Icahn ’57 threatens Congress with super PAC

Carl Icahn ’57 threatenedCongress on Oct. 21 that he would form a super PAC worth $150 million should the legislature not pass legislation slashing corporate tax rates.

Icahn did not respond to a request for comment.

Icahn, founder and majority shareholder of Icahn Enterprises, explained in the letter that he hopes that this threat will push Congressmen to highly consider passing the Portman-Schumer framework which would lower taxes on overseas funds recovered into the United States economy. The taxes collected on these funds would then be contributed toward the building of new highways, according to the letter.

Nick Nyhart, president and CEO of the Every Voice Center, a civil rights non-profit organization that focuses on campaign finance reform, explained that super PACs are political organizations and structures that can spend unlimited amounts of money as long as they, in theory, do not coordinate with a campaign. He added that people can give unlimited amounts of money through a super PAC.

Nyhart also noted that while highly unusual, Icahn’s move is not unprecedented.

“It’s unusual, but it has happened," he said. "You could start with the Koch Brothers, who have announced that they and their network are going to put close to $900 million into politics this year. I don’t know if anyone has ever put that much money into one policy — $150 million is up there.”

When asked about the feasibility of the threat, Nyhart noted it should not be taken lightly.

“I think the threat of that kind of money will impact people who are on the fence about this issue, particularly if Icahn can put some money into the races this year. They may think twice before prosecuting,” Nyhart said.

Richard Phillips, an analystat Citizens for Tax Justice, explained that the framework Ichan supports came up from democratic Sen. Charles Schumer, and republican Senator Robert Portman.

Both Schumer and Portman did not respond to requests for comment.

The idea was to come up with different ways to discuss different aspects of the tax code, Phillips explained. One of the provisions, he noted, is to move the tax system to a territorial tax system, which would exempt most active earnings brought back from foreign subsidiaries from being taxed twice. Instead, a country would pay only the difference between the United States’s tax rate and the tax rate of wherever it is repatriating profit from.

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“The other key part of it is that it would create a minimum tax, so, although all the income ashore or made abroad doesn’t actually get taxed, you would owe some minimum tax,” Phillips said."The idea behind the minimum tax is to go after these companies like Apple who are actually holding large sums of money in tax havens rather than having them be in places where they actually do business."

Both Nyhart and Phillips noted that Icahn’s action is an illustration of how big money speaks in politics. Phillips said that in policy in general and tax policy specifically big companies can reap huge benefits by investing a certain amount of lobbying.

“If you want to protect people from this kind of attack, you’ll have to find money on your own and give in the amounts, not of tens of millions but hundreds. And most people can’t afford that, so it seeks the removal of politics and democracy from the lives of everyday people," added Nyhart. "It says, you don’t really count when it comes to elections, and that’s a terrible message to send, it’s a terrible reality in a democracy.”