Oct 11, 2017, 1:19 PM ET

Starbucks' Howard Schultz: Cutting the corporate tax rate would be 'a mistake' without complete reform

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Starbucks' executive chairman, Howard Schultz, said lowering the U.S. corporate tax rate from 35 percent to 20 percent would “a mistake” without overhauling the entire tax system.

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“You can’t have a corporate tax cut without having a transformation in complete tax reform. And if there’s going to be a corporate tax cut that is going to add to the national debt ... then I think it’s a mistake,” he told ABC News' Rebecca Jarvis.

Starbucks paid an effective tax rate of 34.3 percent in the company's fiscal third quarter.

In addition to cutting corporate tax rates, President Trump's proposed tax plan would reduce the number of personal income tax brackets from seven to three and nearly double the standard deduction for individuals and married couples. In an effort to promote his tax overhaul, Trump will give a speech today in Pennsylvania to an audience consisting mostly of truckers, whom the president said the proposed changes would benefit.

If the proposed corporate tax cuts take effect, Schultz said, employees should be the ones to benefit.

“I would hope that [businesses] would use it in ways that would advance their employees, to work what we need to do at our communities and building a better society,” he noted.

He said this is what Starbucks would do.

He also argued that corporate profits as a result of tax cuts will not “advance the economic issues of inequality in America” and cautioned that “the current level of enthusiasm and optimism that exists in the stock market today, in my view, is not a proxy for the U.S. economy.”

Schultz, who was the first in his family to graduate college, stepped down as Starbucks' CEO earlier this year, with many speculating that he would pursue a career in politics.

“I think about politics, but I have no intention of running for public office. I think about politics because I’m concerned about the need that we have for true, authentic leadership in the country,” Schultz told Jarvis.

He continued, “I feel like I’m in the best possible position right now to do the things I’m doing.”

Right now he's focused on content. His latest project is “Upstanders,” a Starbucks original series that features “ordinary people doing extraordinary things,” he explained. Schultz produced and wrote the series with Rajiv Chandrasekaran, a senior vice president of Starbucks and a former Washington Post senior editor.

Season 2 features 11 stories of people displaying acts of “courage and humanity.” Schultz believes viewers are drawn to the compassion and authenticity of the people featured in the series.

“There’s no Starbucks advertising. There’s no Starbucks placement. It’s not about marketing. It’s not about selling more coffee. It's really about just telling the American story,” Schultz said.

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  • ghendric

    HEY CONGRESS!! CUT USELESS SPENDING YOU MORONS!!!!!!!!!!!!!!!!!!!!!!!!!!

  • birdriver

    Trump's tax plan is horrific. Corporations and wealthy individuals have an unprecedented amount of money. They do not need tax cuts to jump start the economy. The best jump start to the economy is Medicare For All and the sale of War Bonds and/or Infrastructure Bonds. Republicans only care about the debt when they are not in power.

  • Propilotone

    there's nothing that prevents them from paying more to the IRS if they feel they aren't paying enough

  • PINKFLOYD1

    I want to congratulate ABC on finding the one silly CEO who thinks tax cuts are a bad idea, then spreading the story as gospel.

  • Lifeishortgetaladder.

    and that my dear is an opinion...
    everybody has one.. even the ex CEO of Starbucks. See..
    Open mouth and talk... its easy.
    Well I'd make some reform on tax system if you're gonna cut the CT to 20% see..
    No kidding Einstein.. Lets Just cut the sucker and see what the H happens Or?

  • Daddio

    My idea is that corporations who sell into the US would pay a tax on ALL their international profits, proportional to their sales. So if they have a profit of $10 billion and half the sales are in the US, then they pay US taxes on $5 billion, no matter how many accountants they hired to push all the expenses into the US and income outside the US.

  • ROBOTIX JONES

    Corporations have been making record profits for years, why do they need more breaks? Worker paychecks on average have barely budged in the last 30 years.

  • Betty Bloop

    it sounds like he 'gets it' -- especially the part about the successful stock market not being a 'proxy for the economy'

  • mark donnelly

    Trump? A mistake? You mean like every time he opens his mouth?

  • C. Gray

    If a corporation (or country, like Ireland) is low on capital, then lowering corporate rates can stimulate the economy. Since borrowing costs are at almost zero, and corporations are sitting on record amounts of cash, lowering their taxes will not spur the economy.
    It's not lack of cash that's slowing business, it's lack of demand. Nobody is going to build widget factories and hire widget-makers if nobody is buying widgets.

  • boyscout

    Everything about trump is a serious mistake. And yet somehow beyond comprehension he and his administration of liars and crooks are allowed to still be in office and make serious decisions at the highest level of our country, That is insanity manifested. Ever here of a bull in a china shop? Everything gets destroyed.

  • Educated

    .....See the difference now voters? The antiquated Electoral College needs to be abolished, ASAP. The majority of voters didn't vote for this.

  • thinkmore

    If the corp orate tax rate is cut, I'd be very surprised to see a benefit to workers. --Why would corporations do that?

  • Your Worst Nightmare

    Trumpers crowed how they were voting for a successful businessman and that is what we needed. Too bad a picked a moral degenerate like Trump instead of someone like Schultz who without a doubt is far more ethical and knowledgeable in business than Trump. But of course even Bernie Madoff has more ethics than Trump.

  • ralphpetrillo

    Let me teach Howard a quick lesson in finance and taxes, and politics. If you are getting bored with your current Starbucks position, which anyone after so many yeas would be, when you have a critique make some positive suggestions. Here are a few.

    1- Many corporations hardly pay any taxes, and when they borrow funds to build new retail operations, they deduct them from their Gross Revenue, and in effect they are paying less taxes when expanding.
    A very simple way for the federal government to increase its tax revenue and to simplify the tax system is to place a 5% tax on Gross Revenue, not net income. So a company like GE which has hardly paid any taxes over the last ten years would of paid about $ 100 billion. Many corporations have huge losses and hardly pay any taxes, so a simple 5% tax on Gross Revenue would be the suggestion . Look at Exxon Mobil , and see if you multiply their gross revenue over the last twenty years they would of paid more just by having a 5% tax on Gross revenue.

    2- Billionaires like Donald and Howard should pay much higher taxes then those who are making 99% less. Lets face it, Billionaires have so many suggestions and they hardly pay any taxes. We have not seen Donald's taxes, and or Howard's Both of you should be taxed at least 15% higher rates without any deductions.

    3- For Howard to get popular he has to have a cohesive strategy of how the country can handle the coming elimination of jobs with respect to technology. People want more then criticism, they want a real plan. Otherwise Howard is still cute with Starbucks. by the way who put the money up for Starbucks from the start. Was it Bill Gates dad, or some poker friends? Buying an apartment for thousands of dollar a square foot is not leadership we need right now. get a plan, and get one quick.

  • linmarco

    Lots of experts posting here. That's good.