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Howard Schultz on GOP tax plan: 'This is fool's gold'

Starbucks Chairman and former CEO Howard Schultz
Jason Redmond | AFP | Getty Images
Starbucks Chairman and former CEO Howard Schultz

According to economic advisor Gary Cohn, when it comes to the GOP tax overhaul, "the most excited group out there are big CEOs."

"They all tell me how they excited they are to get a tax plan that makes the United States competitive, makes it so they can grow their business domestically, makes it so they can actually pay wages here," he says.

Howard Schultz, the former CEO of Starbucks and current executive chairman of the coffee giant, is skeptical.

"If you talk about tax reform, which is in the news every minute of every day, this is not tax reform," Schultz told Andrew Ross Sorkin at the New York Times DealBook conference. "This is a tax cut. This is fool's gold."

The tax plan, which House Republicans unveiled earlier this month, calls for slashing the corporate income tax rate from 35 to 20 percent. Republicans say that cutting the corporate tax rate will help workers by increasing jobs and raising salaries.

Schultz, a self-proclaimed "life-long Democrat," sees it differently.

"Is that profit going to go back to the people who need it the most?" Schultz asked. "Is that going to help small businesses? Is that going to help half the country that doesn't have $400 in their bank account for a crisis? No."

"Corporate America does not need a corporate tax cut from 35 to 20 percent," he continued.

Some other business leaders agree. Berkshire Hathaway chairman and CEO Warren Buffett and BlackRock Chief Executive Larry Fink have both said that the corporate rate may not have to be cut that deeply.

"We have a lot of businesses ... I don't think any of them are non-competitive in the world because of the corporate tax rate," Buffett told CNBC. Fink said that a corporate rate of 27 percent could suffice.

On the flip side, there are leaders like Jamie Dimon, the chairman and CEO of JPMorgan Chase, who say that if tax reform does get passed, it'll create more jobs and boost salaries.

When Sorkin brought up Dimon's claims at the DealBook conference, Schultz responded: "He's a lot smarter than me, but I don't agree with him."

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