve an American company merging with a foreign firm and becoming its subsidiary, effectively moving its headquarters abroad for tax purposes. It would replace them with tougher anti-inversion rules and stronger penalties for so-called profit stripping.
The plan is not entirely focused on the international side of the corporate tax code. It tries to crack down on large, profitable companies that pay little or no income taxes yet signal large profits to companies with their “book value.” To cut down on that disparity, companies would have to pay a minimum tax of 15 percent on book income, which businesses report to investors and which are often used to judge shareholder and executive payouts.
One big beneficiary of the plan would be the Internal Revenue Service, which has seen its budget starved in recent years. The Biden administration’s proposal would beef up the tax collection agency’s budget so that it can step up enforcement and tax collection efforts.
Still, statements by companies about their social priorities deserve a healthy dose of skepticism.
Indeed, some of the same companies taking part in the stampede of statements critiquing voting laws, like Facebook, Google and AT&T, also recently donated money to the Republican State Leadership Committee, a group that supports many of the voting initiatives. Judd Legum, a journalist, pointed out this hypocrisy in his Popular Information newsletter, noting that Republicans have introduced bills to restrict voting in 47 states.
In the case of businesses like Coca-Cola and Delta, their more forceful, specific statements against the voting law in Georgia came only after the bill passed and 72 senior Black executives had spoken out, giving them cover.
And statements — even moving an All-Star Game — are not expensive. Senator Marco Rubio, Republican of Florida, made this point in a letter to M.L.B.’s commissioner, Rob Manfred, calling its move “an easy way to signal virtues without significant financial fallout.”
Mr. Rubio also told Mr. Manfred, “I am under no illusion you intend to resign as a member from Augusta National Golf Club,” which is in Georgia. “To do so would require a personal sacrifice, as opposed to the woke corporate virtue signaling of moving the All-Star Game from Atlanta.”
The decision to move the game will impact “countless small and minority-owned businesses in and around Atlanta,” Mr. Rubio wrote.
On that last point Mr. Rubio has an ally of sorts in Stacey Abrams, the Democratic organizer in Georgia, but not because they agree on the underlying issue. Ms. Abrams said: “I am disappointed that the M.L.B. is relocating the All-Star Game; however, I commend the players, owners and league commissioner for speaking out. I urge others in positions of leadership to do so as well.”
Still, statements by companies about their social priorities deserve a healthy dose of skepticism.
Indeed, some of the same companies taking part in the stampede of statements critiquing voting laws, like Facebook, Google, and AT&T, also recently donated money to the Republican State Leadership Committee, a group that supports many of the voting initiatives. Judd Legum, a journalist, pointed out this hypocrisy in his Popular Information newsletter, noting that Republican state lawmakers have introduced bills to restrict voting in 47 states.
In the case of businesses like Coca-Cola and Delta, their more forceful, specific statements against the voting law in Georgia came only after the bill passed and 72 senior Black executives had spoken out, giving them cover.
And statements — even moving an All-Star Game — are not expensive. Senator Marco Rubio, Republican of Florida, made this point in a letter to M.L.B.’s commissioner, Robert Manfred, calling its move “an easy way to signal virtues without significant financial fallout.”
Mr. Rubio also told Mr. Manfred, “I am under no illusion you intend to resign as a member from Augusta National Golf Club,” which is based in Georgia. “To do so would require a personal sacrifice, as opposed to the woke corporate virtue signaling of moving the All-Star Game from Atlanta.”
The decision to move the game will impact “countless small and minority owned businesses in and around Atlanta,” Mr. Rubio wrote.
On that last point Mr. Rubio has an ally of sorts in Stacey Abrams, the Democratic organizer in Georgia, but not because they agree on the underlying issue. Ms. Abrams said, “I am disappointed that the M.L.B. is relocating the All-Star game; however I commend the players, owners and League commissioner for speaking out. I urge others in positions of leadership to do so as well.”
On March 11, Delta Air Lines dedicated a building at its Atlanta headquarters to Andrew Young, the civil rights leader and former mayor. At the ceremony, Mr. Young spoke of the restrictive voting rights bill that Republicans were rushing through the Georgia state legislature. Then, after the speeches, Mr. Young’s daughter, Andrea, a prominent activist herself, cornered Delta’s chief executive, Ed Bastian.
“I told him how important it was to oppose this law,” she said.
For Mr. Bastian, it was an early warning that the issue of voting rights might soon ensnare Delta in another national dispute. Over the past five years, corporations have taken political stands like never before, often in response to the extreme policies of former President Donald J. Trump.
After Mr. Trump’s equivocating response to the white nationalist violence in Charlottesville, Va., in 2017, Ken Frazier, the Black chief executive of Merck, resigned from a presidential advisory group, prompting dozens of other top executives to distance themselves from the president. Last year, after the killing of George Floyd, hundreds of companies expressed solidarity with the Black Lives Matter movement.
But for corporations, the dispute over voting rights is different. An issue that both political parties see as a priority is not easily addressed with statements of solidarity and donations. Taking a stand on voting rights legislation thrusts companies into partisan politics and pits them against Republicans who have proven willing to raise taxes and enact onerous regulations on companies that cross them politically.
Major League Baseball pulled the All-Star game from Atlanta in protest, and more than 100 other companies spoke out in defense of voting rights.
The groundswell of support suggests that the Black executives’ clarion call will have an impact in the months ahead, as Republican lawmakers in more than 40 states advance restrictive voting laws. But already, the backlash has been swift, with Mr. Trump calling for boycotts of companies opposing such laws, and Georgia lawmakers voting for new taxes on Delta.
eliminate a tax break for Delta, costing the company $50 million.
Yet as 2021 began and Mr. Bastian focused on his company’s recovery from the pandemic, an even more partisan issue loomed.
In February, civil rights activists began reaching out to Delta, flagging what they saw as problematic provisions in early drafts of the bill, including a ban on Sunday voting, and asking the company to use its clout and lobbying muscle to sway the debate.
Delta’s government affairs team shared some of those concerns, but decided to work behind the scenes, rather than go public. It was a calculated choice intended to avoid upsetting Republican lawmakers.
In early March, Delta lobbyists pushed David Ralston, the Republican head of the Georgia house, and aides to Gov. Brian Kemp to remove some far-reaching provisions in the bill.
followed the same script, refraining from criticizing the bill.
That passive approach infuriated activists. In mid-March, protesters staged a “die in” at Coca-Cola’s museum. Bishop Reginald Jackson, an influential Atlanta pastor, took to the streets with a bullhorn and called for a boycott of Coca-Cola. Days later, activists massed at the Delta terminal at the Atlanta airport and called on Mr. Bastian to use his clout to “kill the bill.” Still, Mr. Bastian declined to say anything publicly.
Two weeks to the day after Delta dedicated its building to Mr. Young, the law was passed. Some of the most restrictive provisions had been removed, but the law limits ballot access and makes it a crime to give water to people waiting in line to vote.
The fight in Georgia appeared to be over. Days after the law was passed though, a group of powerful Black executives frustrated by the results sprang into action. Soon, Atlanta companies were drawn back into the fight, and the controversy had spread to other corporations around the country.
spoke with the media. “There is no middle ground here,” Mr. Chenault told The Times. “You either are for more people voting, or you want to suppress the vote.”
“This was unprecedented,” Mr. Lewis said. “The African-American business community has never coalesced around a nonbusiness issue and issued a call to action to the broader corporate community.”
Mr. Bastian had been unable to sleep on Tuesday night after his call with Mr. Chenault, according to two people familiar with the matter. He had also been receiving a stream of emails about the law from Black Delta employees, who make up 21 percent of the company’s work force. Eventually, Mr. Bastian came to the conclusion that it was deeply problematic, the two people said.
accused Mr. Bastian of spreading “the same false attacks being repeated by partisan activists.” And Republicans in the Georgia house voted to strip Delta of a tax break, just as they did three years ago. “You don’t feed a dog that bites your hand,” said Mr. Ralston, the house speaker.
Senator Marco Rubio of Florida posted a video in which he called Delta and Coca-Cola “woke corporate hypocrites” and Mr. Trump joined the calls for a boycott of companies speaking out against the voting laws.
Companies that had taken a more cautious approach weren’t targeted the same way. UPS and Home Depot, big Atlanta employers, also faced early calls to oppose the Georgia law, but instead made unspecific commitments to voting rights.
declared their opposition to proposed voting legislation in that state. And on Friday, more than 170 companies signed a statement calling on elected officials around the country to refrain from enacting legislation that makes it harder for people to vote.
It was messy, but to many activists, it was progress. “Companies don’t exist in a vacuum,” said Stacey Abrams, who has worked for years to get out the Black vote in Georgia. “It’s going to take a national response by corporations to stop what happened in Georgia from happening in other states.”
Announcing phony news on April Fools’ Day is one of corporate America’s favorite occasions for shameless publicity stunts. But when stonks, Dogecoin and $69 million JPG files are real things that warrant serious business coverage, the risk of jokes being taken seriously could hardly be higher. Some say that’s a good reason to skip them, not to mention the gravity that a pandemic has cast over things.
With that in mind, can you spot the prank among these recent announcements? (Scroll to the bottom for the answer.)
A: To celebrate National Burrito Day today, Chipotle is giving away $100,000 worth of Bitcoin.
B: Volkwagen’s U.S. operation is changing its name to “Voltswagen” to emphasize the company’s push into electric vehicles.
C: Robinhood is nixing a confetti animation when app users make a stock trade to reduce “distraction.”
complaints about burnout.
HERE’S WHAT’S HAPPENING
Business groups challenge President Biden’s proposed corporate tax increases. The Business Roundtable and U.S. Chamber of Commerce were among those that praised Mr. Biden’s plan to spend trillions on infrastructure. But they rejected his idea to pay for it by raising taxes, saying that doing so would endanger the economic recovery.
delay future shipments of its vaccine after a mix-up at a manufacturing plant. A top E.U. official said the bloc would allow “zero” shipments of AstraZeneca’s vaccine to Britain until the drugmaker fulfilled its commitments to Brussels. And France announced a third nationwide lockdown as its cases mount and inoculation efforts lag.
A tough day for initial public offerings. As Deliveroo had “the worst I.P.O. in London’s history,” other offerings also struggled. In the U.S., the SoftBank-backed real estate brokerage Compass priced at the bottom of a reduced range, while the low-cost airline Frontier sold at the low end of expectations. And in Canada, the space tech company MDA priced below its range.
Microsoft wins a huge contract to make augmented-reality headsets for the U.S. Army. The tech giant will receive up to $22 billion for equipping soldiers with sensors based on its HoloLens technology. It’s another big defense contract for Microsoft, which beat out Amazon to provide a $10 billion cloud computing system for the Pentagon.
Executives get a ‘sense of urgency’ in Georgia
A day after 72 Black executives signed a letter calling on companies to fight restrictive voting bills more forcefully, executives have begun speaking out more directly about laws that limit ballot access. But their statements came too late to affect a sweeping law passed last week in Georgia that added new requirements for absentee voting, limits on drop boxes and other restrictions that have an outsize impact on Black voters.
Today in Business
Delta and Coca-Cola reversed course. Ed Bastian, Delta’s C.E.O., told employees, “I need to make it crystal clear that the final bill is unacceptable and does not match Delta’s values.” James Quincey, Coca-Cola’s C.E.O., said he wanted to be “crystal clear” that “the Coca-Cola Company does not support this legislation, as it makes it harder for people to vote, not easier.”
The statements by the Atlanta-based companies angered local politicians, including Gov. Brian Kemp. In the past, corporate stands on controversial issues have led to political retribution: In 2018, Lt. Gov. Casey Cagle stripped a tax break proposal from a bill that would benefit Delta after the airline ended a promotional discount for N.R.A. members. The State House passed a similar measure yesterday, but the Senate didn’t take it up before the chambers adjourned for the year.
Retaliation also goes the other way: In an interview with ESPN, President Biden said he would “strongly support” moving Major League Baseball’s All-Star Game from Atlanta, scheduled for July.
“It is regrettable that the sense of urgency came after the legislation was passed and signed into law,” said Darren Walker, the Ford Foundation president, who is a board member at Pepsi, Ralph Lauren and Square.
said the company stood “ready to continue to help in ensuring every Georgia voter has the ability to vote.” A spokesperson for Home Depot reiterated the company’s stance that it believes “all elections should be accessible, fair and secure.” A spokesperson for Inspire Brands, the owner of Dunkin’ Donuts and Arby’s, said that it “values inclusivity” and believes that “every American should have equal access to their right to vote.”
“The argument is they are recruited, they’re used up and then they’re cast aside without even a college degree. So they say, how can this be defended in the name of amateurism?”
— Justice Samuel Alito, assessing the “stark picture” painted by college athletes in an antitrust case against the N.C.A.A. that the Supreme Court heard yesterday.
The Red Sox sold a stake to private equity. Now what?
RedBird Capital Partners confirmed its deal to buy a stake in Red Sox parent Fenway Sports Group, a transaction that values the company at $7.35 billion. DealBook spoke with RedBird’s founder, Gerry Cardinale, and Fenway’s chair, Tom Werner, about what happens next.
Buy and build. RedBird plans to acquire more teams: Mr. Cardinale noted that his company doesn’t own teams in the N.B.A., N.H.L. or M.L.S. For its part, Fenway plans to tap new opportunities in ticketing, sponsorship and media. (As part of the RedBird deal, the N.B.A. star LeBron James bought a stake in Fenway.) In media, Fenway controls NESN, and RedBird owns a stake in the YES network. “You should expect that we’re going to continue to look for ways to innovate in that area,” said Mr. Cardinale, who helped create the YES network.
Deepening ties with online gambling is also on the table. “We do have an excellent relationship with DraftKings,” Mr. Werner said, “and we’ve already had some conversations with them about partnerships.”
The deal was a better fit for the private market instead of a SPAC, the executives said, after talks to take Fenway public via a blank-check firm fell through. “In the middle of Covid, with the mandate to re-underwrite the next wave of growth for Fenway Sports Group, we probably would be better off doing that privately and then give ourselves the option down the road,” Mr. Cardinale said of going public. He also called the current SPAC market “very frothy.”
announced a deal last week to go public by merging with a blank-check firm that valued it at roughly $8 billion.) A new documentary, “WeWork: Or the Making and Breaking of a $47 Billion Unicorn,” tries to find lessons among the ups and downs. It streams on Hulu, starting tomorrow.
Jed Rothstein, the director, told DealBook that he believes what’s most compelling about WeWork isn’t what went wrong, but how it initially succeeded by turning strangers into a kind of tribe. “We still need that,” he said.
“The core idea of WeWork met a real need for community,” Mr. Rothstein said. “The voids people were trying to fill have only become more real.” After a year of social distancing, he likes the notion of curated communal spaces, which is what WeWork offered. Talking to early WeWorkers who bought the vision and later felt betrayed, he was surprised to find how much the company gave its devotees, notably a feeling that they were part of something bigger. That is worth acknowledging in a world where people will increasingly work remotely and for many different companies in their careers, Mr. Rothstein said.
WeWork’s co-founders, Adam Neumann and Miguel McKelvey, both had communal childhood experiences. Mr. Rothstein said he thought they sincerely wanted to replicate the good in group life and inspired people who hadn’t seen that before. But Mr. Neumann also focused on what he didn’t like — sharing equally — and emphasized an “eat what you kill” mentality. Ultimately, his hunger turned the community dream into a nightmare for many.
After the director talked to people who followed the initial vision, his perspective changed. “People in the film experienced real growth and fulfillment mixed with their anger,” he said. “I realized the story is much more nuanced.”
THE SPEED READ
Deals
The media conglomerate Endeavor filed to go public for a second time, while raising $1.8 billion to buy full control of the Ultimate Fighting Championship. It also added Elon Musk to its board. (WSJ, CNBC)
Vice Media is reportedly in talks to go public by merging with a SPAC. And the S.E.C. issued two notices for companies looking to go public via SPAC. (The Information, S.E.C.)
Junior bankers aren’t the only ones feeling burned out. Young lawyers are, too. (Business Insider)
Politics and policy
New York became the 15th state to legalize recreational marijuana. (NYT)
Efforts by aides to Gov. Andrew Cuomo to hide New York State’s Covid-19 death toll coincided with his efforts to win a multimillion-dollar book deal. (NYT)
An accidental disclosure by the I.R.S. revealed a $1 billion tax dispute with Bristol Myers Squibb. (NYT)
Tech
Best of the rest
The ad agency Deutsch is doubling referral bonuses for Black job candidates. (Insider)
Amazon wants its employees mostly back in its offices, while the Carlyle Group and IBM favor hybrid working models. (Insider, Bloomberg)
Paul Simon is the latest musician to sell his entire back catalog: Sony Music Publishing will buy the collection, including classics like “Bridge Over Troubled Water,” for an undisclosed amount. (NYT)
Feeling burned-out? As more workers consider a return to the office, our colleague Sarah Lyall is writing about late-pandemic anxiety and exhaustion. Tell her about how you’re coping.
April Fools’ Day quiz answer: B. If you were fooled by Volkswagen’s prank, you’re in good company. Volkswagen reportedly told journalists that a draft of the announcement was not a stunt. It later called the stunt just “a bit of fun.”
President Biden’s ambitious plan to increase corporate taxes does more than just reverse much of the overhaul pushed through by his predecessor. It also offers a profoundly different vision of how to make the United States more competitive and how to foot the bill.
When President Donald J. Trump and a Republican Congress rewrote the tax code in 2017, most of the benefits went to the wealthiest Americans, with lower rates on businesses and on profits from investments. The guiding principle, proponents argued, was that cutting taxes on corporations and investors would encourage businesses to expand, creating more jobs and generating more wealth for everyone.
By contrast, the animating idea behind the tax plan put forward by the Biden administration on Wednesday is that the best way to increase America’s competitiveness and foster economic growth is to raise corporate taxes to finance huge investments in transportation, broadband, utilities and more.
The Business Roundtable, the U.S. Chamber of Commerce and the National Association of Manufacturers all welcomed the idea of pumping money into repairing and building the nation’s infrastructure, but recoiled at raising corporate taxes to do so.
said in a statement.
The biggest and most eye-catching proposal is to trim the sizable reduction in the corporate tax rate enacted under Mr. Trump. In 2017, Republicans shrank the rate to 21 percent from 35 percent. Mr. Biden wants to nudge the rate part of the way back — to 28 percent.
The increase will “ensure that corporations pay their fair share of taxes,” and fund critical investments “to maintain the competitiveness of the United States and grow the economy,” the White House stated in outlining the plan.
The other provisions are primarily intended to ensure that multinational corporations cannot avoid taxes on profits generated overseas. The hope is that this will reduce the temptation to set up operations or offices in foreign tax havens.
Wall Street has been wary of possible tax increases since the presidential election and has hoped that gridlock in Washington would moderate Mr. Biden’s agenda. On Wednesday, a spokesman for JPMorgan Chase said the bank’s chief executive, Jamie Dimon, believed that “the corporate tax rate for companies in the U.S. has to be competitive globally, which it is now.”
Supporters countered that the changes would do much more to promote growth and go a long way in curbing excesses of the 2017 tax legislation. Democrats have argued that the low-tax approach has failed to deliver broad economic gains, with only those at the very top benefiting. Targeted government spending on workers, students and infrastructure, they argue, would offer much more bang for the buck. What’s more, businesses base their decisions on a range of factors besides tax rates.
Even economists favoring low rates on business acknowledge that the 2017 tax cuts did not produce much of an increase in investment. Gross domestic product grew at a rate of 2.4 percent in the two years leading up to the law and 2.4 percent in the two years after it passed.
“There’s essentially no evidence that the tax change boosted investment,” said William Gale, co-director of the Urban-Brookings Tax Policy Center. He argued that investment went up in 2018 only because oil prices rose. And while the tax law favored investments in equipment and structures, it turned out that the biggest investments were not in those areas but in intellectual capital.
11.3 percent on their 2018 income.
pass through income to their owners or shareholders. (They pay taxes at the ordinary rate on their individual returns.)
The Biden administration has indicated that tax increases for the wealthy will help fund the second phase of the infrastructure plan, which is expected to be announced next month and will focus on priorities like education, health care and paid leave.
Gillian Friedman and Lauren Hirsch contributed reporting.
