For decades, billionaire Carl Icahn has shaken up corporations across America by buying their stock and forcing them to change. Now at 79, Icahn is targeting Washington by committing $150 million of his own money to launch a Super PAC that will push for tax reform.
“For the past 40 years I have worked diligently to see that errant CEOs and boards were held accountable,” Icahn wrote in a public letter he sent yesterday to Washington lawmakers, including the majority and minority leaders of the Senate and House of Representatives. “I believe the time has come to also hold Senators and Congressmen accountable for the current gridlock in Congress that prevents important legislation from being passed.”
Icahn’s move may be the latest effort by billionaires to impact the political process, but it is one of the biggest such individual efforts launched from Wall Street, where the fortunes of hedge fund and private equity titans have grown substantially in recent years. Forbes estimates that Icahn has a net worth of $21.6 billion, a fortune that has increased in recent years thanks to winning bets on companies like
In Washington, Icahn wants to focus on issues like corporate tax inversions that have seen U.S. companies move their tax addresses overseas through merger activity. Icahn blames Congress for not stopping the inversion wave. “In the last few years, over 50 companies have left the country through “inversions,” representing over half a trillion dollars in market value, hundreds of millions in tax dollars, and tens of thousands of jobs,” Icahn wrote in his letter on Wednesday. “If this exodus is allowed to accelerate, there will be disastrous consequences for our already fragile economy, as well as meaningful and unnecessary job losses. Foundational American companies, such as Pfizer, Walgreens, Monsanto, Omnicom, etc., have been reported publicly to be considering corporate “inversions.”
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Icahn is calling for the passing of tax reform legislation, like the kind outlined by senators Charles Schumer and Robert Portman, and supported by Paul Ryan to fund the Highway Bill. Icahn claims that U.S. corporations that have $2.2 trillion sitting outside the U.S. must be enticed to bring those funds back this year before they choose to invest the money abroad or seek an inversion deal. Icahn has previously said that U.S. companies would be willing to bring the money back and pay taxes on the funds if a compromised tax rate can be negotiated.
“The inability of Congress to enact desperately needed legislation because of certain members not willing to compromise is reprehensible, and the members responsible must and will be held accountable,” Icahn said in his letter. “Intransigence and the unwillingness to compromise is a form of corruption that has ruined many businesses, as well as countries, and is now afflicting our great democracy. If it is not stopped now, I fear we will soon suffer the dire consequences.”
In the past, Icahn has not been an overtly political force in America. But he has inserted himself into the nation’s political affairs more than usual this year, ever since Republican presidential candidate Donald Trump suggested Icahn should be his Treasury Secretary. Icahn released a video last months warning that political dysfunction in Washington could help spark a market crash.
“I see real tremendous problems ahead and I don’t think we are handling it right and nobody really wants to talk out,” Icahn said in an interview with Forbes last month. “We are headed toward a strong correction and possibly a complete meltdown but not systemic like 2008. It won’t threaten the system, it’s just going to threaten your livelihood and net worth.”
