Hillary Rodham Clinton Friday called for changes in the federal tax code and regulations to persuade U.S. corporations to make long-term investments in workers and factories.
The leading Democratic presidential candidate said corporate America was obsessed with "quarterly capitalism," where reaping short-term profits is more important than developing new products and implementing growth plans for the next 10 years.
That misplaced priority on the earnings performance every three months has contributed to stagnant wages for employees and growing income inequality, Clinton said in a speech at New York University.
She also endorsed this week's recommendation by the New York State Fast-Food Wage Board that minimum pay at chain restaurants across the state should increase to $15 per hour by 2021 -- workers now earn as low as $8.75 an hour -- and reiterated her call for hiking the federal minimum wage of $7.25 per hour.
"Quarterly capitalism . . . is neither legally required nor economically sound," Clinton told about 200 professors, students and campaign supporters. "It's bad for business, bad for wages and bad for our economy."
The former first lady and New York senator criticized U.S. public companies for sending about $9 out of every $10 in profit last year, or $900 billion, to shareholders in the form of dividend payments and buying back stock shares.
"That doesn't leave much money to build a new factory . . . or to train workers or to give them a raise," she said.
Clinton proposed doubling the capital gains tax on profits that investors reap from owning stocks for less than two years. She also would stop taxing gains from investments in tech startups and businesses located in poor communities.
The changes would force shareholders and CEOs "to be more focused on [a company's] future growth strategy than its immediate profits," she said to applause.
Some CEOs praised Clinton's approach. George Zimmer, founder of The Men's Warehouse retail chain, said, "The choice is clear: either foster a long-term view of shareholder value, or limit the future with a focus on short-term profits."
Clinton, who counts among her donors many CEOs, also took aim Friday at executive compensation, saying it often bears no relationship to a company's performance. She called for more disclosure and tax-code changes.
Friday's speech was the Democrat's second on the U.S. economy. She said she would do more to outline her vision for "building a growth and fairness economy."
[/WEBBOX]A central theme is income inequality, and on Friday Clinton used the state fast-food wage board's $15-per-hour recommendation Shereiterated her call for hiking the federal minimum wage of $7.25 per hour.
"New York...[and other costly places] are right to go higher," she said.
Mayor Bill de Blasio, who has yet to endorse Clinton's run, praised her backing of higher pay for fast-food workers: "Secretary Clinton taking a stand for progress on this vital issue sends a powerful message." With Matthew Chayes