Obama Call for Tax Hikes Met With Resignation at Davos

Chief executives of some of the world’s best-known companies, gathering at the World Economic Forum in Davos, might be expected to resist any indication that the US raise taxes on the rich.

Participants have lunch on the opening day of the World Economic Forum (WEF) annual meeting on January 26, 2011 in Davos.
Photo: Fabrice Coffrini | AFP | Getty Images
Participants have lunch on the opening day of the World Economic Forum (WEF) annual meeting on January 26, 2011 in Davos.

Despite this, reactions toPresident Barack Obama’s call for higher taxes on the rich in his State of the Union address Tuesday ranged from muted resignation to support.

“We all have to find a better-evolved model than what we have today, and we all have to ensure that capitalism is better connected to society than it has been so far,” Muhtar Kent, chief executive of Coca-Cola, told CNBC Wednesday.

He added that he has a “great respect” for the president and the current administration.

“By creating that type of conflict I think it's really going to polarize where the US is today. I hope we can get the rhetoric and get onto the real substantive issues that will really have some long-term effect on the country,” Dennis M. Nally, chairman of PricewaterhouseCoopers International, told CNBC.

“There are some big fundamental issues which have to be addressed in the US. You’ve got clear excess deficits, the debt levels, you've got political gridlock in Washington and this back and forth on these minor issues is not going to solve many of the problems.”

With governments around the world threatening to crack down on executive pay, andthe Occupy movement setting up igloos on the fringe of this year’s meeting, the redistribution of wealth is back on the agenda.

Billionaire Warren Buffett raised eyebrows last year when he called for "billionaire-friendly Congress" to stop "coddling" the super-rich and "get serious about shared sacrifice."

At the same time, trust in governments has fallen around the world as the economic crisis has continued.

“Trust in government actually imploded and across the world most of the countries distrust government," Richard Edelman, chief executive of PR company Edelman, told CNBC.

Obama is facing a re-election battle later this year, with Republican candidates resisting any tax increases.

"It was, I think, a very good political campaign speech and it probably heightens the probability of him being re-elected in mid-November," Sir Martin Sorrell, chief executive of WPP, the world’s largest advertising company, said Wednesday morning at Davos.